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Dan Otter

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  1. Hey Steve, Happy Super Sunday! This is fun... so you see the Seahawks as the tech sector--a new paradigm. This sounds an awful lot like 1999 when the experts said that the runup in Internet stocks was justified because the rules had changed. I don't think so. Football is about physical will--solid steel if you will. Sell now before the crash! Dan Otter (who is actually a Buffalo Bills fan)
  2. The Pittsburgh Steelers are like an index fund because they... 1. Focus on the long term (two coaches over the past 5 decades) 2. Have a winning strategy and stick with it (run the ball and play defense) 3. Post superior long term results - division championships since 1970 (17): 1972, 1974, 1975, 1976, 1977, 1978, 1979, 1983, 1984, 1992, 1994, 1995, 1996, 1997, 2001, 2002, 2004 Super Bowl appearances since 1970 (6): 1974, 1975, 1979, 1980, 1996, 2006; Super Bowl victories (4): 1975, 1976; 1979; 1980; and 2006? Dan Otter
  3. Pittsburgh-based Invesmart constructed a retirement portfolio cost barometer that calculates the average cost of investment management for 64 top mutual funds. The company has determined that 57 basis points (0.57%) or less represents a reasonable price for the net investment management fees that a participant should pay annually for an all-equity portfolio. Retirement Plan Fees Expected to Continue Dropping
  4. January 25, 2006 Treasury and IRS Propose Rules Regarding Designated Roth Contributions Today, the Treasury Department and the IRS issued proposed regulations under sections 402(g), 402A, 403(b), and 408A, regarding designated Roth contributions. Roth contributions were added to the Code by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and are effective for taxable years beginning after December 31, 2005. Designated Roth contributions allow for employees to designate all or a portion of their elective contributions under a section 401(k) plan of a section 403(b) annuity plan as Roth contributions. These contributions would receive tax treatment much like a Roth IRA contribution, meaning that they would be contributed from after-tax income but, later, "qualified distributions" of the contributions plus earnings would be completely tax-free. These proposed regulations address issues with respect to designated Roth contributions not addressed in the final regulations under section 401(k) regarding section 402A that were published in the Federal Register on January 3, 2006 (71 FR 6), including the definition of a qualified distribution, the taxation of distributions of designated Roth contributions that are not qualified, coordination of designated Roth contributions and Roth IRAs and rules for Roth contributions under section 403(b) plans. Treasury Department Press Release
  5. Hey Nesto, Thanks for the kind words about the site. I recommend you contact the companies you are interested in and explain your situation. They should be able to tell you exactly their policy and what it would take to set up a plan. Good luck and good job being so proactive about something that is so important--your retirement. Dan Otter
  6. Hey Folks, In an effort to present a variety of opinions we have just posted the following story EIAs: Friend or Foe? written by a proponent of equity indexed annuties. It would be interesting to get an honest, civil debate about these products here. My personal opinion is that these products (at the least the current crop) should be avoided at all costs. But I also believe in hearing from a variety of voices on this subject. Dan Otter
  7. Hey Brownstone, Good idea for making this a specific FAQ or feature. We will work on something... In the meantime here are a couple of items from our 457(b) FAQ and our 457(b) Must Read pages that may be of interest... Read Between the Numbers: 403(b)s and 457s Unlike the 403(b) plan, the employer must create a plan document detailing the specific rules of the plan. Your employer's plan document will be the best source of information for your particular situation. A 457(b) plan must be held in a trust for the exclusive benefit of the plan's participants and beneficiaries. Section 457(g)(3) of the IRC allows public (governmental) plans to use qualifying annuity contracts and/or custodial accounts in lieu of, or in addition to, a trust to satisfy this requirement. A big advantage to the 457(b) plan is that it is not subject to the age 59 1/2 withdrawal rule. This means there is no 10% penalty for early withdrawal at retirement or upon termination of employment. [Note: This benefit applies only to public (governmental) plans. Private plan participants generally will pay federal income taxes when funds are made available to them. They may, however, defer receiving funds and instead be taxed when they actually take distribution]. --- We tell participants to first contribute to the plan that offers a match, at least up to the match. Then contribute to the plan that offers the best investment choices. This is typically the 457(b) because the employer is required by law to be a fiduciary (i.e. act in the best interests of the employee). This also means that most likely the employer has put the plan out to bid. Such a process often results in vendors lowering cost structure. The 403(b), on the other hand, is more often than not characterized by numerous high fee insurance and brokerage offerings. Good luck. Dan Otter
