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Craig B

Fidelity Fund Options

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I have about $9K in a 403b with AXA Equitable in 4.5 years. I've finally been in contact with my "advisor" after 2 months of phone messages and have put him on the line to justify all the fees. He has claimed there are no front load or 12b-1 fees. The M&E and Asset Management fees are just under 2%. If I understand this business correctly, I have to tack on the ongoing expense ratio percentage in order to have the total charges for any one fund. So a .88 % fund expense ratio would make the total charge about 2.78%. On top of that there are 5 different funds with different expense ratios ranging from .6 - 1.019. So each fund has at least a 2.5% expense ratio. WoW! From reading post on this website, I thought there was one total for the whole investment, not different % numbers for each fund. Can someone set me straight here?


I had been wondering if I should transfer funds from AXA if I am at break even or losing $s. I found out from my district that transfers are frozen right now until this business with the new regs gets taken care of. As it stands the surrender charges on my AXA account are set up at 6% in 6 years. Does that mean only in year 7 do I get to 0 surrender charges? Should I wait that long? I have already stopped putting anymore money in and there are no rolling surrender charges.


I'm extremely excited that my district does offer Fidelity and I can do it directly over the phone or online. Now that I know this, how do I proceed to choose which fund is right for me. I'm 44 and will probably teach for another 20 years. Are there some books I should read? Is there a web site or articles here I should read? I do have the Teach and Retire Rich book which has gotten me this far, but I don't want to jump in to quickly and have regrets later. On the other hand I'm on my spring break and would like to take care of this before I get back into teaching and attending grad school.


Any advice would be much appreciated!!!!!!!!




P.s. Sorry for the repost (I had mistakenly posted this in the New Regs Forum)

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I am so glad for you. You get it. You seem to understand that fees are killing your returns.


I would transfer your money over to Fidelity. Are you sure you can't do it? It seems if both AXA and Fidelity are on your list I think you may still be able to do it.


Anyways Fidelity offers many good options. If I may suggest , I would recommend buying one of their Target

Retirement funds. Thats right one fund and your done. They are called Fidelity Freedom Funds. Just pick the date closest your retirement date. Or, you can take a look at their Index funds which only cost .10% Can you imagine that? You are paying around 2.5%. Thats a big difference. Just make sure you diversify if you go with the index funds. The Fidelity Fredom funds are already managed for you.


Please ask all questions you need answers to and we will answer them.




If you have surrendar fees, don't let that stop you. Bite the bullet and move on. Try and save as much as you possibly can. At your age you should try and build your retirement savings. You will be at an advantage doing it through Fidelity. Just keep your expectations in check.

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Try not to put the cart before the horse. First determine what your goals are, and then your asset allocation, i.e., the percentage of money in stocks, bonds, and cash. Then, and only then, should you start selecting funds.


Fidelity is terrific. As Tony said, the target retirement Freedom Funds are a fine option. The expense ratio is in the .60's, far lower than you are now paying.


You could also build a portfolio with Fidelity's Spartan Index funds, which charge only .10. You might consider a mix of the following:


Spartan 500 Index Fund

Spartan Extended Market

Spartan International Index

US Bond Index Fund (although there are some Spartan bond funds, too)


Again, first set your goals. Then set your asset allocation. Then select funds.

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Craig --


You are my favorite poster of the day!!! You asked if there are books you could read -- oh, are there ever! If you could only read one book about 403(b)s, get Dan Otter's book, which you can order from the home page of this site. Note that the changing regs will mean some alterations in the way things work, and it's not all sorted out yet in most districts.


Then here's the next book (or the first one if you want info on a slightly broader basis): Bogle, John The Litte Book of Common Sense Investing. You can zip right over to Amazon and get it. Now if you have one of those deals where you get free shipping if you order a little more, add to your order cart Swensen, David Unconventional Success, A Fundamental Approach to Personal Investment. I promise that if you read and understand these books you will know 80% of what you need to know to be a perfectly successful investor. Not the kind who can go to cocktail parties and brag that you found the next Microsoft, but successful nonetheless.


We at our house have been moderately successful investors. Sometimes a little less, to tell the truth. But I am home on medical leave and today finally got to one of those jobs that's been waiting for a while, shredding. This required going through files and getting rid of quarterly reports for the last 15 years or so. AMAZING how far we have come when I had to look at those old statements!


Happy trails!



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Thanks for your responses. It is so exciting to participate here and get this all figured out with you who have already taken further steps down the teacher investment path.


I called my district and they have said that no transfers are being allowed at this time because the district is reworking things due to the new regs. My surrender fees are either 1% or 2% and will go to zero after year 6 (I think 1.5 years). In any case I'm stuck for now. My question is, if the value of my 403b falls below my contributed amount, should I wait until it comes back to at least break even before transferring it?


Thanks for the fund and book recommendations. I'm gonna take a look at those and see what's what. I'll probably do the Freedom Funds for convenience because I'd rather play my guitar than manage my funds : ) Still a .10 % expense ratio sure is tempting. I still have to find out which specific funds are allowed for my district. A fidelity rep told me on the phone that the district actually chooses a list of funds available for their specific 403b. Is this right? I've not seen anyone mention it on this site. Well in any case, he said if I open an application, I can then see the list of funds available, so I'm going to start there.


Thanks again everyone!



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