403b Inquiry

[Billy Ribs 0]

Good Evening,

I am a teacher in New York and my school district has 12 options for the 403b.  I am currently working with AMERIPRISE but wondering if there might be a better option.  Additionally, I am 30 years old, so just starting my investment career.  Any information is greatly appreciated.  

Here are the 403b options available to me...

Aspire, Ameriprise, AXA, Faculty, Foresters, MetLife, MetLife FC, Oppenheimer, RiverSource, The Legend, VALIC, Voya

Thanks

Billy

[EdLaFave 0]

Aspire is likely the best 403b you listed (unless your district somehow negotiated a special plan with the other  vendors). I documented their plan here. It is one tier below the best plans out there (Vanguard, Fidelity, etc.), but still very much worth using.

What are your 457b options? New York has a great state sponsored 457b that you can learn about by searching the form. It is better than Aspire.

I also wrote an Investing 101 page here if you want to read up on the basics. 

[tony 0]

3 hours ago, Billy Ribs said:

I am currently working with AMERIPRISE

Oh what horrible memories I have with Ameriprise. They are horrible based on my experiences.  Do yourself a favor and jump over to Aspire, self direct the account into Vanguard or Fidelity Index funds and don't look back.  If you have an annuity than you probably have a surrender charge . Pay it and move on with your transfer.

Call Aspire , they will help you self direct/transfer  the account into the funds of your choice. Don't be roped in to using an advisor because it will cost you more than the advice is worth. A 3 fund index portfolio or Vanguard  target fund would be a good option .

[krow36 0]

Welcome to the forum, Billy!  I agree with Ed and Tony! Aspire is an excellent vendor for you and a good place to move your Ameriprise 403b balance. The NY state 457 plan is very low-cost (lower than Aspire) and a good place to put your further contributions. 

[Billy Ribs 0]

Really appreciate the responses!  Where would I reach out to in order to establish a 457 plan? Additionally, should I continue to contribute to both my 403b with Aspire (once I have it established) and the 457 plan or just the 457 plan?  

Thanks! 

[EdLaFave 0]

Your school district has essentially the same process in place for enrolling in a 457b as they do for a 403b. You'll have to setup an account with the vendor (403b and/or 457b) and you'll have to sign a salary reduction agreement so your employer can direct money from each paycheck to your account (403b and/or 457b).

As a general rule of thumb you should prioritize maxing out the tax advantaged accounts (IRA, 403b, 457b, HSA, etc.) that have the lowest fees and then you should contribute any excess money to a taxable account. Based on what I know about your situation this should be your priority:

1. Max out IRA.
2. Max out NYS 457b.
3. Max out Aspire 403b.
4. Invest the left in a taxable account.

Most people don't have enough invest-able income to do all 4, but those are the general priorities.

[Bashdash 0]

Go to omni403b.com and put your district in.  Check to see if they are the administrator of your 403b and 457.

 

The NY 457 is the best plan yet it is like a little secret that I doubt any of your colleagues even know exist.  Super easy to set up too.  

[krow36 0]

Your district should have a list of 457 vendors that you can use. Check and see if the NY state 457 plan is on the list. If it is, check the internet for the application form. If it is not on the district's list, it should be. Try calling the state plan and ask them to help getting the plan set up for your district.   https://www.nysdcp.com/iApp/tcm/nysdcp/support/index.jsp

I would establish the Aspire 403b plan and then transfer your Ameriprise balance to it. In the meantime, I would establish the NY state 457 plan, contribute, and max it if possible. Then if you can, go ahead and contribute to the 403b plan. 

[Billy Ribs 0]

3 hours ago, Billy Ribs said:

I just called OMNI and my district does not provide a 457b.  I would love to advocate for our teachers in order to get this plan.  

 

[Billy Ribs 0]

Any suggestions to how to go about this?  

[Bashdash 0]

I would start by simply emailing personnel.  Might be easier than you think?   

[EdLaFave 0]

If your district doesn't offer any 457b plans then this is going to be more difficult than adding a specific 457b vendor to an existing line up.

I'd start by contacting your Retirement Services department (or whatever the equivalent is for your district) and asking them if they'll add it. Ask them what the process is for adding a 457b and who the decision makers are. Then talk to those decision makers and if necessary talk to their bosses and if necessary talk to the school board.

I want to encourage you to add the 457b because it is great to have that available. However, if can't max out a 403b then your time may be better spent getting them to add Vanguard and/or Fidelity to the existing 403b lineup. You'll have to talk to the same people and maybe you could push both agendas at the same time.

...I speak from the experience of getting OCPS (FL) to add Vanguard and Fidelity to their 403b/457b vendor list. You can do it too and I'll answer any questions along the way.

[Billy Ribs 0]

Thanks everyone!  I am going to start reaching out first thing next week!  Will reach out with questions I am sure. 

Appreciate you all taking the time out to help me, this is great! 

[tony 0]

I successfully added a 457b plan to my district at time no-one even knew it existed for school systems in my particular state. You need to first contact your state 457b plan administrators and talk to a 457b retirement specialist. One you have them on the phone( don't e-mail) ask them how to proceed  to get it established in your school system. They will give you the play by play and will often contact the school system in your behalf. After that you might be advised to get a list together of 20 fellow teachers who want to establish and contribute to it. That should seal the deal.

However when I added it ,our 403b TPA did everything it could to not make it happen I guess because it was viewed as competition . They failed to stop its addition and those teacher  signatures plus my  school board presentation by powerpoint sealed the deal. I had a very supportive personnel director at the time whose clout (and finance degree) helped make it happen.He actually understood personal finance!! Once you can convince the powers that be, its just a matter of the district filling out simple paperwork.

If you can't get it to happen, don't fret too much, Aspire is a good enough option if you self-direct the account. It's not a perfect choice but much better than anything else you have plus it can link you with Vanguard and Fidelity . I do think getting Vanguard added directly would be ideal. Same with Fidelity, but only with their index funds. Stay clear of their  (Fidelity's) managed funds because they are much more expensive. Vanguard's funds  overall are cheaper across the board than Fidelity 's except for Fidelity's index funds which are  the cheaper exception.

I hope my additions to this discussion is helpful. Everyone's comments have been right on.Please come back often to keep us abreast of  how things are progressing. Your playbook may help others do the same.

 

[Bashdash 0]

Great responses.  Find it very ironic to get help for this you have to go to anonymous strangers on the internet!  Thanks Krow for helping many years ago save me thousands in fees!