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Warsad

Single Vendor AIG options

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Does AIG have any very low cost index funds or ETFs in your district. At my wives school district AIG is the single vendor. I looked on online however I did not see any. The lowest expense ratio I saw was .68. Which is ridiculous to me. Please let me know if anyone has AIG as a single vendor and how did you locate the low cost funds. 

 

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30 minutes ago, Warsad said:

At my wives school district AIG is the single vendor.

That's very sad actually only one vendor and a not so good one.  A sad monopoly. A .68 expense ratio isn't so bad considering they and like minded companies usually fleece you for so much more under these plans.  I'm all for limiting choices when choices are decent and fair but you wife is getting the shaft. Most school systems have more variety even if they are only sub par ones. This situation leaves your wife with very limited options and is unfair.

Might your  wife have access to a state 457b plan that teachers can participate in?  What state are you in? If it exists with minimal paperwork you can probably get it on your wife's vendor list. We can guide you.

Might you have access to Valic? Valic is a subsidiary of AIG and does offer some brokerage options and somewhat lower mutual fund platforms if they are available to you. Does AIG offer a self directed/brokerage option in her district? That might be an escape hatch.

I get a feeling you may need to contact her business manager and if you don't get any satisfaction because of their financial ignorance than contact a school board member and ask for better choices. One easy add on would be Aspire. You can use them to self direct into Vanguard Funds.  

 

Hope I'm giving some direction. You do not need your wife in any annuity. If nothing else happens invest directly in an IRA with Vanguard index funds or Fidelity Index funds and in taxable accounts but under no circumstance give in to the annuity BS.

Tony

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Tony, VALIC has changed their name to AIG. I agree that if there's only a single vendor, it's possible that the 403b is a mutual fund based custodial account, and not their usual variable annuity. We need to know more, like a screen s-h-o-t of what's on offer. Or the name of the AIG 403b plan? Or the fees of the plan?

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1 hour ago, krow36 said:

VALIC has changed their name to AIG.

I knew they were one and the same now  but why is Valic Financial Advisors still showing up on local provider lists . Is that to service older accounts ?  Or is that a new group capitalizing on an old brand name. Also I wonder if AIG incorporated some of Valics non annuity platforms. 

We certainly need this gentleman to return and gives us more information.

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To the original poster: be sure to search diligently when trying to identify the fees.  It is entirely possible that the fund expense ratio isn't the full extent of it.  403b plans often have fees labeled something like "maintenance" or "administration" that are imposed on top of the fund expenses.  I hope that isn't the case, but you should definitely look carefully--some of these outfits really bury that information.

To anybody: when did that Valic to AIG name change take place?  VALIC got some bad publicity and a judgement against them a while back related to their 403b management in Florida, I wonder whether that motivated the change.

 

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3 hours ago, Why Me said:

To anybody: when did that Valic to AIG name change take place?  VALIC got some bad publicity and a judgement against them a while back related to their 403b management in Florida, I wonder whether that motivated the change.

 

Name changes are good , you can start anew and forget your past. Others will forget you too.  You'll  sound fresh and new while still offering the same crappy products. The 403b land is the wild wild west .There is always a new town to fool.

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Thank you all for the insightful comments. Forget to post background info. 
 

Wife: State of Georgia: 37 years old  teaching for 15 years 

I am: 38 former teacher (11 years)
 

 

 I will check to see if my wife can contribute to the state 457 plan here in Georgia. Not sure yet. I have been searching but unclear for Georgia.  
 

We both max out our Roth IRAs & I was looking to max out both her Roth457b (19.5k)and Roth 403bs (19.5k) Thanks to profit on house sale).  I was thinking we could invest almost 80k over next 2 years in her supplemental retirement plans. 

But the fees and options were appalling. Bc in my former school district we had pretty decent options without all of those junk fees and admin fees. 

Moreover, I will never invest(I use this term invest very loosely)  in an annuity ever again. I  hate those products. I got taken early in my career with one. I feel like they are almost the equivalent to a pay day loan for teachers. Rip off! 
 

Thank you all again. 

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1 hour ago, Warsad said:

 I will check to see if my wife can contribute to the state 457

If she can't  state 457  and in some states teachers are excluded, maybe you/she needs to start advocating for additional choices. I was successful in getting some good choices added when I was working and others have done so successfully as well. If you are  willing to put in the effort you can do yourselves and current/ future teachers a great service by asking for better options. Aspire is an easy one to add and with its self directed account you can get into Vanguard funds relatively cheaply. Fidelity or Vanguard directly would be amazing but adding them might present greater challenges. A good place to start is with your school personal director and or business manager. If they show little understanding you might contact a school board member and ask them to consider it. If you are polite and knowledgeable in your request, they might see it as an opportunity to add value to teaching. It worked for me.

 

Also don't forget to post the AIG plan your wife is under so we can dissect it and see if their is a way around those high fees.

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Warsad, have you checked out the list of AIG 403b plans on the 403bcompare link I posted? The plan of possible use could be the Group plan. The index fund ERs modest, but the question is what is the Group's management/wrap fee, which can be 0% to 1.0%? The Group plan is a custodial account, not an annuity contract. So there's no M&E fee of 1.2%, or a surrender fee. 

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On 1/30/2021 at 1:58 PM, krow36 said:

Warsad, have you checked out the list of AIG 403b plans on the 403bcompare link I posted? The plan of possible use could be the Group plan. The index fund ERs modest, but the question is what is the Group's management/wrap fee, which can be 0% to 1.0%? The Group plan is a custodial account, not an annuity contract. So there's no M&E fee of 1.2%, or a surrender fee. 

Yes, I did  check the website. But it appears to be for California not Georgia. Maybe I’m missing something. I am scheduled to talk with the Insurance salesman or saleswoman on Next week with my wife to see all of the options. 

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Watch out!  The insurance salesperson is motivated sell you an insurance product that profits the insurance salesperson.  This is almost never the best choice for you.  (They may also offer mutual funds inside some kind of advisory wrapper that gives them a commission which effectively comes out of your investments.) Can you follow up here with some of the suggestions above--screen captures of the website, answers to the question about 457b availability, etc.? 

You are likely to get a better deal if you can completely avoid the salesperson.  This could have a meaningful impact on your eventual retirement nestegg.

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Yes, 403bcompare is for CA, but the vendors use generic products throughout the US. With AIG's group plans, the admin fee will vary up to 1.0%, depending on the size of the district. The group plans are mutual fund based, not annuities. Good luck! 

 

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3 hours ago, Warsad said:

Yes, I did  check the website. But it appears to be for California not Georgia. Maybe I’m missing something. I am scheduled to talk with the Insurance salesman or saleswoman on Next week with my wife to see all of the options. 

I agree with Tony. The insurance salesman is going to mislead you. They are not financial advisers who would point you in the direction of taking care of your interests. I would not waste my time. 

As krow said, you can still find information on 403bcompare.com. 

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