Jump to content

krow36

Members
  • Content Count

    888
  • Joined

  • Last visited

Everything posted by krow36

  1. I think these link to the latest very outstanding WSJ article has no subscription wall: https://www.wsj.com/articles/teachers-pay-high-fees-for-retirement-funds-unions-are-partly-to-blame-11576684664?emailToken=3efba55b848a818e79e9069f919ec1balg3SNMifZoGQlqJ0U7Xp14ltFFQ9ZktSUbKiFd%2F1Y96Z23jARahVyIM9O0+zvBggIEhop%2FyT65MW1BEf8GNqshwkO5BUKqzI0WxZbiPPv8n6qRIke10Dmv0vl0sasBF9YaZ0g6lV6+1BVZnx1q58jA%3D%3D&reflink=article_imessage_share&fbclid=IwAR2IutFgrMTedV3F3Zsz00M67txDZ5E76K0qZqeqqvYcRM-Ecbe9n13ZNzM
  2. Choosing a Vanguard target retirement fund would be ideal for you. It will be adjusted by V as needed to maintain its asset allocation. You can and should ignore the market’s ups and downs. Let the market’s LONG-TERM upward trend do its work! Local reps are salespersons with a conflict of interest. Do more reading on investing.
  3. Way to go Ed! Your timing has worked out. It's great to now have choices. 😀
  4. Because you can use your Roth IRA as an emergency fund by withdrawing your contributions without any tax consequences, that shouldn't influence whether you have equity or fixed income in the Roth IRA. You can sell either, without tax consequence. It is usually recommended that equities be used in the Roth IRA because their growth is greater than that of fixed income. That growth will never be taxed again. Your fixed income should ideally be in your 403b or 457.
  5. You are on the right track to contact the state 457 plan. Be positive! The state 457 plan will be on your side. Be persistent. The district will have difficulty in justifying a refusal to let their employees use the low-cost state plan! If they refuse at first, keep up the pressure. You are on the side of right, and getting the plan for the district would benefit ALL employees!
  6. I agree it's a great plan. There is a modest admin fee.
  7. krow36

    AXA drop out

    I think your AXA Equi-vest 403b is probably the same as that offered in CA that I mentioned in an earlier post. https://www.403bcompare.com/products/153#/investmentoptions It has a 5% surrender fee for each of the past 6 years. The M&E fee is 1.20%. The expense ratios vary from 0.6 to about 1.5%. I’ll guess that the sub accounts that you are using average at least 1.0%. However, to keep the math simple, let’s reduce the sub account expense to 0.8%. That makes the total annual fee 2.0%. Your 70k times 2% is $1,400 in fees, just about half your surrender fee. I don’t think you can win. They have it figured out so that they will get you with either annual fees if you wait, or with the surrender fee if you bail out. I agree with you that bailing out makes sense.
  8. krow36

    AXA drop out

    Aspire has a useful FAQ for the K-12 403b: https://www.aspireonline.com/resources/faqs/-in-category/categories/plan-types/403(b)-k-12
  9. krow36

    AXA drop out

    You can get the Aspire form from the internet. You don't have to go through the rep that uses Aspire. Have you looked over the Aspire website?
  10. krow36

    AXA drop out

    So the surrender fee works out to 4.2%. Transferring the balance to another vendor by a trustee to trustee transfer is not a taxable event. So no mandatory 20% withholding unless you receive a check made out to you. If the check is made out to "Aspire, for your benefit", there's no withholding, and you mail it to Aspire. Do you know the name of your AXA plan?
  11. krow36