  8. Thanks Jyork, This is the first I have heard in the 403(b) world. Do you have any more details? How are they educating employees about the availability, workings, etc.? Thanks. Dan Otter
  9. Hey RJSwingle, A lot of folks have been asking about the Roth 403(b). The only information we have from Treasury is this story. We have heard of no employer offering a Roth 403(b). Even on the 401(k) side the appetite for this new product seems small. This is not to say that these investment tools will not be popular in the future. It just seems that all employers are taking a wait and see approach. I would be interested to hear if anyone knows of an employer offering a Roth 403(b). Dan Otter
  10. Greetings all, After one week and many, many headaches the Discussion Board is back. We are still in the process of updating but posts can now be made. Again, we apologize for the inconvenience. Dan Otter
  11. Imity and Joes, Just as it is wrong to say that all advisors are bad it is equally wrong for Joes to say that if you go with a cheaper company you will get a "Cheap product." Not so, unless his definition of a "cheap company" is one that sells products witout disclosing costs and surrender charges, pushes loan provisions, plays on fear, and tells investors to "Just go for it!". The order of the day is due diligence. If you are going to use an advisor you are going to get more face to face services than you will with a direct purchase product (such Vanguard, T. Rowe Price etc.). It should be noted that these direct purchase companies have toll free lines where questions can be asked and answered. You will also most likely pay more for the agent approach. The key is to find out exactly what services you are getting and exactly what fees you are paying. Only then can you make an educated decision. You may come to the conclusion that the agent approach is best for you. Joes speaks in broad generalizations that I think are dangerous and self serving. It is not true that most advisors will tell you to "beat it" if you don't have $250,000. We know that most 403(b) products are sold via agents, and we know most balances are well below $250,000 (Spectrem Group). It is not wise for him to tell you to "just start your account." While it is true that the longer you wait to invest, the less you will accumulate. However, it is not true that each day you wait will cost "tens of thousands of dollars." As Suze Orman says "It is better to do nothing with your money than something you don't understand." I encourage you to educate yourself now and then make a decision soon. His comment "You'll save maybe $10 a year (going with a "Cheap product") based on a small contribution and risk losing it all based on poor decisions" is wildy off the mark. When it comes to investing you can control exactly two things: the products you choose and the cost you pay. You can choose wise investments and save thousands of dollars over time by going with quality lower cost products. I encourage you to read Teachers' Investment Plans Flunk which details how two identical products (a variable annuity product and a mutual fund) have very different costs which add up over time. Joes last comment "Just go for it!" is probably the most dangerous. He seems to be saying: Just do anything with MetLife and forget about it!!!!!! Dan Otter
  12. Hey Spiderman, The procedure is called a 90-24 transfer. Click the link to learn more.
  13. Hi Lynn, This is a tricky question and seems to vary by institution. I have worked as an adjunct at two universities: California State University Fullerton (taught three classes a semester) and American University (taught up to two classes a semester and supervised student teachers) in Washington, D.C. At CSUF, which is a public institution, we were allowed to contribute to the 403(b) plan, at AU, which is private, we were not allowed. I can't say if the public/private designation made a difference. AU did say that my load (2 classes and supervision of student teachers) didn't add up to 20 hours a week. I of course did not agree with this assessment. I know this doesn't answer your question, but I thought I would share my experience. Dan Otter
  14. Dan Otter

    Vendors

    Hey Mike, Welcome back. Go to 403bcompare to get information. On the right hand side select "Find a vendor" and then search each of the products you listed. I don't believe you can find info on Kemper here. Instead go to their site. Dan Otter
  15. Hi Armand, Take a look at this this story on transferring to an outside of plan vendor. Dan Otter
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