Jump to content
TonyZ

Aspire or NEA Direct Invest

Recommended Posts

Thank you.

 

Are these three good choices from Direct Invest from Vanguard?  I have no problem with slow, steady, and safe investments.

1F87459F-6ABD-463C-AD86-D34AD5BD3725.png

Share this post


Link to post
Share on other sites

You can use portfoliovisualizer.com to back test portfolios to get an idea.

If you invested $70,000 in 2009 and you put it all in Vanguard’s Total Bond Market (a very “safe” investment) then by 2019 you’d have $99,008.

So by any standards, and not to make you feel bad (it’s in the past), you’ve seen terrible results.

Yes, those three Vanguard funds in the screen capture are the best/cheapest way to build a fully diversified portfolio. Make sure you read the Investing 101 page, it’ll help you get an idea of how risky your portfolio should be.

Share this post


Link to post
Share on other sites

TonyZ, you've told us that your district has only 2 vendors on their 403b list, AXA and Lincoln Financial. If that is the case, and Security Benefit is not on the list, then the Security Benefit NEA Direct Invest option is not available to you. We don't recommend you work to add Security Benefit to the vendor list because their reps sell very expensive 403b plans to uninformed teachers. We consider their reps to be predators. If the predators are already allowed, the NEA Direct Invest (which does not use the reps and is internet and telephone based) is a great option.

I suggest you call the Lincoln Investment phone number that posted previously and see if it's possible for them to get themselves added to the vendor list. It's worth a try. 

If that doesn't work, then sign up with Aspire, using Vanguard funds, going self-directed, no AXA rep. 

Share this post


Link to post
Share on other sites

TonyZ

Please carefully read the posts. You are missing key details. As Krow is saying and I have said previously You cannot use direct invest if you don't have Security Benefit available in your district plan. 

Please respond if you understand this.

Share this post


Link to post
Share on other sites
2 hours ago, TonyZ said:

Thank you.

I wanted a low risk tolerance, does that change anything? I though I should still have made more. 

If you feel your growth is low in a time of decent market returns its no question partly due to being invested with an Insurance annuity product. For years i wondered why my taxable accounts were outpacing my 403b plan by several percentages points so the fees do have something to do with it. What you are invested in also matters. If you in your 20's or 30's you should invest more aggressively and not get too conservative because you have time on your side.

Share this post


Link to post
Share on other sites
On 2/9/2019 at 12:36 PM, TonyZ said:

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,

 

Aspire is good! You should pursue getting the TPA to add Aspire to the 403b vendor list. What it means is that the TPA thinks that you need an AXA advisor to oversee your Aspire account. That would add an additional fee (0.6%?). Aspire does not require that you use an advisor, and the TPA has no business in my opinion requiring an advisor. On the Aspire application that you download from their website, you can write in "self-directed" or words to that effect, instead of the "advisor" name.

The TPA is contracted by the district to regulate which vendors are on the list. But the TPA or the district does not have the power to determine which options of a vendor you use. If you want to do Aspire self-directed, it should be allowed. You may get some resistance, but it's up to you to stick up for yourself and choose a low-cost option, if that's what you want. All the best low-cost 403b plans are 'self-directed, such as Fidelity, Vanguard, and the Security Benefit NEA Direct Invest. They are all internet based, not local rep based. Your district and its TPA have ignored the critical importance of the fees in a 403b.

Share this post


Link to post
Share on other sites

Besides using Aspire, your other possible at a low-cost 403b/457 plan is to get Lincoln Investment added to the district's vendor list. There is an undisclosed relationship between the NJEA (the NJ state union) and Lincoln Investment (and possibly the NJ legislature?). It's an excellent, low-cost 403b and 457 plan that uses Vanguard funds, and is only available to NJ school districts (and a few near Chicago and some in NY state). It's possible that if you called the regional office, they could persuade your district to add Lincoln Investment to their 403b and 457 lists? You won't know if you don't give it a try. 

