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Everything posted by gadfly

  1. A former school district employee in no longer employed with the district. Is the employer allowed to make a contribution on behalf of the former employee? Thanks for you advice!
  2. Hi, I realize that this is off topic, but somewhat related. I deal routinely with Fidelity, Vanguard and Schwab. Here is a recent letter to Fidelity about my experience transferringan Inherited IRA. Thought you might like to pass on my perceptions to those who care regarding a recent transfer of an Inherited IRA to Fidelity. I use Schwab and Vanguard also. To put it bluntly, there is the feeling that there is no case managemt at Fidelity. Every letter is from some one different. Every phone is from someone different and every U.S. mail correspondence is from a different address. For instance, I have received communication from New York, Westlake, Texas and Cinncinati. I have received communication from Fidelity and I have received communication from National Financial Services, LLC. There is still unfinished business with some more money to be transferred and I don't have a clue who to talk to at Fidelity or WHO Fidelity really is. The last communication came from Texas, but one has the feeling that that is only going to delay things. In contrast, when I deal with Schwab, for example, someone calls me and follows through to completion. I hope this is useful for you. Sincerely, COMMENTS from Gadfly---anyone else had similar experiences. In general, Schwab, who also has my 403b7 is light years ahead in customer service. Who cares that the charge a bit more for trades? Unless one is a day trader, $10.00 really doesn't amount to too much given their level of service. Thanks for letting me vent, even though this isn't exactly kosher for this topic.
  3. In defining the terms I consider a LifeCYCLE fund as one of those with a target date (also known as target funds), such as 2020. I consider LifeSTYLE funds as those that emphasize different risk profiles such as MODERATE, AGGRESSIVE or CONSERVATIVE. My questions is this: If one picks a Life CYCLE fund, in which the manager of that fund, through fund of funds or any other method maintains a moving risk tolerance profile that generally goes from aggressive to conservative, with "year to retirement" being the variable, shouldn't one put all of their dollars into that fund and in general, say in a 403b, NOT try to micromanage by choosing other funds in addition tothe LifeCycle (Target) fund? Thanks!
  4. I think we keep missing the point which as to do with the issue of "dual agency." My surgeon may be wonderful, ethical and in fact selling the best heart valves, but the fact remains that he shouldn't be selling heart valves at all because of a POTENTIAL conflict of interest. My Realtor may be Mother Theresa, but she shouldn't represent BOTH sides of the transaction. My ATTORNEY shouldn't be representing both clients, the defendant and the plaintiff, ( even though he might be able to competently wear two hats) because of a POTENTIAL conflict of interest. That is the real issue that other professions understand...we must take away the POSSIBILITY of a conflict of interest and that is why EDUCATION must be separated out from the SALE of those PRODUCTS.
  5. I believe this is a case where the employer has just said NO to any 90-24 transfers. My understanding is that they can do this and do not need a reason to do so except that the law allows them to.
  6. gadfly

    Comparing 403bs

    I did locate the Education Minnesota products, all marketed through this link: http://www.mninvest.com/prod_info/prods.html#403 Couldn't find any links to expenses here. Gadfly
  7. I want to thank you for your answers. I haven't posted back because I am still negotiating through the labyrinthian arrangements of who-did-what-to-whom. The story will continue...thanks!
  8. Great-West says that they will ONLY allow a 90-24 transfer to the new vendor chosen by the District. The teacher wants to to a 90-24 to Vanguard. The District is OK with this, but it is the vendor, Great-West saying no in this case. Which portion of the law states that they must allow a 90-24 transfer if the Employer permits it?
  9. Sorry, I just read another of you posts regarding: The IRC permits this. See IRC sections 403(b)7 and (b)11. Rolling over into an IRA while employed if over 59.5.
  10. Thanks! That would be a PENALTY free, but not a TAX FREE and how about the CDSC (surrender fee)?! They can't move it to an IRA if they are working though, can they?
  11. Hi, My motto is "follow the money" aka, "follow the lobbyists. " Who lobbied for this and how does it help the consumer? Thank you for any comments? Gadfly
  12. Who came up with this one??? This seems to take leverage away from the consumer and does away with the "escape" clause!!! If I interpret what you said, this is very regressive. So if one is in a bad 403b and that 403b is the exclusive 403b for salary reductions, then they are stuck in that one and cannot under any conditions (short of retirement), move their money?
  13. A question came up. Even if one IS still working...can they take a penalty free distribution from a 403b at 59 1/2? Thanks!
  14. gadfly


