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Valic Fixed Account Plus

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Unfortunately, I have found that Valic happens to offer the lowest fees compared to the other tax-defered companies my school system uses. I'm not willing to pay the fees associated with their annuities, but need to contribute to a tax defered fund to free up as much money as possible to pay off a mortgage at the same time.

 

 

Does anyone out there have experience putting thier money in VALIC's "Fixed Account Plus" fund? It looks as though it does not involve any fees? That's what a Valic representative told me, and I have not found anything to the contrary. I noticed that this fund has been recommended on other posts here.

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Does anyone out there have experience putting thier money in VALIC's "Fixed Account Plus" fund? It looks as though it does not involve any fees? That's what a Valic representative told me

 

 

VA,

 

This is one big red flag. No fees at all? VALIC, not surprisingly, is a money making company. How would it make money if it did not charge any fees?

 

I would be EXTREMELY suspicious! I would pin down the Valic rep and specifically ask about the following fees:

 

- Front end load

- Surrender fees

- Mortality and expense fees

- 12b-1 fees

- Account administration fees

- Management fees

- Loan application fees

 

Furthermore, I would specifically ask the rep how he is being compensated by your investment. Don't be bashful. It is your money.

 

Let us know what you find out.

 

 

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What are the other vendors approved by your school district?

 

Have you contributed to an IRA?

 

You can also invest outside a 403b in a non tax advantaged fund that is very tax efficient such as a total stock market index fund.

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The other providers my school system uses (besides Valic) are Great American Life, ING, Lincoln Financial, Metlife, Mutual of New York, NEA Valuebuilder, and USAA Life Insurance Co.

 

I am thinking of putting money in a non tax defered acocunt such as the Vanguard 500 and an IRA with Vanguard. And in the mean time press my school system to use more competitive providers.

 

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The other providers my school system uses (besides Valic) are Great American Life, ING, Lincoln Financial, Metlife, Mutual of New York, NEA Valuebuilder, and USAA Life Insurance Co.

 

I am thinking of putting money in a non tax defered acocunt such as the Vanguard 500 and an IRA with Vanguard. And in the mean time press my school system to use more competitive providers.

 

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One other possibility, and I have only see this with a credit union which offered IRAs, is that there really are no fees because the provider is expecting to make a lot of money off your investments being only essentially in a money market fund. Now that doesn't sound great but if there are truly no surrender fees then once money has been put in such an account, at least it was this way in the CU offering, then you can freely transfer these funds into any other companies 403b and maybe IRA. Some people use the CU approach to have access to fund companies not covered by their 401k plan. It is a two step process but it can work in the right circumstances.

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The other providers my school system uses (besides Valic) are Great American Life, ING, Lincoln Financial, Metlife, Mutual of New York, NEA Valuebuilder, and USAA Life Insurance Co.

 

I am thinking of putting money in a non tax defered acocunt such as the Vanguard 500 and an IRA with Vanguard. And in the mean time press my school system to use more competitive providers.

 

 

Wow, talk about the usual list of suspects. Valic, Galic, Baloney Builder ... all that's missing is Modern Woodmen of America.

 

You may well find that your district is receptive to providing alternative companies. I've seen it happen before. It is definitely worth a try.

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Does anyone out there have experience putting thier money in VALIC's "Fixed Account Plus" fund? It looks as though it does not involve any fees? That's what a Valic representative told me

 

 

VA,

 

This is one big red flag. No fees at all? VALIC, not surprisingly, is a money making company. How would it make money if it did not charge any fees?

 

I would be EXTREMELY suspicious! I would pin down the Valic rep and specifically ask about the following fees:

 

- Front end load

- Surrender fees

- Mortality and expense fees

- 12b-1 fees

- Account administration fees

- Management fees

- Loan application fees

 

Furthermore, I would specifically ask the rep how he is being compensated by your investment. Don't be bashful. It is your money.

 

Let us know what you find out.

 

 

I have placed all my assets in the fixed account because the agent gets no commission. In fact, you have to ask for the fund. It is not disclosed under funds. It may be found under fund performance next to last on the list. This is a temporary measure as our school system is in the process of selecting a NEW VENDOR. HOORAY!! However, due your own due dilligence. There is nothing consistent or transparent with Valic. I will be on the committee to make recommendations for our new vendor. I promised my fellow teachers one thing. I will under no circumstances endorse or recommend Valic or any other insurance firm as a provider.