    AXA drop out

    Adrienne, only AXA can tell you what the surrender fee will be. If you have the AXA plan I mentioned upthread (AXA EQUI-VEST Series 201), then the surrender fee is 5% for 6 years. If that's not your plan, the surrender fee could be different. Which sub accounts are you investing in? Have you found out when you started contributing? I know it's a worry, trying to figure how best to deal with your 70k balance, but it's not going anywhere, and the decision is not a priority. As you've mentioned, stopping the AXA contributions is the first chore. I agree with Tony that Aspire for your 403b is a better choice than the Security Benefit Direct Invest. I think Aspire has 2 advantages over Direct Invest. (1) Aspire has better service than Security Benefit and that will probably help in moving your AXA 70k to Aspire. (2) Aspire has low-cost Vanguard target retirement funds that I think are appropriate for you. The Direct Invest target retirement funds are from TR Price and are more expensive. Again, you need a 403b plan to move your AXA 403b 70k into. You can't move the 403b money into a 457 plan sponsored by the same employer. This was confirmed by poster MoeMoney on this forum a year or so ago. In fact she wanted to move her AXA balance to the NYSDCP 457. She thought that their forms indicated it was possible, but a phone call to them confirmed that it's only possible if the 403b is from a previous employer. Setting up the Aspire 403b may take a month or so. Moving the AXA 70k will probably take several more months. Getting the NYSDCP 457 set up can be the next chore. It's lower cost than than the Aspire 403b. You can contribute the max to both plans. 457 plans have the advantage of no 10% penalty for early distribution, after you leave your employer, no matter your age. 403b plans have the 10% penalty for distributions before age 59.5. This may not be useful to you, but it's something to consider.
  12. krow36

    AXA drop out

    On AXA’s fees, perhaps you can use 403bcompare website to get an idea. It’s run by the CA teachers’ pension organization CalSTRS. The fees of all the vendors that have plans offered to CA teachers must be disclosed on this website. Most vendors use the same K-12 403b plan throughout the US, so the the 403bcompare website is very valuable everywhere. Here’s a link to the AXA EQUI-VEST Series 201 plan, which is an AXA variable annuity commonly mentioned by posters on this forum. https://www.403bcompare.com/products/153#/fees It can give you an idea of the types of fees you should inquire about, M&E, $$ admin fee, individual fund (sub account) expense ratios. If you have the above annuity, you are probably paying close to 2% in annual fees, possibly more depending on what you've chosen for your funds. When you call AXA, ask them how much your surrender fee would be at this time. Yes you can contribute 19k to both a 403b and to a 457 account.
  13. krow36

    AXA drop out

    The administration fees of the NY state 457 are low: $20/yr plus 0.03%. The TRPrice target retirement funds have an expense ratio of 0.38%, so I would skip them. We can give you suggestions on the percentage of the 3 funds if you'd like. Or maybe you've already settled on an asset allocation? Stocks/bonds? % of stocks in international? Unfortunately the 403b can't be transferred to the 457 unless the 403b was with a previous employer. Previous posters have confirmed this with the NY state 457. I think it's an IRS rule.
  14. krow36

    AXA drop out

    The NY State Deferred Compensation Plan is an excellent 457 plan that is VERY low cost. https://www.nysdcp.com/tcm/nysdcp/static/investment_options_guide.pdf?r=1 NYSDCB Equity Index Unitized Account, (S&P500 index fund), ER 0.02% International Equity Fund - Index Portfolio, ER 0.15% NYSDCB US Debt Index Unitized Account, ER 0.02%
  15. krow36