    I guess I could still use some clarification.... If an attorney, income tax preparer or my brother-in-law wants to meet people in their homes or offices and help them with their asset allocation, choose funds and just help them do financial planning AND charge them a fee, is a license required? I am assuming that this individual makes no money from selling any commisionable products and that no revenue-sharing arrangements are in place.
  15. Hi smwonder, My advice is to start with the basics: 1) Subscribe to Money Magazine 2) Listen to "Sound Money" on Public Radio 3) Keep reading the articles and posts on this site until you gain an understanding that: A) awareness of fees will make a huge difference over the long haul. 3% in fees takes 45% of your final investment result over 30 years (all things being equal). B) Understand that no one knows which asset class will have an "up" year so hedge your bets by using appropriate asset allocation C) Start a Roth IRA with a low cost provider D) If possible, stay away from annuity products in your 403b plan E) Make sure you own a home. Interest rates are still very low historically. Gadfly
  16. How did the Insurance industry get such a strangle-hold on the K-12 market? Does anyone know the history of the 403b and the unique relationship to the K-12 market?
  17. Could you share the fund choices and the Mortality and Expense charges with this group please? Is there an employer matching of deposits? There is always a Roth Ira! If you are saving for college, you might even be better advised to save through a 529 plan.
  18. 1. Are they all annuity products or do any of them give you direct access to mutual funds without mortality and expense charges....probably not, but just asking in case. 2. You could methodically find out which one (if they are all annuity products) does NOT have a surrender fee in their cash equivalent account and then ... 3. If there was one that did NOT have a surrender fee in that account, all money could go there into a holding pot,so to speak and then... 4. Periodically, you could do a 90-24 transfer to a low cost vendor like Fidelity Vanguard, TIAA-CREF, TRowe, etc. 5. You could cut you loses and find the one with the lowest M & E charge, the best fund choices and stick with that, withinthe annuity products. The one caveat is that your Employer may interfere with the 90-24 transfer. Then again, they may not even know what that is. You may not even want to ask them the question! I'm sure others will have comments on my comments.
  19. gadfly


    Questions to be answered by Dlove 1) Is this the ONLY option for a 403b? Will your District allow you to use any vendor for a 403b? 2) Is there a 457 option? Consider a FEE ONLY financial advisor to help you with the overall picture e.g. do you own a home yet? Do you have kids, life insurance, do you need a college savings plan, doy ou have a defined benefit or a defined cotribution plan, etc. etc. Gadfly
  20. Just to clarify my limited experience and understanding: Great-West is neither "good" nor "bad." They negotiate many different plans with many different sponsors. What determines the pricing? It is like when you buya car. There is a bottom line below which the auto dealership will not go. The dealership would like to make as much profit as possible. This is not evil, it is business. Great West is like anyone else, if you demand a low cost plan with mutual funds only, then they will provide it outside of the annuity products. If you want bells and whistles, then you will pay for them. If you want index funds, they will be cheaper, but where will the reps gets their costs recouped? Therefore, the company would like to add some funds like lifestyle (target) funds orwhatever. They need to have some funds that agree to rebate some fees back to Great West so that they can recoup their costs. If you want someone to come into your buildings and talk to your teachers, then it will cost more. Why wouldn't it? My perception is that the market forces are finally starting to force vendors to offer low cost plans, IF you demand them. I also think that large scale state plans are making it difficult for the insurance companies to compete. Comments?
  21. It has been my experience that one of the selling tools that is used to entice a District to use a vendor, is the "window to the stock market" feature. The vendor states that their plan offers maximum flexibility because if participants don't want to use their funds, they can go through this "window" to purchase thousands of retail funds available elsewhere. Has anyone had experience with this. Can one purchase, for example, a Vanguard fund this way without the high expenses associated with traditional 403b products? It doesn't make sense to me that a vendor would affer a low cost loophole of this nature. Thanks!
  22. gadfly

    Vanguard 403b

    Hi, No, she stopped her salary deferrals ONLY into the high cost District-Sponsored 403b plan and moved THOSE dollars intoa frozen 403b(7) account at Vanguard. Her NEW salary reduction dollars go into the State low-cost 457 plan where she has, for example, the Vanguard Institutional Index Plus fund for total expenses of .01 + .25 administrative or .26 total. Not too bad for a pre-tax account.
  23. gadfly

    Vanguard 403b

    These are all good answers. I had my wife move her money from the approved vendor to the Vanguard 403b(7). Just to clarify, her new account is frozen to additional contributions now, but at least that portion is there.
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