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lear45drvr

Texas 403b Question.

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Hello everyone,

My wife is a teacher in Texas, and I am trying to help her to get started in her 403b. My problem is I know NOTHING about them- although I have been learning. The other day, she signed up with a company called Great America Financial. The way the gentleman talked it sounded like she had signed up for a bond fund. Today in the mail, we got a letter stating that she had signed up for a variable annunity. Right now her School district already has a sperate account ( something for senoirity) - that is in ING. My problem is:

One fold! HELP! I know that from what I have read these var. annunities are not what she needs. A brief background. 37 years old- and NO retirement except for 2,500 in the ING fund.

Suggestions on what I should do to help her get the ball rolling?

Thanks

 

 

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I can hardly wait to see what Joel has to say about this one.

 

Let me take a stab...

 

"Stop contributions to those thieves at Great America. They're too expensive! And ING? ING??? They are the Great Satan!!! Call the District Attorney and inform them of this grievous situation!!!"

 

Hmmm...maybe not enough capital letters. LOL.

 

Seriously, though, it sucks that your wife signed up for something without being made to know that it was a variable annuity. Based solely on that, I'd stop contributions and examine your alternatives. VA's aren't necessarily the worst thing in the world, but she is officially dealing with someone she can't trust now, and there's NO reason to do that.

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May not be as bad as you think if you are willing to do a little work.

 

1. Read the contract your wife signed. If possible, stop contributions.

 

1a. Go to the Texas Teacher Retirement web site: www.trs.state.tx.us; at this site, click on the link: 403 certification.

 

2. Go to the list of certified companies. You will find many annuity companies that will receive loud boos from this forum. You will also find Fidelity, Vanguard, and T. Rowe Price among other mutual fund companies.

 

3. Click on the links to the various companies and study the products they offer. Understand that the annuity firms come to the campus, no load mutual funds do not; you have to initiate the process with these firms.

 

3a. BOTH of you need to read (several good books are sold at the 403b wise web site) and discuss your futures. MAKE A PLAN. Both of you have to be involved in this process; we're talking about building quite a retirement fund here. Should you pass first, your wife needs to be comfortable in handling a portfolio well in excess of 500K.

 

4. Go to the department in her school district that handles 403 participation and ask how you can sign up for Vanguard's TRS certified 403 plan (Vanguard is used as an example, be name specific when you ask).

 

Good luck and be persistent. You two have time on your side (love that compounding); my wife and I started much, much later than you guys and we will retire in 2006 with a portfolio in excess of 500 K.

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Most states have a free look provision, 10 to 20 days. The "Free Look" starts when she received the policy. If she is still in her free look, call company and advise that you are exercising the "Free Look" provision. Send it back to the company by US Mail with Return Receipt. Call the payroll office and stop contribuitions immediately. The company should refund the money back through the payroll office since it was pretax. Payroll should then pay your wife. That is how it works in my wife's district, because we just went through it. Good Luck!

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