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Skelly

Vista (CA) Unified 403(b)

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Hello,

My wife is a teacher for Vista Unified in the San Diego, CA area, and we have been looking into starting a 403(b) for her.  We have been told by our Plan Admin (SchoolsFirst) that if we want to do a Roth 403(b), we need to use Empower.  According to 403(b) Compare, the Admin Fee is .16%, and they offer both Fidelity and Vanguard funds.  Does anyone have experience with Empower? We are afraid that we are missing some costs.  Their fee seems to compare favorably with CalSRTS Pension2, which is .25% (of course, we would have to go traditional to use CalSRTS.)

Thanks!  
 

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Skelly, welcome to the forum. I'm glad to see that you are making use of 403bcompare, a great resource! I don’t think you are missing any of Empower’s fees. It’s the administrator and record keeper for the San Diego Consortium and charges 0.16% as you mention. It’s unfortunate that there’s no low-cost index bond fund. The Fidelity 500 Index, Small cap Index and International Stock Index are very good funds. Can you put your bond funds in another account? If your TPA didn’t restrict your Roth 403b choice to Empower, Fidelity would be my first choice—lower cost and better selection. And they support a Roth 403b option. Are you sure you want Roth rather than traditional 403b contributions?

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krow36,

Thank you for your response, I appreciate it!  We are considering going Roth to offset our taxable income in retirement from my traditional 401k.  I do like Fidelity better, however.

    

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OK, it sounds like you've done the math. Pensions + social security + large deferred-contribution accounts can add up to a high tax bracket in retirement after age 72.

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I'm sure Skelly has done the math for their situation.  As a reminder to others though, if you retire in your late 50's-60ish you could still have over a decade before starting Social Security benefits.  This is a great time to spend down an inflated deferred 401k/403b plan and do Roth IRA conversions while you are in a lower tax bracket.

 

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Another reminder to people concerned about having "too much" taxable income in retirement...

That is likely a very good indicator that you worked much longer than you needed to! Retiring early is always something to consider.

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