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  1. Hello. I'm hoping for some advice. About 3 years ago at a school event, I won a raffle for free financial planning from a certified financial planner with 25 years experience. It was listed at a value of $1500. My wife and I, both teachers, were thrilled as we knew nothing about finance. We had our pension plans and no other investments. He took all our info, evaluated our risk tolerance, and produced lots of charts and graphs. We thanked him repeatedly. He said he was just hoping to get some good word of mouth. Having young children, he suggested life insurance. We agreed. Next, he suggested that we start contributing to our 403b. Our district has 401k and 403b options. When asked why he suggested the 403 over the 401k, he said that it had better fund options. We didn't know the difference. Unfortunately, we had no clue what to ask during this process. He set the plans up and we agreed to them. As you probably guessed, we each ended up with a variable annuity which we didn't understand. We thought the word annuity was basically a synonym for 403b (Tax Sheltered Annuity). It wasn't until this year, after researching, that we realized what we had....an insurance product with high fees that weren't discussed during the process. I am kicking myself for not doing my research earlier. I know we were naive in failing to see this as a sales situation vs. an advisory one. We were under the impression that all fees were waved due to the raffle and he would pick the best funds for us. I have confronted him that I feel taken advantage of. I was not nice. He maintains that the annuity provides for our retirement in a sound and responsible manner. Now I am conflicted. Is it possible that he truly believes this is a good investment for us? Was I out of line to suggest otherwise? My head says I'm right, but I still feel guilty for some reason. We really liked him and thought he had helped us.
  2. Hi, I just went to a district sponsored meeting during our professional development days in Santa Barbara, California and now I'm super confused. The workshop was lead by a rep from Planmember Services, and when I brought up the fact that CalStrs Pension2 is a low-fee option for a 403b plan, he said it was an annuity, and that they charged M & E expenses in addition to fund expenses. (He had earlier indicated displeasure in general with annuities.) I wanted the other teachers in the room to know that Pension2 was a low-fee option, but he definitely seemed to downplay it, and cast it as an annuity that charged both insurance fees and fund fees. When I approached him after the meeting to say that I wasn't being charged M & E fees, he said that the administrative fees of .25 a year were essentially M & E fees, and that Voya was an insurance company, thus the product was an annuity, or at least, LIKE an annuity. I have my 403b Pension2 contributions mostly in Vanguard mutual funds with some bond and inflation-protected securities. I know other teachers have invested with this particular rep in Planmember services and they're being charged 1.75 to 2% a year in fees. Our district lets him run workshops and come to faculty meetings on a regular basis. What do I need to know, and what am I misinformed about? Do I indeed have an annuity, and is that something I should question? Would it be better for me to go straight to Vanguard instead of using Pension2 (they are on my district's list of vendors, as are most of the products I'm invested in). Thank you for your help.
  3. [The information below is in reference to 403B plans with a school district] I have an advisor who recommends products with LSW (Life Insurance Company of the Southwest). They have varying types of products but the advisor has presented the advantages of 403B accounts with indexed annuities. The annuities also have a rider/lifetime income component called a GLIR. Life Insurance Company of the Southwest (LSW) offers an excellent savings and retirement income solution for employees of non-profit organizations. Our Guaranteed 1 Lifetime Income Rider for 403(b) and 457(b) flexible annuities can provide the annuitant with a Guaranteed Withdrawal Payment from his or her annuity that will last a lifetime…income that cannot be outlived! Can someone explain more why people say "don't go with insurance companies" and "ALWAYS stay away from insurance companies." Is there no good option that you can choose through an insurance company/annuity like National Life Group/LSW? Also, the advisor said that the fees are low with indexed accounts, would that be something I would look for? I always see names like Vanguard and Fidelity but why aren't insurance companies a good choice? According to this bar graph, it seems index funds with low fees can provide some advantageous growth. THANKS FOR YOUR RESPONSES AND HAVE A GREAT DAY!
  4. I'm a first year teacher so everything is new to me. My Dad had been mentioning that I should look into starting a 403b to suppliment my pension when I retire. I was busy enough with being a new teacher that I didn't think about it. Then one day, there were sandwhiches in the lunch room and these people asking me when I wanted to retire. They said 403b and I thought, hey I need one of those. I scheduled a meeting and met with one of their reps. They started off by showing me where my pension would be by the year I retire and how to make up the difference with the income of a 403b. They talked about how the max I can put into a 403b is 18,000 and asked if I wanted to start puting in 1,800 a paycheck. They knew I was a first year teacher yet somhow they thought I could live off whatever was left after taking 1,800 out of my montly paycheck! Crazy. I say I can commit $100 to start and then go from there. They show me the return projection and something seemed off. Then I looked at what the projected return was and it was a crap 3%. Turns out it was an anuity. After having to email and call to get the thing cancled now I am trying to plan what to do next. I have so many options that my District allows but I'm not exactly sure where to start. I have a meeting with School's first credit union as they have a mutual fund option through nationwide. The fees are pretty low but I'm still a little lost. Features Portfolio Rebalancing Managed Account Services Managed Account Services .70% Asset Based Plan Administration Fee .21% Asset Fee .04% or, .44% Participant Recordkeeping Charge Annual fee flat $4.00 There are so many funding options. Not really sure what to do. I don't know if any of you have heard of reddit but they have a personal finance subreddit and this was the advice I was given in terms of how to diversify my mutual fund. For 403(b) funds, I would use: 54% US stocks:81% DFA U.S. Large Company Portfolio 0.08% (DFUSX ) 19% Vanguard Small Capitalization Growth Index Fund Investor Shares 0.24% (VISGX) 36% Nationwide International Index Fund Class A 0.7% (GIIAX) 10% Dodge & Cox Income Fund 0.43% (DODIX) Would appreciate any feedback!
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