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nick777

Jailbreak $ from AXA to New Providers

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AXA's aggressive salespeople locked my wife in and she has some money in there now - about $6k. I want to change it to one of other providers available to her. Please let me know what the best choice is for lowest fees. Unfortunately, Fidelity was removed, and there's no Vanguard either, which would have been no-brainers. Is it Aspire? Also, if you guys know if we're going to get screwed by AXA on rollover fees, etc. that would be helpful. See the image for the providers.

As an aside, I also have a SEP-IRA ($25k) and a 457 ($105k) also locked into AXA, but my employer has them as their only choice with this 1985-era annuity that is absolutely savage on fees... 1.35% off the top for a "separate account fee" plus everything else. I've complained but my HR person has zero HR experience, my GM is unmotivated and nobody else knows anything. I transfer $ from my SEP-IRA to a Vanguard IRA annually via a rollover of the max amount I can that is fee-free, but beyond that, I feel helpless. As I'm maxxing out my 457 right now, I'm not even really sure I should be doing that or should I be using a different investment vehicle? FWIW, I gross about $98k and expect to retire in 17 years.

Responses to either of these issues would be much appreciated.
 

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51 minutes ago, nick777 said:

AXA's aggressive salespeople locked my wife in and she has some money in there now - about $6k. I want to change it to one of other providers available to her. Please let me know what the best choice is for lowest fees.

Your wife is an easy fix. AXA can't lock you in anything . Its not all that much money even with a surrendar charge which probably exists.  Get her out of it now.She can move that to Aspire immediately. Make sure you/she self directs the account into Vanguard Total Market Index and she can build it up from there.  Or you can do The NEA Direct Invest through Security Benefit. Direct Invest is  slightly cheaper. Plenty has been written about it here. You can do a search for more info.

For your other issues which I am not sure how to comment since I don't know the details of your accounts.  A SEP IRA can be transferred directly or rolled over into several other types of plans, including a Roth or traditional IRA, a 401(k) plan, or another SEP. I would do that directly to Vanguard.Not all custodians allow rollovers into their plans, so review the rules before starting a rolloverBut maybe you can all together just stop contributing to those plans and open  new accounts with better choices not associated with your employer??  I know you say its your only choice which is ridicoulus. Its one thing to feel locked in but if you keep contributing to it you are just making things worse. If those accounts have surrendar fees they do go away as time goes by so you can slowly move that money which seems thats what you are doing.

The indifference and ignorance you are experiencing is common and very sad. Plus AXA is a super aggressive entity that you must get away from one way or another. I hope I understood your post and helped in some way.

 

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4 minutes ago, tony said:

Your wife is an easy fix. AXA can't lock you in anything . Its not all that much money even with a surrendar charge which probably exists.  Get her out of it now.She can move that to Aspire immediately. Make sure you/she self directs the account into Vanguard Total Market Index and she can build it up from there.  Or you can do The NEA Direct Invest through Security Benefit. Direct Invest is  slightly cheaper. Plenty has been written about it here. You can do a search for more info.

For your other issues which I am not sure how to comment since I don't know the details of your accounts.  A SEP IRA can be transferred directly or rolled over into several other types of plans, including a Roth or traditional IRA, a 401(k) plan, or another SEP. I would do that directly to Vanguard.Not all custodians allow rollovers into their plans, so review the rules before starting a rolloverBut maybe you can all together just stop contributing to those plans and open  new accounts with better choices?  I know you say its your only choice which is ridicoulus. Its one thing to feel locked in but if you keep contributing to it you are just making things worse. If those accounts have surrendar fees they do go away as time goes by so you can slowly move that money which seems thats what you are doing.

The indifference and ignorance you are experiencing is common and very sad. Plus AXA is a super aggressive entity that you must get away from one way or another. I hope I understood your post and helped in some way.

 

Appreciate the help, Tony.

I can roll over 10% from the AXA SEP plus money that is over 6 years old, otherwise there are penalties... something like 9% was it? And all new money comes from my employer right into my SEP - they contribute 5% and that's where the boneheads want to put it.

For my 457, I choose whether to contribute or not, and right now, I'm putting in $18,500 per year. The other option is to not do that... but since I don't have another 457 option, I don't think I have another pre-tax option? I'll most likely be in a lower tax bracket after retirement, so a Roth will lose me money too. We're in union negotiations and supposedly I've gotten the union negotiators to agree to make the company shop around for new retirement plans, so we'll see - the union is new and these are initial negotiations. But there's no way I can transfer money out of the 457, is there? Or are there other options?

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I guess since they are contributing 5% to it makes it worth investing in it and might  negate the high fees drag. I would probably stick with it and keep rolling it over to Vanguard as you can. Things could be worse but that 5% helps.Having only one 457B option is stupid. You should definitely pursue change in this area.  Also If you have a 457 deferred compensation plan with a government employer, you are now eligible to roll over distributions tax free to a traditional IRA, as well as to a 401(k), 403(b), or 457 governmental plan that accepts rollovers. I am not sure this can be done otherwise.

You might post this question on Bogleheads.com. You will get a plethora of responses. If you do let us know what you find out.

 

 

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403b

  • Your best option is clearly Security Benefit's NEA Direct invest.
    • I documented that plan here.
    • I documented the steps I went through to enroll in OCPS (FL) here.
    • After 30 years of investing with 3% real returns, the fees will eat up 2.77% of your real profits.
  • Your second best option is Aspire.
    • I documented that plan here.
    • After 30 years of investing with 3% real returns, the fees will eat up 9.02% of your real profits.
  • Do you have access to a 403b?

IRA/HSA

  • Make sure you and your spouse are maxing out your IRAs.
  • If you have a high deductible qualified insurance plan, make sure you're both maxing out your HSAs.

457b

You gave us a lower bound on the expenses, but you didn't tell us exactly how much the 457b costs you. Obviously at a certain point the extra costs outweigh the tax benefit. This is a function of how long until you can roll it over to a low cost IRA, the current tax code, projections of future tax codes, and your income. Depending on those figures/assumptions, a taxable account may be preferable.

If it is in your best interest and you want to go out of your way to minimize the costs, you can back-load your contributions so you still get a full $18,500 into the account, but you don't pay fees on that amount until the very end of the year.

Does your wife has access to a 457b?

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