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Avoid Withdrawal Fee (9%) From Metlife Financial Freedom Select - Clas

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Oy, I've got to get my wife out of MFFS (Metlife Financial Freedom Select - Class B). $30 annual fee, high fund fees, craptastic schmuck who signed my wife up for it is deceptive at best, ignorant and dishonest at worst. So ...

Is there any way to avoid paying the withdrawal fee when transferring her 403(b) to another vendor (i.e., Fidelity or T Rowe Price)?

 

My wife only has $2400 in the account, so the withdrawal fee would be about $216, but hey, that's $216 we'd like to keep! If I cannot avoid this fee, I'd like to transfer the account ASAP as this is likely the least the account will ever have in it (i.e., more money going in each month and the market must be at or near the bottom). But if there's any way to avoid paying the fee altogether, I'd love to hear your thoughts!

 

She was signed up for the account by a bad account manager: bad allocation of funds, inappropriate plan for my wife (10% in 10 different funds each with high expense ratios and management fees, apparently randomly selected as they are not even based on the various "conservative" to "moderate" to "aggressive" allocations suggested in the MFFS prospectus), plus a $30/year fee from Metlife ... just outrageous. He sold her (and others) on his account by claiming that all the other teachers at the school had signed up with him (we've since learned this was fabricated completely).

 

Help my wife get out ... then we can help the other teachers get out too (if they can)! If there is a way to help others, I'll be working with the teachers' union to provide education and presentations on how to get into more reasonable plans without subjecting them to management or withdrawal fees.

 

Withdrawal fees according to the prospectus:

 

B Class: 12-year withdrawal charge schedule: 9%, 9%, 9%, 9%, 8%, 7%, 6%, 5%, 4%, 3%, 2%, 1%, 0%

 

L Class: 7-year withdrawal charge schedule: 9%, 8%, 7%, 6%, 5%, 4%, 2%, 0%

 

C Class: No withdrawal charges apply

 

Beyond that, there is the $30/year management fee and additional account fees of:

 

B Class: 1.15% L Class: 1.30% C Class: 1.45%

Thanks a million, for this and for the whole forum!

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Oy, I've got to get my wife out of MFFS (Metlife Financial Freedom Select - Class B). $30 annual fee, high fund fees, craptastic schmuck who signed my wife up for it is deceptive at best, ignorant and dishonest at worst. So ...

Is there any way to avoid paying the withdrawal fee when transferring her 403(b) to another vendor (i.e., Fidelity or T Rowe Price)?

 

My wife only has $2400 in the account, so the withdrawal fee would be about $216, but hey, that's $216 we'd like to keep! If I cannot avoid this fee, I'd like to transfer the account ASAP as this is likely the least the account will ever have in it (i.e., more money going in each month and the market must be at or near the bottom). But if there's any way to avoid paying the fee altogether, I'd love to hear your thoughts!

 

She was signed up for the account by a bad account manager: bad allocation of funds, inappropriate plan for my wife (10% in 10 different funds each with high expense ratios and management fees, apparently randomly selected as they are not even based on the various "conservative" to "moderate" to "aggressive" allocations suggested in the MFFS prospectus), plus a $30/year fee from Metlife ... just outrageous. He sold her (and others) on his account by claiming that all the other teachers at the school had signed up with him (we've since learned this was fabricated completely).

 

Help my wife get out ... then we can help the other teachers get out too (if they can)! If there is a way to help others, I'll be working with the teachers' union to provide education and presentations on how to get into more reasonable plans without subjecting them to management or withdrawal fees.

 

Withdrawal fees according to the prospectus:

 

B Class: 12-year withdrawal charge schedule: 9%, 9%, 9%, 9%, 8%, 7%, 6%, 5%, 4%, 3%, 2%, 1%, 0%

 

L Class: 7-year withdrawal charge schedule: 9%, 8%, 7%, 6%, 5%, 4%, 2%, 0%

 

C Class: No withdrawal charges apply

 

Beyond that, there is the $30/year management fee and additional account fees of:

 

B Class: 1.15% L Class: 1.30% C Class: 1.45%

Thanks a million, for this and for the whole forum!

Do you want the bad news, or no news first? You can always stop contributing to the plan, and look for a better investment. I assume you're outside of the "free look" period, since you've accumulated a good amount in there already

 

I believe this plan does have benefit sensitivity, but it doesn't sound like your wife is retiring anytime soon, so that probably won't help you much. Since you feel you were poorly allocated, you can also reallocate your funds (most likely online, or calling the company directly will be your best option.)

 

If you want to make the argument that you were sold this account fraudulently, you can always try - but probably won't get far. Most salespeople are pretty good about documenting everything in the fine print, so that you can't say you haven't seen these terms before.

 

 

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Withdrawal fees according to the prospectus:

 

B Class: 12-year withdrawal charge schedule: 9%, 9%, 9%, 9%, 8%, 7%, 6%, 5%, 4%, 3%, 2%, 1%, 0%

 

L Class: 7-year withdrawal charge schedule: 9%, 8%, 7%, 6%, 5%, 4%, 2%, 0%

 

C Class: No withdrawal charges apply

 

Beyond that, there is the $30/year management fee and additional account fees of:

 

B Class: 1.15% L Class: 1.30% C Class: 1.45%

Thanks a million, for this and for the whole forum!

 

 

Let's not forget the regular fund management fees, either. It's doubtful one could get in for under 2% in fees with this dog.

 

Gotta love those 12 year surrender fees.

 

I'm amazed at the creativity of these companies.

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Chances of getting out of the withdrawal fees because she got bad advice = nil.

And not worth the hassle for that amount of money, IMO.

 

Long Term Thinking: Selling now, in a down market, will likely result in the smallest penalty. If the market recovers nicely, she could end up paying twice as much in 4 years. Adding Insult to Injury!

 

And she will have paid about 2.5% annually for the privilege, enough to be about the equivalent of the (current) 9% fee all over again!

 

If she could make the jump now and let the balance grow in a low fee account, she will probably be better off in the long run.

That is what I decided when I jumped ship from AIG VALIC to Vanguard a couple of years ago.

 

Disclaimer: I am not a financial advisor, that is just my personal opinion.

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Meh, pretty lame but it seems like you're right - no easy way out. I'll look into the 10% removal/year possibility.

 

I may also try to move it into another metlife product that has an easier way out ... maybe by enticing the account manager/schmuck with something that gives him a bigger kickback but with easier escape terms for my wife =).

 

She has $2400 in the account now, so her options are:

(1) Move the funds into another account and lose 9%, or $216

(2) Move out 10% each year for 10 for 6-8 more years (when the withdrawal penalty is 0-2%) and lose $30/year plus the fee at removal ... a total of at least $30x6 ($180) + 2% ($48) = $224 ... it would more if she removes it after 8 years, an additional $60 fees.

 

If the market improves (an assumption I'm willing to make) then things would not improve as she'd be losing more in fees each year (she'd be losing more to the higher fees basically).

 

Awesome ... looks like I'll have to be getting it out of this lame account sooner rather than later ... maybe I can have her take out 10% penalty free then make the total shift to a new plan. Maybe.

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