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  1. Someone help me out here. By my calculations, your $1,000 per month in extra income is worth roughly a lump sum of $300,000. In other words, you would need $300,000 today to draw $12,000 per year in income (@ 4% withdrawal rate per year) and have a reasonable chance of not running out of money too soon. If you were to grow $75,000 @ 5% (I just plucked a conservative number out of the air) per year for the next 4 years, you would have about $90,000. You could only draw about $300 per month on that. The buy back looks like a pretty good deal to me. I would think you would be better off buying the service credits and trying to save the maximum you can in your 457 for the next 4 or so years. You will get back your $75,000 in about 6 or 7 years payout. State pension plans are pretty rock solid. I am interested in hearing other opinions on dreamer58's question. Regarding your pig analogy- What if you turned down the monthly bacon deliveries and your pig died the next year? :-)
  2. I am not sure I can make heads or tails of that either. It sounds expensive and also so sounds suspiciously like VUL (Variable Universal Life Insurance). I would think that if you wanted income protection in the form of a death benefit and you are insurable, level premium term life insurance would be your best bet. I wouldn't think you need that in a 403b product either. If you are truly interested in this, my suggestion would be to gather all the prospectuses and brochures on the products and sit down with someone you trust and is knowledgeable and see if the "devil is in the details." If it were me, I would stay away from that.
  3. Excellent discussion here. To sschullo, it is also from personal experience that I mentioned that TC has not always given personal service. My wife works for a small college that has TC and you cannot always get TC rep to meet with you one-on-one. She has heard several complaints about representatives sent by TC. The last person they sent to the benfits fair was not very knowledgeable or helpful. I assume that LAUSD is the Los Angeles School district? I am sure TC will make sure they have personal counselors available to large employers (big $$$). Smaller employers may not be getting the same service (at least in our experience). If TC can give the same level of service to all the employer groups they are providers for, then I don't see how their competition could survive anyway. Dan, your comments hit the nail on the head. This plan provides for one-on-one service. If an employer group is going to chose only one vendor for their plan, they better make sure the vendor can handle one-on-one counseling. It looks like TC stepped up to the plate.
  4. I would have to agree with Mr. Yanikoski. TIAA CREF is a very solid, respectible company; however, their service model is not a good fit for every employee. I can assure you that the school district has a large percentage of employees that want personal service and want someone to meet with them one-on-one. They are not going to get that from TIAA-CREF. Now, I have read where TIAA CREF is changing it's model somewhat to provide more personalized services (and this may be a district they are piloting this change with), but that will be a slow process of change for a company like TIAA CREF. Those same employees may be able to access personalized financial advice through an independent planner in their area; however, they are faced with sorting out the knowledgeable ones from the not so knowledgeable. Also, unless TIAA CREF is offering their mutual fund options, you are still talking about an annuity product with it's added expenses. I would think the district would like to offer it's employees a 403(b)7 mutual fund option (Fidelity, Vanguard, etc.) in addition to the TDA. That would offer up low cost competition and a truly different choice of provider while allowing the district to keep control over who is providing investment services to the employees.
  5. To answer your first question, yes employees do buy SunAmerica funds at NAV in the 401(k). To answer you second question. Remember that with ERISA laws, you are dealing with a typical set of government laws that are very broad and open to interpretation/rulings by a government agency- the DOL. Most of this revolves around who are fiduciaries and fiduciary liabilities with respect to Sec. 404© and and prohibited transactions in Sec. 406.
  6. Here is some information that may help clarify this nagging question. Because of ERISA laws that cover 401k plans, Valic is not allowed to administer it's own plan. This would create a conflict of interest between the company and its employees. It has to use an outside vendor (therefore it will have different investment options) to administer it's plan. The standard Valic VA product cannot be used. They do have a top hat plan (deferred comp plan) for it's highly compensated employees that is not covered by ERISA laws. That plan does feature the standard VA product. The 401k plan does offer several SunAmerica funds (an AIG company) as options.
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