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Tax Deferred Savings Plans Vendors
Old 07-26-2014, 04:56 PM   #1
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Tax Deferred Savings Plans Vendors

My boyfriend and I live in Georgia and we are both starting the school year with new teaching positions. I landed a position with Fulton County Schools and he landed a position with Cobb County School District, both reputable districts to work for. My boyfriend received a list of vendors he can choose to invest his money with, and both of us are trying to figure out what the best option is for him (I haven't received my information yet). His school district is allowing him to contribute to both 403b and 457b; here are his options:

ING Reliastar- 403b, 457b, 403b
Lincoln Financial- 403b, 457b
MetLife- 403b, 457b
SYMETRA- 403b, 457b, 403b with mutual funds
USAA- 403b, 403b with mutual funds
VALIC- 403b, 457b, Roth 403b, Supplemental Retirement Plan
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Old 07-26-2014, 05:03 PM   #2
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First... welcome... and congrats on the jobs and starting off planning on saving...

Second... can't give much info with the info given.. it all depends on the fees...

As an example.. one of my sisters worked at a place that had 403(b)... and they had a cap on expenses of 1.25% for all vendors... surprise, surprise... all of them charged 1.25%... even if you put your money in a lower cost fund, they made it up in some other fee....
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Old 07-26-2014, 05:13 PM   #3
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Thank you for responding. After reviewing some of the information on this site I realized I didn't give anyone much to work with regarding my thread lol. I guess I was looking more for everyone's opinion regarding the reputation of each company. I would like to know this: what should we (my bf and I) look for when we're picking an investment company besides a name? The list of vendors I typed in my initial post does not list the different types of fees and offers; it only offers a list of representatives for each vendor. My boyfriend is 27 and wants to retire at 60; I am 28 and want to retire at 58. We both have a 401k(through Vanguard) that we invested with when we worked for our old jobs. We recently purchased 250k life insurance policy with Primerica to protect each other from scrambling for money if God forbid either one of us passes, we are both putting in money to our TRS (Teacher retirement system) and we know we both want a Roth IRA (after, of course, we purchase a home and assess how much we can save when the dust settles from looking at all of our bills and seeing what we have left over to save). What would be our next step for supplementing our future? What should we look for if we want to have at least 1 million apiece upon retiring?
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Old 07-26-2014, 05:43 PM   #4
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Fees matter - a lot. Find out what their fees are and what investment options they offer. That will give you and us something to go on.

Oh, and welcome to the forum.
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Old 07-26-2014, 05:53 PM   #5
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Quote:
Originally Posted by travelover View Post
Fees matter - a lot. Find out what their fees are and what investment options they offer. That will give you and us something to go on.

Oh, and welcome to the forum.
Yes, that is where to concentrate...lowest expenses.

Decide on what you want for your asset allocation (domestic equities, foreign equities, bonds/stable value). Look up the expense ratios for the funds that you would use to build that allocation. At your age, I would have nearly zero percent bonds...maybe 75 25 domestic/foreign. THe expenses will be higher for foreign, but look at the index funds...those will have the lower expenses.
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Old 07-26-2014, 05:59 PM   #6
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Of the list, USAA probably has the best reputation, especially for insurance, investments not so much. That's the first one I would look at closely for the underlying fees. You might be able to quickly tell if a 2nd one has higher fees relatively quickly.


Life insurance from Primerica? I hope it was term insurance. If not, working with them is not going to get you to that million dollars.

As for what to do to get a million, I think you will need to save at least half of your gross income every year for quite a while. Basically, keep living like students, ooops check that, keep living like poor students in debt.

For investing help, best site on web: www.bogleheads.org
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Old 07-26-2014, 06:02 PM   #7
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Yep, fees matter, plus what funds they offer.

As far as the reputations, USAA is pretty highly thought of. I've heard a lot of good comments about them and can't recall anything bad. I also have my home and auto insurance with MetLife and have always been happy with their claims and customer service, but I don't have any experience with their financial services.

I have a vague recollection of some less than flattering comments about Lincoln Financial, but I may have them confused with someone else. I've heard of ING but really only from their NYC marathon sponsorship, and I don't know anything of the other two.
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Old 07-26-2014, 06:03 PM   #8
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Every one of these companies EXCEPT USAA is an annuity provider tied into an insurance company. My guess is the only reasonable choice will be USAA.
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Old 07-26-2014, 06:10 PM   #9
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[QUOTE=LOL!;1475790]

Life insurance from Primerica? I hope it was term insurance. If not, working with them is not going to get you to that million dollars.

