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NJ Teacher 403b Options

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Hello,

1st, thank you for hosting this great forum.  I’m a first time poster, so please forgive me if I break any rules.

Background:  My wife is a teacher in a NJ school district.  Currently she is with Equitable and has a mix of variable annuities within her account.  I’m rapidly coming up to speed on the ins and outs of these instruments and believe that she is paying extensive expense fees for these investments (>2%).

My real question is, what should we do?  Her district has 3 options, Equitable, Lincoln Investments, and Valic.  Valic looks to be AIG.  I’ve seen some talk here about a self directed plan from Lincoln.  Is that available to all NJ teachers?  Is that the best choice?

Thanks again for all of your help.

 

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Nj 403beware   Welcome

1 hour ago, nj403beware said:

she is with Equitable and has a mix of variable annuities within her account.  I’m rapidly coming up to speed on the ins and outs of these instruments and believe that she is paying extensive expense fees for these investments (>2%).

She should get out of Equitable. I believe New Jersey  teachers have access to a decent 457b plan but not 100% sure. Do you know if her district has any 457b plan listed as an option? That might be a better way to go.  I think both Lincoln investments self directed account and non insurance/non annuity Valic products might be a better choice if those  particular Valic /Lincoln options are  available to her .   You might be able to get to Vanguard indirectly through Lincoln Self-direct. You would have to transfer your assets out  of Equitable into one of the other 403b choices.A rollover from a 403(b) plan into a 457b is only permitted if the sponsor of the 457(b) plan is a government employer. Rollovers are not permitted from a 403b plan to a 457(b) plan of a non profit employer while employed.  If you can go self-direct with Lincoln you will probably not want to use an advisor. You/she would have to be comfortable managing the account on your/her own.

Krow should be here soon with the  specific details. He is a guru in these cost matters and can advise you better than anyone so be sure to come back. He will fix my  misstatements if I made any.

Your options are limited in your 403b it seems. Do you think you could approach/ work  with your district  to add a few better options like maybe Aspire?

Tony

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Just seconding Tony's comments:  

1. You should immediately ask her district (maybe a payroll, HR or benefits office) whether there are 457b options available to your wife.  There's a chance that will offer a superior choice to any of the 403b providers you mention. Please tell us what you learn. 

2. As you've gathered, variable annuities are among the awful investment products foisted on teachers. But getting money out of there may be a complicated decision because of "surrender" fees, which you'll need to learn about. The good news is that you don't need to move those funds before opening a better account and investing "new money" there.  I'd make it your priority to identify the best available option and begin sending future deductions there;  deal with the Equitable investments later.

3.Krow will indeed be very helpful to you on all of this.

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nj403bware, welcome to the forum! Tony is right on about being able to use Lincoln Investment's Participant Directed Platform. It's always allowed by Lincoln Investment in NJ districts if LI is on the vendor list. The admin fee is $60/yr and the funds are Vanguard's, very low expense ratios. It's not only a 403b plan, it includes a 457b plan for the same $60/yr! I would stop AXA contributions immediately and get the LI PDP going. Transferring the AXA balance usually takes a month or more and can start after the PDP is set up. You have to transfer the AXA 403b into the 403b PDP, not into the 457b PDP. 

LI tries to keep the PDP secret and provides no information about it on the internet. The only information we have is from posters that have gotten permission to use it, and from an out-of-date application form which we have a copy of. I'll see if I can post it here. That wasn't possible in the past but the website has been upgraded I thin. To get permission, you have to call a regional LI office. They will email you the ability to download the application form pdf. 

If you write out LI PDP in this site's search feature, you'll see several threads on the subject. 

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zkrw

1 hour ago, krow36 said:

I still can't post the pdf here.

It's definitely hit or miss.  I'm just glad I figured out the difference between the two Lincolns. Lincoln Financial and Lincoln Investments. Why would two investment companies want to share the same name and cause confusion and possibly give away their business to a similar sounding company.

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1 hour ago, tony said:

zkrw

It's definitely hit or miss.  I'm just glad I figured out the difference between the two Lincolns. Lincoln Financial and Lincoln Investments. Why would two investment companies want to share the same name and cause confusion and possibly give away their business to a similar sounding company.