I think you should forget about getting Security Benefit added to the vendor list, for the reasons I've mentioned.

Share this post


Link to post
Share on other sites

Krow

I think we may be giving too much advice/information  and confusing TonyZ. He also started a separate thread asking basically the same question.  I think maybe his first step might be to just get Aspire on board and then expand from there into working on  his 457b plan...In his other thread he started I mentioned why  adding Security Benefit might be a bad idea because it sells expensive products outside of the Direct Invest option. You gave similar advice.

All this advice we are giving him might be making things difficult for him as a new investor. I may be totally wrong but all this info  we all  are giving might be overwhelming him.

Tony

Share this post


Link to post
Share on other sites

I read his other thread before I wrote the last 2. I don't think I'm giving him too much advice/information, but who really knows? My goal is to make him aware of his best options and there are 2 of them I think. They both require some effort on his part. Either one would be a good outcome. Hopefully he'll tell us how it goes. 

Share this post


Link to post
Share on other sites

Guys,

Thank you, I had to do more reading and researching but I’m starting to get it now and understand what you are saying about it being easier to roll it over into an IRA if there aren’t other options. 

I spoke with a co-worker who moved from Axa to Aspire using our districts TPA so I know my district has it available but they never told anyone. I looked it up online on Aspires website and my school district is there. 

I have a few more questions and thank you in advance. 

I’m reading the application as we speak. How do I get my money over? Would it be a transfer or roll over? 

How often do you rebalance? Is this to protect your risk or reward? I was thinking annually? 

Just want to make sure from what you are saying I shoud I fill out application on my own without the TPA or should I have him fill it out and say self direct and is he obligated to do it? 

 

 

 

Share this post


Link to post
Share on other sites

Guys,

Thank you, I had to do more reading and researching but I’m starting to get it now and understand what you are saying about it being easier to roll it over into an IRA if there aren’t other options. Hold on! You can't roll over your 403b to an IRA unless you quit your current employer. You can roll it over to another 403b vendor if the vendor is on the district's 403b list.

I spoke with a co-worker who moved from Axa to Aspire using our districts TPA so I know my district has it available but they never told anyone. I looked it up online on Aspires website and my school district is there. Excellent!

I have a few more questions and thank you in advance. We love questions! Hey, most of us are teachers, or retired teachers!

I’m reading the application as we speak. How do I get my money over? Would it be a transfer or roll over? The first thing you should do is establish an account with Aspire. If you haven't done so already, you should stop contributions to your AXA 403b. Once the Aspire account is established, you should start contributions. Your TPA will have a form to fill out for that to happen, but you need to establish the account with Aspire first. After that's taken care of, you can work on transferring the AXA balance. Aspire will have a form for you to fill out, and probably so will AXA. This will take some time, and patience. Expect to be frustrated. And annoyed by AXA. But eventually it will happen.

How often do you rebalance? Is this to protect your risk or reward? I was thinking annually? Rebalancing keeps your risk at the level that you have decided on. You shouldn't worry about that yet. If you end up with a target retirement fund, rebalancing is done for you. 

Just want to make sure from what you are saying I should I fill out application on my own without the TPA or should I have him fill it out and say self direct and is he obligated to do it? I think you should avoid talking to either the TPA or an AXA rep. Just fill out the Aspire form and send it in. If you have questions about anything on the form, just ask us and we'll help you figure it out!

Share this post


Link to post
Share on other sites

That’s great! It is a transfer from one 403b vendor to another. I believe a rollover involves an IRA. Call Aspire directly. Yes, annual rebalance. That is to keep your stock:bond ratio balanced to the percentages you desired. 

Share this post


Link to post
Share on other sites

When I switched my 403B to Vanguard the paperwork was called an exchange/transfer form.  For mine it did require a signature of Third Party Administrator, so I had to mail it to them with a SASE and they forwarded it on to Vanguard.  I'm not sure that every custodian has the same requirements though.

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×