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Joshuaj22

Have Roth Ira, Looking To Start A 403(b)

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Hello All,

 

First time posting. Here's my story; my wife and I have Roth IRAs with SmithBarney and are probably looking to get out of it and into something with lower fees. Admittedly going with Primerica was a bad move and I'm going to pay for it. But I'm 29 and I think that taking a hit now is worth it. In addition I'm looking to begin investing in a 403(b) with one of the lower-cost groups such as Vanguard, TRP, etc. Recently I sat down with an Edward Jones agent and she recommended American Funds for both my 403(b) and Roth. It made sense to me, but the as I do research the more overwhelmed I get. Advice?

 

Josh

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Hi,

If I am correct, you paid a load to put your money into Primerica. Now another agent wants you to open an account with American funds that also has a load. You are not going with a low cost provider that way. You can easily transfer your Roth IRA over to Vanguard without paying a load. Just call Vanguard and have them send you the forms.

 

What vendors are available to you from your employer for the 403b? You need to go through your employer to invest in a 403b. The Roth IRA you do on your own.

 

It is easy to feel overwhelmed at first, but investing on you own without the help of an advisor is certainly possible. If you feel the need to use an advisor, then find a fee-only advisor in your area to help you. You pay that person directly. The fee-only advisor should be directing your funds into low cost mutual funds such as Vanguard.

 

In the meanwhile, it is important to start educating yourself about investing. You can do this by reading some of the books on this website: http://www.diehards.org/ and also the book offered on this site: Teach and Retire Rich by Dan Otter. The Diehard website is a sister site to Morningstar.com. The Vanguard Diehard Forum is a good place to read and ask questions about investing. Keep asking questions. After all, it is your money. Best Wishes.

 

Joe

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Hi,

If I am correct, you paid a load to put your money into Primerica. Now another agent wants you to open an account with American funds that also has a load. You are not going with a low cost provider that way. You can easily transfer your Roth IRA over to Vanguard without paying a load. Just call Vanguard and have them send you the forms.

 

What vendors are available to you from your employer for the 403b? You need to go through your employer to invest in a 403b. The Roth IRA you do on your own.

 

It is easy to feel overwhelmed at first, but investing on you own without the help of an advisor is certainly possible. If you feel the need to use an advisor, then find a fee-only advisor in your area to help you. You pay that person directly. The fee-only advisor should be directing your funds into low cost mutual funds such as Vanguard.

 

In the meanwhile, it is important to start educating yourself about investing. You can do this by reading some of the books on this website: http://www.diehards.org/ and also the book offered on this site: Teach and Retire Rich by Dan Otter. The Diehard website is a sister site to Morningstar.com. The Vanguard Diehard Forum is a good place to read and ask questions about investing. Keep asking questions. After all, it is your money. Best Wishes.

 

Joe

 

 

Hi, Josh,

 

Gee, that Joe is a smart guy! Not surprisingly, then, I agree with everything that he said. But here's another deal. You're 29, and you have lots of important things to do right now (educationally, housing, relationships, building family, getting squared away in your career and so on). You are asking all the right questions about 403(b)s and investing. You will spend many years finding and refining the concepts, so you don't have to have "all the right answers" right now. You can make a good start by visiting with your payroll office for the list of 403(b) vendors, take the list to the library and look them up in Morningstar, and pick a "family" of funds that's no-load. Or go to a fee-only advisor for advice on picking a no-load family; in the end you will pay far less than you will with Edward Jones, Primerica or other investments that offer an advisor to talk to in person. Either way, transfer those $$ you have into a no-load family; once in, you can move around between funds as you refine your allocation and build your portfolio.

 

Then you can relax and your investing education can proceed... it will be an fascinating and mind-expanding trip. And you will meet lots of smart and interesting people along the way -- like Joe!

 

Judy Schneider

 

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If your district allows it, look into Franklin, Oppenheimer and Vanguard for fund groups. I like Franklin and Oppenheimer best.

 

They all have lots of funds and many have no or tiny cost. My husband and I (60+ years together in teaching). We have no cost, others a small cost for SAM (stategic asset management: they roll the funds to make more money) and at least 5 are open funds (but NOT TAXED) On the open, we can take loans and pay them back. We may have to access monies later, only the penalty is ve4ry minimal at the age we expect.

 

Put your full amount into the Roth and find low cost funds to 403(b) in. We both put in full amounts from our 20s and it enabled us to both retire in 50's.

 

Our district allowed rolling funds from group to group; had we had a problem fund as you do, it could have rolled to another, no cost, as long as a 403(b)

Edited by RetiredTeacherNEA

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Hi Retire teacher, Welcome to the site. As I understand Franklin and Oppenheimer offer funds that incur loads and have hidden fees such as 12b-1 so are poor choice for the investor.

 

On the other hands Vanguard is the leader of low cost , no load funds for the investor, and is a great company to use as a vechicle for investments.

 

Basically, the main thing that an investor can control is the cost outlay. Load funds cost a lot more than no load, low annual expense funds. With no load fund companies the investor realizes a lot more gain over time.

Edited by ira

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Hi Retire teacher, Welcome to the site. As I understand Franklin and Oppenheimer offer funds that incur loads and have hidden fees such as 12b-1 so are poor choice for the investor.

 

On the other hands Vanguard is the leader of low cost , no load funds for the investor, and is a great company to use as a vechicle for investments.

 

 

 

ira:

there are load and no load in all of the funds. We have had all 3 plus waddell&reed ( didn't like them at all). Some Franklin and Opp. are w/out hidden cost.

 

 

 

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there are load and no load in all of the funds.

 

 

 

Vanguard is exclusively a no load fund company. Additionally there are no 12b-1 fees or any other hidden costs. The annual expenses are overall the lowest in the industry because of Vanguard's corporate structure which is unique.

 

If you access www.403bcompare.com whcih is put out by the state of ca you will be able to see various 403b funds and companies including costs to the investor.

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We have no cost, others a small cost for SAM (stategic asset management:

 

 

Hi again, I'm not familiar with SAM. Is that a wrap around fee over what is paid for each of the funds in your investment. What is the cost for SAM?

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