Jump to content

bigred

Members
  • Content Count

    108
  • Joined

  • Last visited

Posts posted by bigred


  1. I appreciate the advice and help. It's time I contact payroll again.

     

    Since my last discussion with her I've ahd contact with three of the vendor reps. Although I am not the most informed person in this area, I believe the reps figured out I pretty much knew what I was talking about in regard to high vs. low cost products. At that point all three told me they had nothing in the category of low cost prodcuts and should invest outside the 403b. That's not a good thing to hear.

     

    I'd like to ask one more thing of you folks if I could. Employer Admin. Services is our TPA. Their rep told me to submit names of possible vendors to my district and if they signed the agreement the company could be added.

     

    Does anyone with experience with EAS know of a vendor that has been added that would be considered a low cost vendor? Or can someone suggest a company that I mention to the district as a possible vendor?

     

    Our list consists of Horace Mann, Met Life (our new superintendent's choice), ING ING ReliaStar, Valic, Security Benefit, Ameriprise and I have asked about Fidelity, Vanguard, and Tiaa-CREF(these are not willing to sign on).

     

    Again, any advice is appreciated.

     

    There is a way that you will likely have access to and it is through a company called Aspire Financial. https://www.aspireonline.com/

     

    I know they have worked in a bunch of scenarios with TPA's similar to yours. They basically have access to a mutual fund platform with 20,000 choices. They charge something the $40/hd and 15 basis points so there is a little cost but that is miniscule compared to the insurance crap and the fund company would charge something annually until your account reaches a certain level anyway.


  2. Bob and Big Red,

     

    I have most of my tax deferred in a roll over IRA and have about $50,000 in a Roth. I am 65. To convert some or all of my roll over IRA would invite a tax bite and thus reduce my over all principle for future growth. You have to run some numbers for me to see a benefit in doing this now. I am happy leaving the it in for the next 6 years tax deferred and then control the amount at 70.5. If I knew that taxes were increasing significantly, then I would think about converting. But nobody knows the future, unfortunately.

    Of course, there is merit with what you are say, for example, if you are leaving it all to heirs, but I have no heirs and plan on leaving what ever is left (if I am lucky) to charity. I don't see the benefit for me as I already have $50,000 in Roth right now. To increase my Roth now would be counter productive.

     

    Is there something else I am missing or are you only talking with people who have heirs?

     

    Steve

    Steve, From what I glean about your situation I think you are on the right path. The end game of your money will go to a user that will no tax liability so deferring it as long as you can and only taking minimums make sense.

     

    The conversion strategy make sense if you have an estate tax issue and/or will have more than enough resources to survive. The fact that you do not need to take RMD's from Roth allows for a large amount of accumulation in framework that can allow large amounts of money to accumulate that has no tax paid against it. Also, when when people get up in age their tax rate is often lower than the heirs that will have to take it out in future years so there is an arbitrage opportunity if A is at 15% and the beneficiaries are at 28% it and you want to pay now. And it can stay tax qualified in the roth.

     

    Does that make any sense?


  3. A teacher in Ohio is trying to get fee information for the following products. He has already looked at www.403bcompare.com and found that many of these firms are not listed there.

     

    Here's what he wrote: "Here is a list of the providers I am trying to research. I am primarily looking for the companies that will offer my co-workers the lowest fees possible and are not Annuity companies, but rather offer a menu of low cost mutual funds."

     

    The TDS Group

    The Legend Group (on 403bcompare)

    Circle Trust

    Anchor National Administrative Services

    Franklin Templeton (on 403bcompare)

    Capital Bank and Trust

    Reserve Financial

    Ameriprise Financial (on 403bcompare)

     

    If folks could post any information about these firms — especially personal experience — that would be very helpful. Thanks!

     

    Dan Otter

    TDS Group is an administrator not a vendor if I'm informed of the right group.

    Capital Bank and Trust is the main custodian for American Funds.


  4. Dan, Steve Etc

     

    Would you know the answer? Can a 403bplan document keep employees from pulling their money out at 59.5 years of age if its stated by the IRS that you can?

     

     

    Tony

    Yes they can limit the timing of a distribution to death, disability or termination. The IRS states lots of things but it all revolves around individual situations, which in these cases are individual plan docs. In 403bs you oftentimes are allowed the 59.5 provision but that does by no means make it the standard across the country. I would agree that most 403bs allow for the 59.5 but it is not near 100%. In the 401k world I don't know of any #'s but I would be fairly confident it is way below 50% allow for taking it out @ 59.5.

     

    http://www.investmentnews.com/article/20130407/REG/304079976

     

    Just because you understand how to move your balance into a similar/better option when you roll out does not mean that most of the population does, actually quite the opposite. The rollover business is where big amounts of variable and equity indexed annuites sales are generated from. I think most people will agree that is generally not in peoples best interest so I think you will see more attempts to restrict withdrawals at that age based on trying to keep them out of those generous products for the insurance industry.


  5. Big Read

     

    Thats true possibly but they can't force you to not transfer it out of the 403b plan at 59.5 can they?

    Yeah they can. The overall plan document can restrict in-service withdrawals if they so choose. The plan doc governs all contracts as part of the plan.


