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Warsad

Single Vendor AIG options

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On 2/12/2021 at 11:21 AM, Why Me said:

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.

Point well taken. I will report back. 

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Reporting back to you all. I spoke with the AIG sales agent today & this is the list of options available to my wife that was emailed to me by the agent. 
We will probably go with the Vanguard SP500 index fund expense ratio .08 percent. Looks like a great option for her. If there are no hidden fees we will proceed. But I have to do more research. What are you guys thought. 

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2 hours ago, Warsad said:

I spoke with the AIG sales agent today & this is the list of options available to my wife that was emailed to me by the agent. 
We will probably go with the Vanguard SP500 index fund expense ratio .08 percent. Looks like a great option for her. If there are no hidden fees we will proceed.

It actually looks like the SP 500 fund has an expense ratio of .04 percent, which is consistent with their retail funds.  If there are no "administrative" or "management" or "bookeeping" or "wrap" charges, you're in excellent shape.  But you need to search; chances are good that AIG wants a bit more from you within a 403b account.  Did you ask the agent about this?

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Warsad, I'm guessing your wife is a teacher with Houston County school district because "Houston" was on one of the pages you supplied. If that's the case, I was not able to find what administration fee AIG was charging the district. I found mention of the AIG 403b and 457b plans, but no details, which is disappointing, although not unusual with AIG. The list of funds included some excellent Vanguard funds, including their 500 Index fund with an ER of 0.04%. I also saw VG's Total Bond Mkt Index fund and their Developed International Stock Mkt Index fund with low ERs. So the question is, what is the admin fee.  

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11 hours ago, Why Me said:

It actually looks like the SP 500 fund has an expense ratio of .04 percent, which is consistent with their retail funds.  If there are no "administrative" or "management" or "bookeeping" or "wrap" charges, you're in excellent shape.  But you need to search; chances are good that AIG wants a bit more from you within a 403b account.  Did you ask the agent about this?

I will check the on the admin/management fees on my next conversation with the salesperson & report back to you all. 

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10 hours ago, krow36 said:

Warsad, I'm guessing your wife is a teacher with Houston County school district because "Houston" was on one of the pages you supplied. If that's the case, I was not able to find what administration fee AIG was charging the district. I found mention of the AIG 403b and 457b plans, but no details, which is disappointing, although not unusual with AIG. The list of funds included some excellent Vanguard funds, including their 500 Index fund with an ER of 0.04%. I also saw VG's Total Bond Mkt Index fund and their Developed International Stock Mkt Index fund with low ERs. So the question is, what is the admin fee.  

 

I will check the on the admin/management fees on my next conversation with the salesperson & report back to you all. Thank you all again. 

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5 hours ago, Warsad said:

 

I will check the on the admin/management fees on my next conversation with the salesperson & report back to you all. Thank you all again. 

This will be interesting!

Talking to a salesperson about fees is like talking to a salesperson about fees!

This is another one of those creative topics for T-shirt slogans.  

Any ideas?

 

Sorry Warsad, for going off your topic.

We will wait for your update. 

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Spoke with the AIG rep this morning. 

Add .39% to every fund for a holding/administration fee. 

 

So my question is should I max out 19.5K for the 403B and 457 at 19.5k or should I just invest 40k annually in a brokerage fund with Vanguard  SP500 index fund minus the .39%? 

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The administration fee is obnoxious but not devastating.  The tax benefits of either a traditional or Roth 403b/457b are likely to greatly outweigh the cost of those fees.  You need to look at your overall financial situation when making this decision, but as a rule of thumb I'd say maxing out the retirement accounts is the best move for retirement money.  Separately, if you want money for emergencies or expected pre-retirement expenses (e.g. house down payment or remodeling costs, car purchase, international vacation, help for a relative) you might additionally start a taxable non-retirement account (and in that case, consider a less volatile asset allocation than 100% stocks, so the money is there when you need it).

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