 

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VA

 

The other providers my school system uses (besides Valic) are Great American Life, ING, Lincoln Financial, Metlife, Mutual of New York, NEA Valuebuilder, and USAA Life Insurance Co.

 

 

USAA is a no load, and charges low annual expenses, and is a good choice for 403b.

 

You can also invest in a IRA. If your resources are limited and you are relatively young, do a ROTH IRA first, then 403b.

 

Press your district for Vanguard or Fidelity. I think that there are form letters at this site.

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I have been reading this forum for a couple of years but have never posted until now. One of the MAJOR downsides to the VALIC "Fixed Accounts Plus" fund is that should you EVER want to transfer your money from this fund to ANYWHERE else (Another Valic product, some other vendor that your district might approve later on or anywhere else if you seperate from service at your current employer) you MUST do so over a 5 year period (or longer...regardless of how long your money has been in that account). Valic only allows 20% of the total money in this account to move to another place every year. When planning to move the total amount you take 1/5th of the amount in the account the first year and THAT SAME AMOUNT for each of the following four years (if you gain money in that account during the five years you may actually have to wait until year 6 to finally be free). I know this personally as I left employment in one school district (K-12) and took a job at a community college. When I changed jobs my new employer offered Fidelity and I wisely went with them. It was an incredible pain in the @$$ to get Valic to set up an automatic transfer for five transfers over five years but after many phone calls I found a manager type person who set this up for me. I am sure the account might look relatively attractive to you now but be sure to read all of the fine print. I know that my money that is sitting in their now is earning about 1% interest or something pathetic like that. I believe the fund is set up to reward "new" contributions with higher rates of return. Since I haven't contributed to it for a few years, it is earning next to nothing. In my case it really isn't that much money BUT if it was I would REALLY be hurting my retirement savings.

 

 

 

 

 

 

Unfortunately, I have found that Valic happens to offer the lowest fees compared to the other tax-defered companies my school system uses. I'm not willing to pay the fees associated with their annuities, but need to contribute to a tax defered fund to free up as much money as possible to pay off a mortgage at the same time.

 

 

Does anyone out there have experience putting thier money in VALIC's "Fixed Account Plus" fund? It looks as though it does not involve any fees? That's what a Valic representative told me, and I have not found anything to the contrary. I noticed that this fund has been recommended on other posts here.

 

 

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You are preaching to the choir apteacher. Having read many articles and forum posts on this site over the past couple of years (along with Dan's book), I realized that, in my misguided early years as a teacher, I had made just about every investing mistake possible. A teacher at my high school was a "part time" agent for MANY companies that offered TSA's through our district and he got many of us involved with saving for retirement. This was a GOOD thing from the standpoint that many young teachers don't even bother to think about the value of investing early on in one's teaching career. Unfortunately, I would learn much later, he was signing everyone up for products that paid HIM significant commissions (and we all know who really pays for those commissions now don't we). My first company was Jackson National Life where I contributed to a TSA AND purchased a life insurance policy with a "vanishing premium" (don't ask me what I was thinking when I was 24 years old). The very next year this teacher/agent had found a "fantastic" product....a double-tiered TSA (GALIC) that would pay a "bonus" of 3% if you met certain criteria at the end of 10 years. Of course I stopped contributing to Jackson National and signed up for the GALIC double-tiered TSA. Many other teachers did the same earning our fellow teacher/agent some nice $$$. A few years later this same agent returned with some other great ideas. It was at this point I realized what was going on. The agent couldn't make any real money unless his customers (teachers) were constantly signing up for new products with new companies. His main mistake was not realizing that all of us had bought into this 10 year double tiered B.S. he had sold us so we knew we needed to keep contributing to it in order to get our 3% bonus at the end of a decade. Needless to say I just continued to contribute to my GALIC double-tiered TSA for the next few years. I ended up leaving that school district to go teach at a local community college and was (initially) horrified that they didn't have GALIC as one of their vendors. I was 6 or 7 years into my 10 year plan and could no longer contribute (there went that 3% bonus!). Out of frustration I signed up with VALIC upon starting the community college because it was most convenient (you know....the agent dropped by my office and had all the paperwork I needed etc.). Fortunately, after two years , I made it a point to finally educate myself on 403(b) retirement accounts and found out what a mess I was in. I "fired" VALIC and started to contribute to a Fidelity account (fortunately my community college had Fidelity as a vendor) that I set up for myself through a 1-800 number. I transferred my GALIC money (at the end of 10 years...the surrender period...without of course my 3% bonus) to Fidelity and did the same with my Jackson National and VALIC money (except of course for the Fixed Account Plus money). I never bothered to go back and figure out how poorly my money had done for 10 years with GALIC in that double-tiered TSA...the medication for the depression that I would have gone into would have been too expensive. I am VERY pleased NOW with Fidelity and my wife (who works in a K-12 district) has taken her money out of VALIC and now has a Vanguard account.