I'm not sure how much they compete. LF is insurance and annuities, LI is custodial accounts, although that may be only in the K-12 403b world. 

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Hi all,

I have been recently hired at Kean university in NJ from the private sector. Their benefits include a 403b. I currently have a 401k plan from my previous employer at Principal and I have a Vanguard Roth IRA account. I am happy with the latter because of the returns and the low fees. I am pretty hands off when it comes to choosing investments because I have a limited understanding of how this works. I do think it makes sense to roll over into a single plan, though.
My question is the following, Kean has the following insurance companies they deal with, which one is the most client friendly, most return effective in the long run?

AXA Financial (Equitable), Empower Retirement (formerly MassMutual), MetLife (formerly Travelers/CitiStreet), Prudential Retirement Services, TIAA, AIG Retirement Services (formerly VALIC), and VOYA

Thank you,

Thomas

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Hi all,

I have been recently hired at Kean university in NJ from the private sector. Their benefits include a 403b. I currently have a 401k plan from my previous employer at Principal and I have a Vanguard Roth IRA account. I am happy with the latter because of the returns and the low fees. I am pretty hands off when it comes to choosing investments because I have a limited understanding of how this works. I do think it makes sense to roll over into a single plan, though.
My question is the following, Kean has the following insurance companies they deal with, which one is the most client friendly, most return effective in the long run?

AXA Financial (Equitable), Empower Retirement (formerly MassMutual), MetLife (formerly Travelers/CitiStreet), Prudential Retirement Services, TIAA, AIG Retirement Services (formerly VALIC), and VOYA

Thank you,

Thomas

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Avoid the insurance companies entirely, if you can.  TIAA is the best from that list, so far as I know (someone will jump in to correct me if I've got that wrong),  but I'd first check with your school to see whether you have 457b options before enrolling at TIAA.  Depending on what vendor(s) they offer, the 457b could turn out to be a superior alternative to the 403b (457b plans have the same limits, tax benefits and for most purposes work the same way as a 403b).  I assume you are planning to continue funding your Vanguard Roth account as well (there are some income limits above which you can't contribute to the Roth, but most folks in the education world stay below the threshold).

You also should consider rolling the 401k funds from your prior employer into a traditional IRA account at Vanguard: lower costs (maybe by a lot), more flexible investment options.

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I agree TIAA might be a better than the rest  choice. HOWEVER, take a look at Voya to see if they might offer a self directed account which allows you to tap into Vanguard. Do the same with AIG. You will need to check what plan Voya/AIG offers  your institution to see if that option is possible. It might b and if it is you can get Vanguard. Somewhere in the back of my mind I think I remember them having a reasonable option in some plans. If they don't than TIAA is your only choice. Stay away from annuities.

You might repost this separately from this thread as you might get better responses.

 

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I teach in NJ and would like to set up a self directed 403B with my District. Lincoln investments is on the list. However, my HR directed me to a third party that they are using, Plan Connect. I researched and they are a subsidiary of AXA. I called them and asked how they were reimbursed and they told me through the firms when someone opens an account. Ugh. How do I proceed to open a self directed low cost account if I have to go through this third party? Thanks so much for this wonderful forum!!!

KEC

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However, my HR directed me to a third party that they are using, Plan Connect.

 

KEC

Things are so stupidly complex in 403bland that yours or anybody's questions are not always easy to answer with 100% accuracy.  I think(don't know for sure) that you don't need to go through the third party. Stay away from HR too.  They usually  don't know squat about investments.Get the paperwork directly from Lincoln investments. Call them. Tell them your district and  confidently tell them you want to self direct account and want the paperwork sent directly to YOU. No advisors. Fill it out, pick the funds you want-hopefully Vanguard/Fidelity index funds and send it back. The account should open. That's what self direct means, "stay the hell away from me , I can do this on my own"

Give this a try. That's What I  did when i had a self directed account with Aspire. They( School Officials) kept referring me to people , usually salespeople upping my cost. i called ASPIRE directly at their main office and they told me straight away that all I had to do was pick the funds I wanted on the form and right self direct on the application. IT WORKED!!  No more runarounds. I feel confident this may be the way around for you too.

You see, more often than not these folks won't recommend what's best for you. They are looking after themselves  and they know when it's more money for you it's less for them. You have to beat the system, honestly but aggressively.

 

 

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