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Question about 403b options (AXA)

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I currently have a 403b plan with AXA EQUI-VEST® - 403(b) and AXA Retirement 360. I have about $61,000 in the Equi-vest account and about $12,000 in the Retirement 360 account. Over the last 10 years, I've contributed to the account on and off, but I've completely stopped contributing in October of 2018. If it matters, I'm 32, so retirement isn't exactly around the corner for me. 

Since I've stopped contributing, I've been maxing out my Roth IRA and have been investing in low-fee index funds through my vanguard account. I'm wondering two things: 1) Aside from the Roth IRA and index funds investments, should I be contributing to a 403b using a less terrible option than AXA? 2) What should I do with the money that I currently have in my AXA account? (I've asked the representative for my account and he's given me the round around about surrender fees.) 

Unfortunately, my district has discontinued many of the 403b options that have lower fees, and we are left with three options: AIG Retirement Services/Valic (19 bps), AXA (31 bps), Lincoln (25 bps). The district has also started offering 457b plans, but I've never had one. 

Any advice is appreciated! 

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chr555, welcome to the forum! I'm guessing that your district has worked out a 4 vendor arrangement with them and that the 4 plans are not the national plans offered throughout the US? Are the basis points you provided for the 3 vendors their administration fees? Is the district's admin fee for the AXA Retirement 360 plan 0.31%? And does it offer Vanguard Index funds?  

In order to help you figure out your best 403b option, we need to see the individual funds and their expense ratios, as well as the fees each vendor charges for their plan. Can you provide a links to the 3 vendors' websites for your district?

In general, for retirement savings, you are better off contributing to a 403b and/or a 457 plan than to a taxable Individual or Joint account. The idea is to postpone paying income tax on those contributions until you are in retirement and in a lower income tax bracket. If you think a pension and other income will give you a higher tax bracket in retirement than currently, then contributing now to a Roth 403b and/or 457 is preferable to using a taxable account. 

If we can help you discover a 403b or 457 plan with reasonable fees, say well under 1.0%, you can transfer your AXA balances to it. 

Can you also post the 457 vendors? What state are you in? Many states have a state-run low-cost 457 plan that school district employees can use.


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Krow36, thanks so much for the insights. 

Here's a link to my district's 403b/457b page: https://www.philasd.org/benefits/home/403-b-457b-savings-plans/

Here's a link to the individual funds along with expense ratios offered through Valic: https://my.valic.com/ARO/FundPerformance/FundPerformanceFluent.aspx?q=H1W7wtchY+37B09bn5trVN7PvnzW1h/JbP0mix4IieNrHowwlTijjnHbcAz5dgzZA0z6Ci+qbkb5CsBtEve7mQ==

I can't seem to find a list of the funds along with expense ratios in a handy sheet for AXA and Lincoln. I'll update once I do. 

Our 457b providers are the same as our 403b providers. I'm in PA. PA seems to have a state-run option, but it isn't listed on our 457b enrollment form. http://sers.pa.gov/pdf/Deferred_Compensation/DCP-Fee-Comparison.pdf

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OK, I can’t find the information on the funds in the AXA and Lincoln plans either. What we’re looking for is low-cost, broad-based index funds. Your link for VALIC was great. VALIC’s annual fee of 19 basis points (0.19%) is not excessive and combined with the Vanguard index funds, would give you a very good, low-cost 403b account. If you want to be diversified and invest in international fund, I suggest you use your Roth IRA or your taxable account and pick a Vanguard Total International Stock Index fund. The 2 American Funds’ international stock funds that VALIC offers have ERs that are too high. Not everyone thinks it’s necessary to invest in international mutual funds due to US companies having much of their business overseas.

VALIC annual fee of 0.19%

Vanguard 500 Index Admiral VFIAX, ER 0.04%

Vanguard Small Cap Index Admiral VSMAX , ER 0.05%

Vanguard Total Bond Market Index Admiral VBTLX, ER 0.05%


So your overall cost would be about 0.23%, which is great!


AXA annual fee of 0.31%

AXA Retirement 360 in offered in CA and it includes some very low-cost index funds:

iShares Total US Stock Market Idx Km, BKTSX, ER 0.03%

Vanguard Developed Markets Index Admiral, VTMGX, ER 0.07%

Vanguard Total Bond Market Index Adm, VBTLX, ER 0.05%


If these funds are offered in your district’s AXA 403b, your total fee would be about 0.34% (maybe 50% or more would be in BKTSX depending on your asset allocation?). I think this is certainly a reasonably low-cost 403b and also worth using.

I think it’s likely that the Lincoln 403b plan with a fee of 0.25%, can be used to Vanguard index funds, and is also a very good plan.

I would not make further contributions to your AXA variable annuity. Can you find out the expense ratios of the sub accounts you are using in your annuity? Is there a mortality and expense (M&E) fee and if so, how much is it? The total of the annual fees will determine whether you should wait out the surrender period, or pay the surrender fee.    

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