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TonyZ

Aspire or NEA Direct Invest

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NJ teacher.

I currently have axa, the cats out of the bag about high fees. My school district only has two options axa or Lincoln(the bad one).  Our TPA won’t answer my questions about following the money and explaining how much I’m paying in expense ratios. I emailed two months ago to him and have asked to open up more options/companies but haven’t heard anything back. I have heard that the TPA said that he can offer Aspire through axa but I’m not sure what this means or if Aspire is good. 

I want to move/change companies but I’m stuck between too high fee providers and I don’t know anything about Aspire.

Also, any information about NEA Direct Invest would be great appreciated. 

Thank you,

 

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Tony!!

To answer your question, why not both?

 

So much has already been written here about Direct Invest through Security Benefit.Do you have a Security Benefit option?  It would be a good choice.Just use the search option above at the top of the forum . Plenty of info should come up. If you only have two bad options than  I would definitely pursue adding Aspire. It can't hurt.If you self direct into low cost  index funds it will work out for you better than what you  currently have but be aware going through an Aspire sponsored advisor could mean higher costs. And if is available through an AXA  agent I would be even more concerned. Have you tried getting your district to add a New Jersey State 457B plan? If teachers can participate its fairly easy to add. The 457b is particularly attractive because funds can be withdrawn _penalty free_ at ANY age upon separation from service...in other words, the money is not tied up until you're 59.5 and you could potentially retire early.I would definitely push your district  administrators to add more low cost options.  You should be the change you want to see in your choices.Be vocal . Change the landscape  away from insurance products and more toward lower cost non annuity/insurance  options.

You will receive more specific information from others and I probably won't comment further unless you ask a direct question. I hope this helps get you started. Personally I am proud of you for taking some steps forward . Many teachers may thank you down the line for instituting needed changes in  your retirement investments arena.

Regards,Tony

 

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58 minutes ago, TonyZ said:

Why not transfer all my money into aspire or into NEA direct access? I have 90k in axa.

TonyZ

You indicated in your post that you only have two options available. Is that Correct? Have you checked your provider list?  If those are the only two available you can't just transfer out of those choices and into something else unless those other choices are on your provider list. 

That means if that is what you wish to do than you will have to get Aspire or Security benefit/Nea invest added to your choices before you can transfer your money over. Employment plans are rather restrictive. If you are unhappy with your 403b and can't get any added then maybe you should invest in an IRA directly. That way you can invest with anyone you want including Vanguard and at less cost. Or as mentioned earlier check out your 457b state plans. That plan may have much better options but again it has to be added to your provider list before you can do anything and has to be available to teachers.

 

Also are you aware that your probably have surrender charges if you do leave AXA?  You are pretty much trapped in your plan unless you leave your job or retire or turn 59.5. I suggest you push for better choices and then we can have a better discussion. Keep in touch and  keep asking  questions .We all are here to guide you in the right direct.

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When you mention “Lincoln (the bad one)”, are you referring to Lincoln Financial? That is indeed the annuity selling insurance company. However, I think it might be worth your trouble to call up a regional office of the other Lincoln, which is Lincoln Investment. Perhaps you have heard of their Participant Directed Platform (PDP) 403b/457 plan for K-12 schools in NJ? I’ve read that this low-cost plan is due to an arrangement between the NJEA (union) and Lincoln Investment. It’s been mentioned that this arrangement has been made a NJ state regulation. Lincoln Investment doesn’t publicize the arrangement so it has to be arranged individually by talking to a regional office. There may be a chance that you can get Lincoln Investment (LI) to convince your district’s TPA to add LI to the vendor list (and allow you to use the PDP. Its annual fee is only $35 and uses low-cost Vanguard funds and both 403b and 457 plans can be used. 

