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More Questions From A Neophyt

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Thanks much for the responses to my earlier post.

I picked up the prospectus from the Valic rep today and tried comparing it with some info I downloaded from the Vanguard site. Valic does offer 7 of the Vanguard mutual funds under their Variable Account Options. They also provide a chart showing total expenses on a $1,000 investment (without a surrender charge) assuming a 5% return. As an example, the Vanguard Lifestrategy Growth Fund would cost $13 for 1 year, $41 for 3 years, $71 for 5 years and $156 for 10 years. Am I correct in assuming that an investment of twice that amount would double the costs?

Vanguard’s plan charges a flat fee of $15 a year per fund regardless of the amount invested. If I am correctly understanding Valic’s prospectus, it looks like it would be very much more expensive than Vanguard’s plan.

I also noticed that Vanguard calls their plan a 403(b)(7). How is that different than a 403(b)?

I’ve gone ahead and purchased the Wise Guide to 403(b). So hopefully, I won’t be quite. so confused about all this.




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