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Lightguy

Smith Barney 403b

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I am new to all this so I was wandering if any of you had any opinions about Smith Barney?? The company I am with goes through smith barney so I am looking at opening up a 403b through them. Any opinions would be greatly appriciated.

Thanks

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Smith Barney is part of Citigroup. They have few good funds, but not many. These funds are sold only by Smith Barney Brokers, Primerica, & Citistreet representatives. Both companies are owned by Citigroup. I would check to see what share classes are being offered. Look at whether you are buying an annuity or pure mutual funds. Check to see if there is a termination charge and look at all the fees. Make sure that your money is not restricted if you need it for an emergency. Make sure you understand how the product works and you are disclosed all the fees before you buy into the plan. Make sure that if you terminate employment, that you can rollover your money to another plan without penalty. Get it in writing!!! Make sure you compare all share classes before you invest. Get a prospectus and don't sign up for anything unless you understand fully what you are buying! By the way, Smith Barney is a sister company with Travelers Life & Annuity. Good Luck in your quest!

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Also, I was given some info about Travelers Life & Annuity. If Smith Barney is using Travelers Life & Annuity, then you should look at that topic in this forum. If Smith Barney is using an annuity, that broker needs to make money to stay in business with Smith Barney. You better really look at those fees as they will probably be pretty high. Based on what I have learned, there are lower fee based products out there that you could invest in! Good Luck!

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If there is no match in your employer plan, why don't you consider a no load investment away from your employer? If your employer allows multiple venders, talk with you HR Benefits manager about allowing you to invest in a no load 403b. Some districts require maybe 25 participants before they set up a new payroll slot. Talk with your co-workers. If there are enough of you, the district will most likely try to accomodate your request!

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My employer does offer a match plan, its not much though... What is a no load investment?? My employer offers these 3 venders: Smith Barney, Vanguard, and Primerica.... I dont work for a school, i work for a non profit, and there not very helpful. Im kinda stuck doing everything on my own so.... Do I want to stay away from annuities? I appriciate your help thank you

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No load funds are those that do not impose a sales charge on purchases. A $1000 investment in a no load fund goes entirely to the purchase of shares. By contrast, a loaded fund imposes a sales charge on purchases. A $1000 investment in a loaded fund with a 5% charge would mean that only $950 of that amount would go to the purchase of shares. The other $50 (or some portion thereof) typically goes to the agent who is advising you.

 

In case you are wondering, paying a load does not mean that you are investing in a superior fund! Quite often the opposite is true!

 

Vanguard is known as a premier company for low cost, no load index funds. Many people on this forum would be quite grateful for the chance to invest with Vanguard.

 

You might want to read the book, Bogle on Mutual Funds, by John Bogle. This would be a good start to learning about investing.

 

Good luck.

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Guest Sierra

Do I want to stay away from annuities?

================================================

YES!!

 

Use The Vanguard Group!!

 

Peace and hope,

Joel L. Frank

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Guest Joes

Lightguy meet w/ the rep and make your own decision Joel and his buddies are underwritten by Tiaa/Cref(an annuity company) vanguard and T. rowe price.

 

Also many annuities have better historical fund permance than there no load counterparts which means regardless of fees you made more.

 

 

Please remember cost is only a consideration in the absence of value. Since a no load provider adds no additional value or benefits you are left with only cost to compare. Many full service companies provide an on site representaives to work w/ you and your family on a varity of issues and help u to meet your goals.

 

Not to mention many annuities offer benefits such as principal guarantee( a guarantee that you do not lose money in a down market).

 

If you are older you probally want to look at a fixed annuity which are currently paying close to 5% per year guaranteed.

 

And BTW the fees on fixed annuities are zero.

 

joes

 

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Guest Sierra

Joes:

 

Only my buddies call me Joel. Do you want to be my buddy?

 

Joel L. (Peace and Hope) Frank

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Joes,

 

That is a remarkable post.

 

As a "buddy" of Joel, I eagerly await my compensation from being underwritten by the various no load companies.

 

No fees at all on fixed annuities? Wow.

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Hi Joes,

 

Thanks for your posts. A couple of questions about a post from this thread and a post from the "403(b)" thread ... Could you tell us how you were allocated during 9/11? What led you to this allocation? What university do you work for? How did you calculate that you will need to work at least 10 more years? Also, please pass along data that supports your statement that "many of them (variable annuity investors) even after fees did better than the Fidelity fund he (Joel) mention."