    AXA drop out

    The first step is to look up your district's 403b vendor list. It should be on their website or that of the district's third party administrator. Hopefully there will be a low-cost vendor. You can stop your contributions to AXA and as soon as you've got the new account set up, you can start the process of moving your AXA balance to a lower-cost vendor. Teachers in NY state have an excellent 457 plan run by the state. You can contribute to that as will as to a 403b. See if your district has the state plan on its 457 vendor list, and if it does, I would sign up and contribute to it after stopping the AXA contributions. You can't move your 403b balance to the 457 plan, so you need a low-cost 403b plan to hold your AXA balance, whether you want to continue contributing to a 403b plan or not. So, to help you out, we need the 403b vendor list for your district.
  16. No, it is not stupid to invest in Vanguard’s Target Retirement 2055 fund in a 403b plan. It’s an excellent choice for both your Roth IRA and your 403b. The reason is that it is a completely diversified fund. It includes stocks and bonds, from both the US and internationally. Yes, the fund will loose value when the stock market takes a dip, but that is expected. The loss is short-term. Markets recover from losses. You have decades before you retire, and decades after that, where you want your retirement investments to be a source of your support. You should consider that your are investing for the long haul and try to ignore the noise of the market’s ups and downs. A salesperson will try to mislead you into buying a product called an equity index annuity. They will claim that it will grow like the S&P 500 Index, but will not loose money. Don’t believe it! It is very expensive. The salesperson gets a very big commission. Your balance will NOT have the full growth of the S&P 500 Index. You will loose money from the high fees. There will be a large surrender fee if you decide you want to move your balance to another product. I suggest you do some reading on investing. Dan Otter has written a very readable small book on investing for teachers. He has been working to improve the 403b world for teachers for 2 decades. There’s lots of information on why an annuity 403b plan is not a good choice for investing for retirement. https://teachandretirerich.com
  17. Welcome to the forum Mike! Yes, Plan Connect is AXA's Third Party Administrator (TPA) branch. If your district is using Plan Connect as their TPA, that's concerning. AXA sells expensive annuity based 403b so the TPA might have an interest in discouraging low-cost vendors. There's a possibility of a conflict of interest. Of course a TPA should treat all vendors equally. If your district is using Plan Connect as their TPA, there's not much you can do about it. Does your district have a list of possible 403b and 457 vendors? Please post the list. What state are you in? Many states have a low-cost state-run 457 plan that K-12 employees can use. If it's not on the 457 vendor list, it can often be added with minimum difficulty.
  18. Sorry but I don’t have any firsthand experience adding Vanguard or Fidelity to a vendor list. Have you talked to Vanguard or Fidelity? I know Fidelity does 457 plans but I’m not sure about Vanguard. Are either of those vendors on the district's 403b vendor list? It’s usually a good idea to consider all your different retirement accounts as one, and not worry about having your desired asset allocation in each account. You could forget about the SDBA with its extra fees, and just use the Total Stock Market fund with a total fee of 0.27%. Assuming you are contributing to a 403b account as well, you could put your fixed income and international stock funds there.
  19. I realize Wade Pfau is a respected authority on financial planning. However I don't think this is a good article for the K-12 403b folks, with its emphasis on annuities. It would lead the reader to think there's no problem signing an annuity contract for their 403b. We know that most K-12 annuity products are excessively expensive. I notice AXA's name on the bottom of the article??
  20. Too bad the article didn't mention that Fidelity has the Freedom Index funds with low ERs close to those of Vanguard's Target Retirement funds!
  21. Congratulations on your maxing your Roth IRA, and for being student loan free! If you contribute to a 403b plan, you will lower your taxable income by the amount of your contributions. This will postpone the income tax until your retirement when your income tax bracket will likely be lower. If Vanguard and Fidelity are on your district’s 403b vendor list, you are fortunate as they are excellent low-cost vendors. I agree with the other posters that a target retirement fund is an excellent choice for your 403b account. Neither of those vendors will have a local rep to “advise” you, although you will have phone access for administration concerns. Here’s a link to a 403bwise article on 403b plans and how target retirement funds work: https://403bwise.org/education/investment As mentioned above, a pension that is 90% of your final working salary is very unusual. About 60% is more common. I believe that a majority of teachers do not work long enough to get a full pension, for a variety of reasons. Adding a 403b account to supplement your pension is a very prudent move! What state are you in? Some states have excellent low-cost 457 plans available to K-12 employees that are worth considering. After leaving your employer, you can take distributions from a 457 without the 10% penalty that the 403b has until age 59.5. There are exceptions to the age 59.5 rule.
  22. This screen sh_t from the NYT shows that as we get to the bottom in mid-Dec, the 1 year return and the YTD return will be even higher than it is now. After the first Q of this year, the S&P 500 has had a gradual, rather bumpy increase.
  23. Lots of good points Tony. I really like this Vanguard app that allows you to play around with a number of inputs that contribute to whether your saving rate is high enough. https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementIncomeCalc.jsf
  24. Tony, here’s why I think the VOYA administered 403b plan is a very good plan. It has these Vanguard funds: Total Stock Market, ER 0.04% Total Int’l Stock Market, ER 0.11% Total Bond Market, ER 0.05% The only admin fee is 0.17% This school district has a single vendor low-cost 403b and 457 plan! VOYA is the record keeper and administrator but the funds offered and their ERs and the admin fee must be the result of the district using a fiduciary advisor. It’s not perfect—I’d like to see target retirement fund offerings from Vanguard (or Fidelity’s Freedom Index funds) because TR Price Retirement 2010 has an ER of 0.78%. Maybe in the future?? JaneDoe has her 403b contributions in a expensive Horace Mann plan and the VOYA 403b is the district’s only plan. Assuming she stays with the district, she needs the VOYA 403b to hold her HM balance. I agree that she should pursue the VA state 457 for possible future contributions. It’s a wonderful plan. It may even be available to her currently as I don’t think she has asked about it yet? I could be wrong on that. If it’s not currently available, like you, I think it can be added with a modest effort.
×
×
  • Create New...