Jump to content
Isabella

New Teacher, 403(b) Issues

Recommended Posts

Hi everyone.

 

I'm 28, a first year teacher in NY, and I opened my 403(b) this past September.

 

During my first week on the job, a representative from AXA walked up to me in the faculty room (literally) and asked me if I wanted to set up an appointment with him open my 403(b). Since I obviously want to do the right thing and save for retirement, I excitedly made an appointment.

 

At our meeting he asked me a few questions, had me sign some papers, and my 403(b) was up and running. I was excited and felt pretty good about myself that I was saving for my retirement. I decided to invest 10% of my salary into my 403(b).

 

Since then, I started doing some research about my retirement plan (I know, I know….I should have done that before) and I'm NOT happy with what I've learned.

 

I was never informed about all of the fees I am being charged. Even on my monthly statements, there are no fees listed. From what I've read, I'm GUESSING that it's around 2.5%???? (More/less?) I used a 403(b) calculator that I found online, and I have seen the difference a percent or two in fees can affect your retirement savings!

 

I am going to get my districts' vendor list on Monday to find out what my other options are. In the meantime, I'm calling my AXA representative because I want to stop funding my account immediately. I'm happy I only have about $2,500 saved so far......but what kind of fees can i expect to pay? Will there be a larger penalty because the account hasn't been open for a year yet?

 

Also, I also opened up a Roth IRA this past September with T. Rowe Price. Right now I am putting much more money into my 403(b) and a smaller amount into my Roth. Should I make my Roth my first priority? I'm so confused!

 

Any advice about this situation and where I should go from here?

 

I'm so thankful to have found this website. Any other advice anyone is willing to throw my way would be greatly appreciated!

Share this post


Link to post
Share on other sites

 

 

Isabella,

 

I know how hard it is to sift through all the noise and figure out what the right approach is when it comes to planning for retirement. IT seems the only people out there giving advice are agents trying to sell you products to make a commission. Would you trust someone whose interests are directly opposite of yours?

 

The fact the the fees were not mentioned bothers me greatly.

 

 

I think you have done some good things and have also made some bad moves. Haven't we all!

 

I would go with reputable companies in your 403B like TRowePrice, Vanguard,Fidelity, and TIAA Creff, maybe American funds-A shares only. If you only have insurance companies to chose from I would max out your Roth IRA first.

 

The insurance companies charge way too much for what you can get dealing directly through the companies

mentioned above. It may not seem like much but over time those fees can eat up your returns. Plus they have hefty surrendar fees which the mutual fund companies do not have.

 

My returns have been better now that I'm out of annuities. You don't have much in AXA. You could transfer it

possibly to another choice in your districts 403b plan. Just don't jump from insurance company to insurance company becuase they are pretty much the same in terms of fees and underperformance.

 

Even if the salesrep selling annuities is a knowledgable and charming chap you still are at a disavantage dealing with him/her because of the fees. Having said that a good portion of the agents I have run into

don't know all that much. They just may know a little more than you do. They just want that commission.

You will be lucky if you see him much after you sign those papers.

 

 

EDUCATE YOURSELF !! If you know something you are less likely to be taken advantage of.

 

Tony

 

 

 

Share this post


Link to post
Share on other sites

Thanks Tony.

 

I just found out that my district offers Vanguard as one of their providers! =)

 

Does anyone know how I stop contributing to my AXA 403(b)? Do I call my AXA rep and do it though him? Or do I go to the payroll person in my district?

 

 

 

 

Share this post


Link to post
Share on other sites

Thanks Tony.

 

I just found out that my district offers Vanguard as one of their providers! =)

 

Does anyone know how I stop contributing to my AXA 403(b)? Do I call my AXA rep and do it though him? Or do I go to the payroll person in my district?

 

Isabella,

 

Don't feel bad because you have made mistakes. Virtually everybody on this forum has made them, and many of us made them when we were far older than you!

 

You can simply contact your payroll office to stop your contributions to AXA, and at the same time start them with Vanguard (an excellent choice, I might add). You can probably do this by filling out a single salary reduction agreement (SRA) form.

Share this post


Link to post
Share on other sites

 

 

Isabella,

 

One other thing. Don't let the AXA rep give you the sob story routine on how you are making a big mistake.

Declare your independance!!! and move on to Vanguard. You are not in any way, shape, or form making a mistake by going with the low fee champion Vanguard.

 

You can always count on us for guidance if you need it.

 

 

Tony

Share this post


Link to post
Share on other sites

Isabella,

 

I am no expert. If you have the discipline to max out your roth I would do that first and then fund you 403b. Definitely switch your 403 b to vanguard. the reason I like the roth is tax free withdrawl in distribution phase and ability to take out principal if needed. Just my opinion some might disagree.

 

Rich

Share this post


Link to post
Share on other sites

Isabella,

 

Speak with the Axa rep and ask the questions you've posted here. Make sure you get an honest answer.

You can simply call Axa and ask what their procedure would be to cancel further contribution.

Like everything in life, some need more help than others.

If you find that you need a little hand holding and guidance is what you want, speak with a rep that is not tied to a company selling only their products.

 

Not knowing your full financial conditions, I would not be able to tell you what to do with your money but here are some questions that the Axa rep should have asked...

 

-Are you married/any children

-If children-How old-

-Do you have life insurance-What is the amount?

-What is your income?

-What is your debt/credit card/student loans..etc....

-How much do you have funds that are liquid

 

Hope that helps.

 

 

 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

×
×
  • Create New...