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New Teacher

401k To 403b

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Hello,

 

I'm new to this board, and relatively new to investing. I just left the private sector and began teaching at a public school this year. When I was hired I was handed a list of 403b providers and given little to no information about what a 403b is or how it compares to a 401k, so I'm thankful that I stumbled across this site before I chose a company to deal with.

 

I have a small 401k with American Funds and I'm planning on rolling it over into a 403b with the Vanguard Group. I know that I need to contact AF and Vanguard to initiate the process and I'm wondering if there are any dangers that I need to be aware of when rolling over the account?

 

The other companies on the vendor list include:

 

John Hancock

Keystone Financial Group

Travelers

Union Central Life Insurance

Met-Life

Hoarce Mann

Thrivent for Lutherans

Marella Financial Group

Sun Life

Variable Annuity Life Ins.

Security Benefit Life Ins.

Delaware Management

Paul Revere

American Express

Midland National Life

Lincoln Investment and Planning

Equi-Vest

 

Any comment on any of these companies and how they compare to Vanguard?

 

Thanks,

Chris

 

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Do yourself a favor and go with Vanguard. The other funds are fee-loaded variable annuities; most of these companies also have surrender charges. You should feel fortunate that you have Vanguard; most districts do not have such an outstanding choice.

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Moving your American Funds IRA to vanguard may not make the most sense. American Funds has some of the most experienced portfolio managers around(20+yrs on average), which explains why they have some of the best track records of any investment firm. In addition to their low fees for a loaded fund family, they have been on #1 three years in a row on the Barron's list of top fund families(even ahead of vanguard#4, TIAA-CREF does not even the top 40.)

 

BTW-you probably did'nt even pay a sales charge in your 401k, which is even better. So find an advisor to help enhance your american funds portfolio to build those retirement dreams..

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Chris,

 

It seems that your question is divivided in two parts; what to do with the money that is at American now, and where to invest new money.

 

new money-- If all funds except Vanguard charge a load, it is my belief that it is best to go with Vanguard.

 

old money at American- Mike's comment has some merit. If the load of the fund at American has been paid, and the annual expenses, 12b-1 fees, etc are acceptable to you, you might want to evaluate the funds that you are invested in versus Vanguard. I feel that you will be empowered by doing this evaluation yourself. Morningstar issues a publication to select libraries, where you can see a complete evaluation of the funds you own, and any potential funds that you wish to consider. (Also, you can do a quick look up of your funds xpenses on the internet.

 

Morningstar also has a discussion site for those interested in Vanguard at the Morningstar site. There are several books recommended there that are worth reading, as well as the book that Dan Otter wrote,Teach and retire rich which will educate you.

 

Ira

 

 

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