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jwils118

Choosing 403B Plan, is it worth it?

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39 minutes ago, tony said:

 I would stick with the Ohio state 457b plan and do a lifepath fund close to your anticipated retirement age. Its equivelent more or less to a Vanguard target fund using index funds. I have discussed in the past why  a target fund is a good way to go . Do a search on this site. Seems like they are  a very good low cost option.  I would not sweat the administrative fees. Most 457b plans have them and yours seem more than reasonable. I think you have a winner in the 457b plan. I'd go with that. But should you want to do the 403b, Aspire would be a reasonable choice. Good luck to you.

 

P.S. If you want to boost your possible performance (and risk) you could do the lifepath fund and add a small cap value fund. You have that available in your choices. Some experts and journalists advocate boosting your small  stock allocation when doing target funds. Its not necessary but it could give your portfolio a boost long term. Short term it will make your portfolio a bit more risky. Ivwould only put in 5-10% of your total monthly investment in this.

 

I don't know how old you are but when I started investing while teaching , I could not find a retirement product that had fees less than 2% a year. So you are lucky to have The Ohio 457 plan and even Aspire available. 

 

Thank you for all the advice! I think I will end up doing something similar to what you described since I'm okay with a little risk at this stage in my life. Hopefully, the returns show up after a good amount of time. This forum has been great and I will be back. My brother works in the same district, as do many of his friends, so I will be spreading the word about our district options. Thanks for everything guys.

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1 hour ago, jwils118 said:

 

Tony and Krow, Thanks so much for all the help. I didn't even know that the 457 would be a viable option. I contacted HR and found out that we do have two options for 457 plans: Ohio 457 Deferred Compensation Plan and OASBO 457 (VOYA) Deferred Compensation Plan. I looked a bit into the first one and I believe this is the one that Krow mentioned in the previous post. After you pay the .14%, they seem to run their own type of retirement fund with a .06% ER https://www.ohio457.org/iApp/ret/cmd/RetFundProductInformation;jsessionid=0F1B4D83F1C18E6FCA7C7C3E3FFEF555?ENTITY=null&userSite=OHIO&pageNum=2

They also have a few Vanguard and Fidelity funds by the looks of it, but those would require some asset allocations every few years.

I've never heard of VOYA though for my other option?

That link doesn’t work for me. I would  avoid the OASBO 457 because the expense ratios are much higher than those of the Ohio Deferred Compensation. The OASBA 457 target retirement fund I looked at has an expense ratio of 1.11%. I couldn't easily find the admin fee and it's possible it's included in the fund's ER. Voya Solution 2055 Portfolio - Service Class

The LifePath funds of the Ohio state 457 are funds of funds (also called target retirement funds) and very low cost with an expense ratio of 0.06%. As I mentioned above the 0.14% admin fee is very reasonable.  I agree with Tony that one of these LifePath funds in the Ohio 457 is a great way for you to start investing. https://www.ohio457.org/iApp/tcm/ohio457/investments/fees/index.jsp

 

 

 

 

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Aspire is the 4th best plan I've documented, you can read about it here.

They allow you to build a fully diversified 3 fund portfolio for a 0.208% annual fee or a fully diversified 1 fund portfolio for a 0.26%-0.3% annual fee. Plus a $40/year fee.

I'd prioritize maxing out an IRA. I'd push hard to add Vangaurd (documented here) and Fidelity (documented here) to your 403b/457b list. I didn't bother to look into the state 457b, but from the sounds of it that would be the next be choice. After that I'd opt for Aspire. However, it is worth pointing out that all of these options are superior to investing through a taxable account.

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3 hours ago, krow36 said:

That link doesn’t work for me.

I had to try it three times in a row and then it opened   https://www.ohio457.org/iApp/tcm/ohio457/investments/fees/index.jsp

 

1 hour ago, EdLaFave said:

I'd prioritize maxing out an IRA. I'd push hard to add Vangaurd (documented here) and Fidelity (documented here) to your 403b/457b list.

These are good thoughts too. The path of least resistence though would be the Ohio 457b plan or by starting off maxing out an IRA first which allows you to invest with whomever you want to invest with free of those annoying other fees found in retirement plans.. Vanguard and Fidelity would be great to add and you could work on that too but getting them on board could possibly be challenging but then maybe not. You will just have to see. I've seen folks struggle to add them to their district plan and I have seen some folks like Ed getting it done.

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