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KenJ

Another Participant's Poor Choices

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Yes I too have been thrown to the wolves. Lost my Fidelity choice and am forced to leave the 403b arena. Here are my new choices:

 

American Funds / Capital Bank & Trust

Ameriprise

AVIVA Life Insurance

AXA Equitable

First Clearing, LLC

Great American

Horace Mann

The Legend Group

Pacific Life Ins.

TD Waterhouse

VALIC

Western National

 

Anybody see anything here I can salvage???

 

Otherwise I will be putting money into Roth IRAs.

 

Thank you Congress for these new regulations!! Who did you help except for the scavengers at the insurance companies???

 

Ken J

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Ken

 

 

 

American funds aren't too bad except for the upfront load. BUT if you invest into their bond fund the load is much less than if you invest directly in their equity funds. So pump all money into the bond fund and quartely move your money into equities from the bond fund. This will save you a good portion of the load. Nice trick.

 

You can do this online.

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Tony,

 

Thanks for the info. I haven't yet seen what the fees are going to be for the TPA, or if the American Funds offered by the Capital Bank and Trust have any hidden fees as well.

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Tony,

 

Thanks for the info. I haven't yet seen what the fees are going to be for the TPA, or if the American Funds offered by the Capital Bank and Trust have any hidden fees as well.

 

 

Ken,

 

You might want to see what share classes are available for American if they have their r-4 or r-5 classes available these are very cheap versions of those funds.

 

If you have any questions I can try to help.

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Ken

American funds aren't too bad except for the upfront load. BUT if you invest into their bond fund the load is much less than if you invest directly in their equity funds. So pump all money into the bond fund and quartely move your money into equities from the bond fund. This will save you a good portion of the load. Nice trick.

 

You can do this online.

 

If the bond fund in question is Bond Fund of America, beware. It got clobbered last year, with a loss of > 12%, far underperforming the relevant benchmark.

 

American certainly has some excellent fund managers, but this kind of underperformance is worth noting.

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Yes I too have been thrown to the wolves. Lost my Fidelity choice and am forced to leave the 403b arena. Here are my new choices:

 

American Funds / Capital Bank & Trust

Ameriprise

AVIVA Life Insurance

AXA Equitable

First Clearing, LLC

Great American

Horace Mann

The Legend Group

Pacific Life Ins.

TD Waterhouse

VALIC

Western National

 

Anybody see anything here I can salvage???

 

Otherwise I will be putting money into Roth IRAs.

 

Thank you Congress for these new regulations!! Who did you help except for the scavengers at the insurance companies???

 

Ken J

 

 

Hi Ken,

Sorry for your loss of the mighty Fidelity and the 403b. Many educators have lost a true benefit because of a system called the tax deferred compensation plan which understandably has to be monitored by the IRS, but because of the new regs set in place, I am afraid that the original 1958 concept of the tax deferred feature as a potentially powerful encentive to retirement saving may be lost. Savvy educators like yourself will never sign in with an insurance or a loaded mutual fund company. Go with the Roth.

Steve

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Hi Ken,

Sorry for your loss of the mighty Fidelity and the 403b. Many educators have lost a true benefit because of a system called the tax deferred compensation plan which understandably has to be monitored by the IRS, but because of the new regs set in place, I am afraid that the original 1958 concept of the tax deferred feature as a potentially powerful encentive to retirement saving may be lost. Savvy educators like yourself will never sign in with an insurance or a loaded mutual fund company. Go with the Roth.

Steve

Minor correction: The original 1958 concept of the 403b did not permit the use of mutual funds. Not until 1974, with the insertion of 403(b)(7) did we receive the benefit of potentially lower cost mutual funds. However, the "potentially powerful incentive" still does exist - it just might take more work to make it happen.

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Vince,

I knew that it was all annuities and insurance companies at the beginning, but I wonder if the person who thought of this original brilliant idea ever saw that this powerful plan would be eaten up by fees in the years to come. Unless, the idea might have originated from the insurance industry so they could offer yet another expensive product to raise their profit levels. I wonder if the insurance industry really got what they imagined. We know the first rarely came to fruition but the second may not have either because of the severe competition among the insurance industry.

Steve

 

 

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