 

I don't think anyone who truly understands investing is against professional advice. In fact we have the following information on the 403(b) FAQ section:

 

Do I have to use an agent to set up a 403(b)?

No. This site believes that with financial education, patience and realistic expectations, individuals are perfectly capable of managing their own 403(b). It is important to point out, however, that many agents provide valuable services to their clients. These services can include: retirement planning, information about state retirement plans, and analysis of other financial needs. Such agents rightly deserve to be compensated for their services. The key is to figure out exactly what services you are receiving, and exactly what fees you are paying for these services. Only then can you determine the true value of using an agent. Other options include hiring a financial planner who can be paid on an hourly basis to aid you with your 403(b).

 

What is your opinion of an investor using low cost investments upon the advice of a fee-only financial planner?

 

You make a good point about annuitization. It can make a lot of sense to annuitize a portion of retirement savings. But why lock into such a scenario during the accumulation phase? Any investor can always choose this option upon retirement when they have a better idea of their retirement lifestyle and financial needs.

 

I would be interested to hear your opinion on the following books: The Four Pillars of Investing by William Bernstein, Common Sense on Mutual Funds by John C. Bogle, and A Random Walk Down Wallstreet by Burton G. Malkiel. These well-respected books make a very strong case for the low-cost index approach to investing. If you have data to refute this books we would be very interested in seeing it.

 

Dan Otter

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My employer does offer a match plan, its not much though... What is a no load investment?? My employer offers these 3 venders: Smith Barney, Vanguard, and Primerica.... I dont work for a school, i work for a non profit, and there not very helpful. Im kinda stuck doing everything on my own so.... Do I want to stay away from annuities? I appriciate your help thank you

 

Lightguy, whether Smith Barney is worth the extra money or not depends entirely on whether the Smith Barney rep is earning his pay in educating you and offering you guidance. Since you describe yourself as "stuck doing it on your own," it's a safe guess that you're a good candidate for some kind of professional assistance. It would be worth your time to talk to the reps from both Smith Barney and Primerica to see whether they fit the bill for you. The "Vanguard rep," as such, doesn't exist, but they do charge a lot less. Which one is the best fit for you is up to you, though. There's no reason for you to "stay away from annuities" as a blanket rule, but you do have to educate yourself as to the difference between an annuity and a mutual fund and decide whether you want/need one or the other.

 

Someone mentioned the John Bogle book as a source of information. It's a good read, but since Bogle is the founder of Vanguard, I think I can spare you the suspense as to which of the three companies HE would recommend...

 

 

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Lightguy,

 

You may also want to consider using a Vanguard Target Date fund (0.23% in total fees). The Target Date Approach is an extremely affordable way to ensure asset allocation at every stage of your investing life.

 

Another option is to work with a fee-only financial planner. Check out the a Certified Financial Planner site for info on finding a CFP in your area.

 

Good luck. Unlike many you have a lot of options: annuity/brokerage with a rep approach, on your own with a very low fee company, or combining the low fee company with a CFP.

 

Dan Otter

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Guest Sierra

There's no reason for you to "stay away from annuities" as a blanket rule, but you do have to educate yourself as to the difference between an annuity and a mutual fund and decide whether you want/need one or the other.

==============================================

Except for TIAA-CREF, with its 0.03 percent charge for Mortality and Expense, under no circumstances should one use an annuity for pre-tax investing.

 

The Mortality and Expense charge is about 1.25 percent. Let's see what you get for this fee.

 

1. Guaranteed return of premium death benefit.

2. Guaranteed annuity income rates.

 

First comment: A guaranteed return of premimum death benefit (GRPDB) is only an issue with a variable annuity---not a fixed. Per $1000 it is very expensive. Pure term coverage would be much more economical. The GRPDB only pays the difference between the account's value and the premiums paid in. Proper investment diversification addresses this problem. IS THE MORTALITY AND EXPENSE CHARGE REDUCED FOR THOSE THAT INVEST IN THE FIXED ANNUITY? OF COURSE NOT! Once your account value is safely ahead of your cost basis is the Mortality and Expense charge reduced? Of course not!

 

Second Comment: Why stunt the growth rate of your investment by the Mortality and Expense charge in order to lock in guaranteed annuity income rates? Annuitization is just one of several distribution options and this decision does not have to be decided upon until April 1 of the year following one's 70.5 birthday.

 

The Mortality and Expense charge is simply a gift to your friendly rep and the insurance company he works for.

 

Peace and hope,

Joel L. Frank

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