  6. So once I hit 59 1/2 I can roll everything out of the 403b and into my IRA, right? But I can still keep contributing to my 403b, then rolling it over year by year?

     

    It depends if the plan document allows it or not. Some plans restrict that just for the reason you are referencing above.


  7.  

     

    You are asking some of the most complicated questions in administering a 403b so you will want to make sure you get to someone who knows what they are talking about. You will want to figure out who the 3rd Party Administrator for your district is because they will be able to guide you through the transaction. They should be able to answer the question about whether or not it is in the plan docs and if it is be able to help calculate it.

     

    You are asking some of the most complicated questions in administering a 403b so you will want to make sure you get to someone who knows what they are talking about. You will want to figure out who the 3rd Party Administrator for your district is because they will be able to guide you through the transaction. They should be able to answer the question about whether or not it is in the plan docs and if it is be able to help calculate it.

    Thanks for the reply.

     

    Well, it sounds like you're saying whether or not the school allows the $3,000 contribution catchup is up to the school's 403b plan (as administered by the TPA). I've never heard of a TPA or school that didn't allow age-based catchups, so I wasn't sure if I could make the same kind of assumption about "lifetime" catchup payments.

     

    The rest of my questions were particular to the IRS rules and shouldn't have anything to do with the school/TPA unless they make the rules more restrictive.

    Correct on whether or not it may allow it. It is a complicated calculation and I know some attorneys encouraged schools not allow it. The age based catch-up of $5,500 for 2013 is standard but not necessarily this piece.


  8. You are asking some of the most complicated questions in administering a 403b so you will want to make sure you get to someone who knows what they are talking about. You will want to figure out who the 3rd Party Administrator for your district is because they will be able to guide you through the transaction. They should be able to answer the question about whether or not it is in the plan docs and if it is be able to help calculate it.


  9. Is this guy over 75? Is that why you are avoiding the Vanguard one? If so he might want to try to "get tough' with Prudential. They shouldn't sell a variable annuity with big surrenders to someone so old. Otherwise you can calculate the cost of this guarantee which looks like would cost 1.9% @ Fidelity and he could purchase life insurance for that amount and be in roughly the same place because that is what he is in essence doing.


  10. Hello Everyone. You guys are the best. Well, after talking to our district payroll supervisor and a consultant at WEA Trust, I think the switch for both of us to a Roth 403b was the culprit. We are properly withheld. To try to smooth things out I am leaning toward leaving my wife on the Roth 403b and switching mine back to a regular 403b. Therefore, our AGI will be lowered and we could once again pick up a number of credits that were not available to us this year. I work a summer job in addition to teaching. I will then put extra cash into the Roth IRA. Make sense?

     

    Bill

    If you're getting phased out on some of those credits by all means jack that back up to bring down AGI and that will help make you eligible for the Roth IRA. I still have never heard anyone regret moving money into a roth.


  11. One thing you are not talking about is eligibility for a Roth IRA. If you have the funds and your combined income isn't above about 170k you can fund the Roth IRA's to the tune of 11,000 for 2012. I feel that with the current situation of our country I think tax(I know it is a bet, although a bet on current historically low rates) rates will be higher in the future for everyone so the Roth locks it in now. You also don't have to take RMD's out of Roth IRA's so big advantage.


  12. Ok, so learning more on these forums, i changed my 403b provider from AXA Equitable (had a 1.2% mortality charge + 0.6/0.7 for their INDEX funds - so nearly 2% a YEAR charge!!) to American Century... a local mutual fund company (the only NON-life insurance company i could pick from).

     

    I don't love American Century because they don't have any index funds, but they have some very reasonable mutual funds with 0.6-0.9% expense ratios without the insane 1.2% mortality charge.

     

    So it's no vanguard, but it seems like with this 403b stuff it's all about picking the least bad option... and never a great or excellent option.

     

     

    So i ceased making contributions to AXA and started making contributions to American Century, whom I'm satisfied with so far.

     

     

    I don't have very much money over at AXA... it's about 40K.... and i contacted them on what it would cost me to switch... it would be about $1800 unless i want to leave the money there for another 4-5 years.

     

     

     

    Would you bite the bullet and transfer the money now? or let it sit until my 5 year waiting period is over and then make the transfer?

     

     

    I'm 29 if that makes any difference.

     

    You're going to pay it now in the surrender or later through the higher costs for a longer period. I think Tony has the right idea, just do it and move on.


  13. We finally decided to contact an attorney that specializes in 403(b) plans and he'd never heard of anyone splitting a plan into 3 plans to get the numbers down and avoid an audit (and related costs), but his "gut feeling" was that it wasn't legal. However, he's going to research it and find out for sure.

     

    If you've gone as far as to engage an attorney ask him also what you can do to avoid ERISA, if possible. By avoiding ERISA you avoid the 5500 and audit fees.


  14. FYI it is not going to take 15-30 but more like 2-3 hours(if they received good information the 1st time), especially when considering you have two vendors. I'm guessing the 401k referenced is a single vendor plan. $1000 is too much and $500 would be about right.

×
×
  • Create New...