Yes, it is leveled term insurance.
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Old 07-26-2014, 08:49 PM   #10
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I do not know how your teaching pension system operates, but if it is a generous one, you may consider stuffing your Roth IRAs to the gill before considering tax differed. I spent the first 15 years of my career in the 15% tax bracket and the back half in the 25% bracket and retired with a pension in the 25% tax bracket. If you follow suit, it makes little sense to me to differ taxes in the lower bracket and then pay higher taxes on it when you withdraw it. Plus, you can set your Roth in Vanguard or another low cost mutual fund family and not get fee'd to death. Just something to consider as teachers usually start out on the low end of salary schedule and build up after time and advanced degrees. It just depends on how big your pension will be in relation to your income your final few years before retirement.


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Old 07-26-2014, 10:54 PM   #11
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First, welcome and congratulations on your decision to save for your financial future.

I agree with others that as long as you are at or below the 15% federal tax bracket (your last $100 of income is taxed at 15% or less) it makes more sense to save in a Roth IRA with Vanguard or Fidelity rather than tax-deferred accounts, so max your Roth IRA out first. When you're still in that tax bracket and have maxed out your Roth, then save in a taxable account with Vanguard or Fidelity. With both of these companies you'll have a wide choice of no-load, low-cost index mutual funds available to you (Vanguard Total Stock Market Index fund and Vanguard Total International Stock Index fund being good examples).

If you are in the 25% tax bracket or higher (now or in the future), then tax-deferred savings makes sense. Of the providers you listed, I would look first at USAA and MetLife and look for broad based equity index funds with low fees.

I would reconsider the life insurance based on what you have told us that you are both working unless you own a home together or have other financial obligations. Think of it this way - if one or the other of you died, what would happen and what would you need money for?
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Old 07-27-2014, 09:48 AM   #12
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I will also agree that a ROTH is a better first investment IF you do not get any matching funds...

So, are there matching funds
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Old 07-28-2014, 07:22 PM   #13
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I want to thank all of you for your inputs. You've helped me think about a lot and encouraged me to learn more about investments independently as well. I went to my teacher training today and found out they do not do employee contribution match, but I have the options of opening a 403b with Lincoln Financial, Valic and CIAA-cref. I've heard absolutely horrible things about Valic and a lot of good things about CIAA, so I'm debating whether I should open up a 403b with them before I lose the opportunity, or wait and see if I ever fall into the top 15% and have to rely on a 403b to save my paycheck from destructing in tax penalties.

My boyfriend did not find out if his district matches, but he will soon.

Some of you suggested Fidelity for a roth ira, but I read that TD Ameritrade is good too. Any suggestions/information regarding AmeriTrade?
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Old 07-28-2014, 08:11 PM   #14
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For a ROTH, go with Vanguard or Fidelity... those are the two best options...
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Old 07-28-2014, 08:15 PM   #15
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Okay I will look into both. Do you have any suggestions or information regarding TIAA?
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Old 07-28-2014, 08:18 PM   #16
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While I don't think a 403b makes sense unless you are above the 15% tax bracket, if you do a 403b, TIAA-CREF is a good player and world's better than VALIC or Lincoln.
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Old 07-28-2014, 08:36 PM   #17
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Bri, don't hold your breath on your boyfriend getting a match either. It looks like in Georgia they are contributing 14% of your salary already towards your retirement. I doubt if many schools down there would offer a match. In my state, none of them do that I am aware of because they are already shelling out 14.5% of total compensation package already.


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Old 07-28-2014, 08:37 PM   #18
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TIAA-CREF is well-regarded, so a better choice in the 403(b) unless you have Vanguard available. They have so many funds and not all choices are available in all plans, that you would have to list the options here. Might as well list the USAA options as well.

I don't think you are going to get a "portfolio by internet" without learning something from some books. May I suggest "The Bogleheads' Guide to Investing" as a good starter book to read? Or perhaps something like "Common Sense on Mutual Funds". Maybe others have some suggestions, too.
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Old 07-28-2014, 08:43 PM   #19
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Don't forget to find out if the school district is a part of the Social Security System. If it is not, you can end up like the people in Detroit - the government pension system is weak and there is no SS to fall back on . If there is no SS, then it is even more imperative that you invest for yourself in funds that you control and nobody else can mess with.

I would have given a lot to have TIAA-CREF available for my 403b account. Alas, all I had were high fee, loaded funds. So I just contributed to the money market fund and just a bit at that. I never understood why my supposedly omnipotent teacher's union allowed us to be taken advantage of by these awful investment funds.
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Old 07-28-2014, 09:15 PM   #20
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My boyfriend's school district pays into social security, my district does not. When I find out the specific plans that are offered to me under TIAA and for my boyfriend under USAA, I will let you all know. LOL I appreciate the book suggestions. As soon as I get a chance, I will look into purchasing one, if not both. I can't thank you all enough!
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