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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.
Hey all, It's finally happening: We are launching an Advisory Directory made up of CFPs knowledgeable in the 403(b) and 457(b). If you know any advisors who might be interested please share: http://403bwise.com/advice/advisor_request It will take time to build a national network but we are confident we can help provide a valuable resources for those looking for quality advice. - Dan
Good afternoon, I recently stumbled across the "Teach and Retire Rich" podcast and the NYT article on 403B accounts, which lead to me to this website and what seems like a wonderful and helpful community of people. I also became a father in June, which has made me want to take stock of my family's overall finances a bit more with a unified plan. I am not sure if this is the appropriate forum for my questions, but any advice, guidance, or tips would be greatly appreciated, as I get the sense from the podcast that many educators are grappling with the same issues. Like so many others on here have likely experienced, when I started teaching nine years ago at age 21, I signed up for a 403b account through a representative who showed up at my school without really understanding fees or the long-term financial implications; I heard retirement savings and thought it sounded responsible, so I just did it. In going back and assessing it now, I am hoping for help with 3 questions: 1) If I want to get out of the annuity products / company I am with, what is the best way to do so? I am currently signed up for the MetLife Financial Freedom Select, with a large portion of each contribution going toward a fixed income account. There is currently about $22,000 in the account, and I am not sure what the tax / fee penalties would be to switching a different provider and away from an annuity structure. My wife works for a hospital system and also has a 403b with an employer match, so we max that out; my plan is a supplement to that plan. I also am part of the NJ state pension system at the Tier 2 level. 2) Of the list of providers my school contracts with, does anyone have experience with them or recommendations as to which are best / low fee? Here is the list provided by my payroll department: 403(b) Company Name VALIC AXA Equitable Lincoln Life Met Life Security Benefit Lincoln Investment Planning USAA 403(b)(7) Company Name Aspire 403(b) (formerly 403 ASP) Security Benefit/NEA Valuebuilder AXA Equitable/Pen Serve Lincoln Investment Planning 457(b) Company Name AXA Equitable 3) Is it a good idea to pay for the advice / services of a NAPFA fiduciary in my area? I like researching things myself; however, I feel it may be wise to pay a professional for an initial assessment as I change 403b's and look into setting up a college fund for my daughter and potentially a Roth account. Does anyone have any experience using a CFP as a fiduciary or a recommendation of a good one in the central NJ area? I know there is a lot of information in here, but I am feeling a bit overwhelmed and this seemed like a helpful forum, so I figured it was worth a s. Thank you to anyone who takes the time to read / respond. - Nick