 

By the way....What was I thinking taking financial advice from a "part time" agent? Have any of you ever had dental work done by a "part time" dentist?

 

 

 

Samson,

 

It makes a person wonder just whose money it is, doesn't it?

 

VALIC, GALIC ... what pathetic products they offer.

 

 

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You are preaching to the choir apteacher. Having read many articles and forum posts on this site over the past couple of years (along with Dan's book), I realized that, in my misguided early years as a teacher, I had made just about every investing mistake possible. A teacher at my high school was a "part time" agent for MANY companies that offered TSA's through our district and he got many of us involved with saving for retirement. This was a GOOD thing from the standpoint that many young teachers don't even bother to think about the value of investing early on in one's teaching career. Unfortunately, I would learn much later, he was signing everyone up for products that paid HIM significant commissions (and we all know who really pays for those commissions now don't we). My first company was Jackson National Life where I contributed to a TSA AND purchased a life insurance policy with a "vanishing premium" (don't ask me what I was thinking when I was 24 years old). The very next year this teacher/agent had found a "fantastic" product....a double-tiered TSA (GALIC) that would pay a "bonus" of 3% if you met certain criteria at the end of 10 years. Of course I stopped contributing to Jackson National and signed up for the GALIC double-tiered TSA. Many other teachers did the same earning our fellow teacher/agent some nice $$$. A few years later this same agent returned with some other great ideas. It was at this point I realized what was going on. The agent couldn't make any real money unless his customers (teachers) were constantly signing up for new products with new companies. His main mistake was not realizing that all of us had bought into this 10 year double tiered B.S. he had sold us so we knew we needed to keep contributing to it in order to get our 3% bonus at the end of a decade. Needless to say I just continued to contribute to my GALIC double-tiered TSA for the next few years. I ended up leaving that school district to go teach at a local community college and was (initially) horrified that they didn't have GALIC as one of their vendors. I was 6 or 7 years into my 10 year plan and could no longer contribute (there went that 3% bonus!). Out of frustration I signed up with VALIC upon starting the community college because it was most convenient (you know....the agent dropped by my office and had all the paperwork I needed etc.). Fortunately, after two years , I made it a point to finally educate myself on 403(b) retirement accounts and found out what a mess I was in. I "fired" VALIC and started to contribute to a Fidelity account (fortunately my community college had Fidelity as a vendor) that I set up for myself through a 1-800 number. I transferred my GALIC money (at the end of 10 years...the surrender period...without of course my 3% bonus) to Fidelity and did the same with my Jackson National and VALIC money (except of course for the Fixed Account Plus money). I never bothered to go back and figure out how poorly my money had done for 10 years with GALIC in that double-tiered TSA...the medication for the depression that I would have gone into would have been too expensive. I am VERY pleased NOW with Fidelity and my wife (who works in a K-12 district) has taken her money out of VALIC and now has a Vanguard account.

 

By the way....What was I thinking taking financial advice from a "part time" agent? Have any of you ever had dental work done by a "part time" dentist?

 

 

 

Samson,

 

It makes a person wonder just whose money it is, doesn't it?

 

VALIC, GALIC ... what pathetic products they offer.

 

 

Samson:

According to my contract, when I am terminated or discontinue service, my money is transferable. If this five year rule exists in our contract it is unwritten. My understanding is when the current contract is up in December all assets will be transferable, as Valic will no longer be an approved vendor.

There are no surrender fees with our contract.

FB

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Samson,

 

Your story hits home with many on this forum. I, too, bought into a GALIC two-tiered annuity. The difference is that my surrender charge NEVER ends. How naive I was! Like you, however, I educated myself and got away from that pathetic product. The agent who sold me that TSA, however, is still up to his old ways in selling annuities. He has done very well for himself.

 

 

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