It sounds like the district’s TPA is in the camp that thinks that an “advisor” is a requirement for having a 403b or 457 plan. As Tony has mentioned, that is not true. In fact all the low-cost 403b and 457 plans do not require advisors. Aspire will work OK for you with a 0.15% and $40 added to Vanguard’s low-cost expense ratios. When you fill out Aspire’s application form put “self-directed” in the space where the advisors name goes. If the TPA objects, you cross that bridge at that time. Several posters have had that battle and won and can advise you. Aspire will be able to tell the TPA that “self-directed” is allowed.

Either the LI PDP or the Aspire plan would allow you to transfer your AXA balance to them.

 

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18 minutes ago, krow36 said:

When you fill out Aspire’s application form put “self-directed” in the space where the advisors name goes. If the TPA objects, you cross that bridge at that time. Several posters have had that battle and won and can advise you. Aspire will be able to tell the TPA that “self-directed” is allowed.

This is true. This self direct option was not disclosed to our school system when Aspire was added. I can't remember how I found out but I was the first to use the self direct option by simply writing" no advisor needed. Please self direct this account" It was easy as pie to do.

I would also definetly check out that Lincoln option Krow mentioned. When you said

' Lincoln the bad one" I just assumed you meant Lincoln Financial which sells annuities.

 

 

 

 

 

 

'

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44 minutes ago, krow36 said:

When you mention “Lincoln (the bad one)”, are you referring to Lincoln Financial? That is indeed the annuity selling insurance company. However, I think it might be worth your trouble to call up a regional office of the other Lincoln, which is Lincoln Investment. Perhaps you have heard of their Participant Directed Platform (PDP) 403b/457 plan for K-12 schools in NJ? I’ve read that this low-cost plan is due to an arrangement between the NJEA (union) and Lincoln Investment. It’s been mentioned that this arrangement has been made a NJ state regulation. Lincoln Investment doesn’t publicize the arrangement so it has to be arranged individually by talking to a regional office. There may be a chance that you can get Lincoln Investment (LI) to convince your district’s TPA to add LI to the vendor list (and allow you to use the PDP. Its annual fee is only $35 and uses low-cost Vanguard funds and both 403b and 457 plans can be used. 

It sounds like the district’s TPA is in the camp that thinks that an “advisor” is a requirement for having a 403b or 457 plan. As Tony has mentioned, that is not true. In fact all the low-cost 403b and 457 plans do not require advisors. Aspire will work OK for you with a 0.15% and $40 added to Vanguard’s low-cost expense ratios. When you fill out Aspire’s application form put “self-directed” in the space where the advisors name goes. If the TPA objects, you cross that bridge at that time. Several posters have had that battle and won and can advise you. Aspire will be able to tell the TPA that “self-directed” is allowed.

Either the LI PDP or the Aspire plan would allow you to transfer your AXA balance to them.

 

If your district has Lincoln Investment, as a NJ teacher, you will have access to the PDP.  If it is Lincoln Investment, call this number:  215-886-7695.  They will send you the paperwork to start the account 

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Read about Security Benefit’s NEA DirectInvest here. Read about Aspire here

NEA DirectInvest is the superior choice between the two because Aspire adds on an unnecessary 0.15% yearly fee.

As others have said, one of the Lincolns offers a self directed program. I can’t remember how it stacks up to the two previously mentioned plans, but it is definitely worth your time to investigate.

Also worth your time...list all of your approved vendors in this thread and use google to see if your state has a state sponsored 457b available for you to use.

I have no idea what it means to get Aspire through AXA. I may be ignorant, but there is a chance your TPA is confused and/or you’re having a miscommunication.

Unless your district is drastically different than mine, remember the TPA isn’t in charge. The TPA is basically a contractor used by and subservient to the district. So if you want change, push the the actual decision makers. In my blog I wrote about the reforms I pushed for...if you do the same, you’ll definitely want to get both Vanguard and Fidelity approved because they’re the best. You can read about the five best plans I’ve documented here

15 hours ago, TonyZ said:

Why not transfer all my money into aspire or into NEA direct access? I have 90k in axa.

Everything Tony mentioned with regards to this question is good stuff, but Inwanted to add one thought. Yes, you may be charged surrender fees to leave AXA and you should fully understand how they work...but in every case I’ve studied it is worth it to pay the surrender fee because the annual fees of staying there are even worse. I wonder why they don’t increase the surrender fees even more honestly. 

 

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TonyZ,

Welcome. I love that you said, "the cats out of the bag". It gives hope but really, it's only out of the bag if you're looking. Too many teachers are not aware or are not taking action. Congratulations to you! 

As Tony said, you might have a surrender fee when leaving AXA but it will be worth it in the long run, most likely to you too. And AXA will go out of their way to make you feel like it isn't possible or that you should not be doing that. They will make you send in paper copies of their forms, they will tell you you must request the forms from your assigned advisor, they will send you the wrong forms (intentionally, it seems), they will not email or mail them to you but might make you log onto your account, etc. They will do any or all of the above to get you to forget about it or make you feel it isn't worth it.

This is by design and do not let it stop it but rather accept it as your challenge! Like your challenging student! We want you to succeed and will be here every step. Read here about the same things that happened to members of this forum, myself included.

And then, talk to your colleagues about what you learned about fees.

 

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To add to what Moe said, this is my horror story. You’ll have a much easier time of it because you can use us as a resource. You’ll get it done.

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53 minutes ago, EdLaFave said:

Yes, you may be charged surrender fees to leave AXA and you should fully understand how they work...but in every case I’ve studied it is worth it to pay the surrender fee because the annual fees of staying there are even worse. I wonder why they don’t increase the surrender fees even more honestly. 

 

I agree Ed and Moe, the recovery is quick once you get in the right super low  fee investment. I wouldn't give it a second thought and when I had to dump my annuities I did just that. I have found that some newbies however who are just learning are a little hesitant to do that and that's when I tell them it can be done periodically to avoid that fee. I have also known a few agents who were able to persuade folks to stay with them  "or you will loss a bunch of money and you don't want that" It's a learning process. I learned the hard way. I wasn't warned about surrender fees and was never even told what expense ratios and other fees I would be paying. Its such a slick dishonest business for sure.

 

 

 

 

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Thank you very informative.

TPA has also said if I move my money it’s not “protected” not sure what he means and he won’t expand so I feel it’s a bs scare tactic.  Any thoughts?

 

Also, my numbers:

I have paid in 70 k and have 90k in the past ten years, any thoughts on that growth? 

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2 hours ago, EdLaFave said:

As others have said, one of the Lincolns offers a self directed program. I can’t remember how it stacks up to the two previously mentioned plans, but it is definitely worth your time to investigate.

I’ve had accounts with both Lincoln’s PDP and Security Benefit’s DirectInvest.

Security Benefit’s online platform is superior.  Lincoln’s, at least when I used it two years ago, was very limited.

Security Benefit waves the $35 annual fee for accounts over $50,000.  Lincoln does not waive the fee.

Lincolns fund selection is superior.  They have a huge assortment of Vanguard Funds including Target Date Funds.  If anyone would like a list of the fund selection I can supply a copy.

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6 minutes ago, TonyZ said:

Thank you very informative.

TPA has also said if I move my money it’s not “protected” not sure what he means and he won’t expand so I feel it’s a bs scare tactic.  Any thoughts?

 

Also, my numbers:

I have paid in 70 k and have 90k in the past ten years, any thoughts on that growth? 

This sounds like total BS!  Not sure why the TPA would say this.

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Ignore the TPA they have a conflict of interest. When I was pushing for reform they indirectly threatened me with legal action for explaining the exploítive plans to teachers.

It is in your best interest to get your money into one of the top notch plans. No amount of spin can change math.

As far as 70k becoming 90k over a decade long bull market...that is abysmal. Just how abysmal depends on what assets you were invested in and whether it is appropriate for your personal risk tolerance. 

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