U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 06-27-2007, 07:51 AM
 
357 posts, read 1,698,738 times
Reputation: 331

Advertisements

I contribute to a 403b, we do not have a 401k. This contribution earns a guaranteed fixed rate of 3.5% and quarterly an extra 2%. I was told by the woman that handles my account that I should stay in this because retirement is important and teachers tend to not have a lot of assets. I am in my mid 30's. I contacted a free financial planner through my work and they suggest considering my age to invest this money in a variable account. They asked me a series of risk-tolerance questions. I came out to be considered moderately risk. They suggested 50% bonds fixed, 25% large cap, 6% small cap, 19%International stocks, 7% something else which I am not sure.

So now I am not sure what to do? I do not have a lot of money and I work very hard to put this money into the 403B. I am not even sure if I changed it to a variable, if I should be moderately risk. I answer the questions but was not even sure if I answered the questions right.

please help.

I can also switch my defined pension benefit plan from a fixed amount when I retire or I can switch to their investment plan.
Reply With Quote Quick reply to this message

 
Old 06-27-2007, 09:50 AM
 
Location: WA
5,392 posts, read 21,382,389 times
Reputation: 5878
There are a number of diversified portfolio models available to use as a reference. Every one of them when back tested will yield well more than the guaranteed returns.

I would suggest doing some research (you can PM me for suggestions but the mods seem to cut posted info) and develop a broadly diversified portfolio. At your age I would certainly not lean so heavily on bonds.

In today’s age many more people must take responsibility for managing their own retirement funds. Unfortunately there are many questionable advisors so a second or third opinion on any option is appropriate.
Reply With Quote Quick reply to this message
 
Old 06-27-2007, 10:14 PM
 
Location: Sacramento
13,784 posts, read 23,798,899 times
Reputation: 6195
The answer to your question is actually quite easy. Take a look at how much money you presently have put away, and then subtract 15% for a sudden market "correction" or downturn. If this happened, would you lose sleep over this? If you would, then stick with what you are currently doing.

One middle ground though, move 20% of your money into a stock account and give it three years, and see how you feel dealing with it. I know some folks who got comfortable and significantly increased their risk/reward capacities, and others who absolutely couldn't handle it.

Only you know how you will feel.
Reply With Quote Quick reply to this message
 
Old 07-15-2007, 09:11 PM
 
29,764 posts, read 34,848,700 times
Reputation: 11675
Try going to 403B.COM it is a great site for teachers and is about how not do be abused with your 403B
Reply With Quote Quick reply to this message
 
Old 07-16-2007, 02:46 PM
 
357 posts, read 1,698,738 times
Reputation: 331
Hey, thanks for your above replies. I would not lose sleep over losing 15% so I guess I am good with investing in this manner. Will check out that site, too.
Reply With Quote Quick reply to this message
 
Old 07-23-2007, 07:20 PM
 
29,764 posts, read 34,848,700 times
Reputation: 11675
Default Annuity withdrawal fees

If you have a fixed rate retirement it is probably an annuity offered by an insurance company. A 3.5 percent return after inflation is really nothing. Add in their admin cost which are high on fixed annuities and you may be losing money. Unfortunately you may have to pay a hefty fee to pull your money out and put it in something else. The historical return for the stock market is over 9%. 403B.Com was started by educators wanting to stop other educators from getting ripped off.
Reply With Quote Quick reply to this message
 
Old 07-23-2007, 08:16 PM
 
29,764 posts, read 34,848,700 times
Reputation: 11675
Sorry the correct address is 403(b)wise: The 403(b) Information Center
Reply With Quote Quick reply to this message
 
Old 07-25-2007, 01:29 PM
 
Location: california
437 posts, read 1,011,998 times
Reputation: 631
Default self directed ira

As Tuborg said, that's probably an annuity with a life insurance company. They are basically using your money and giving you pittance in return, not even keeping up with inflation.

Personally I have never used an investment broker. A friend of mine did and lost thousands in a few short years. They rake in their commissions from your money off the top, and switch you to funds where their commissions are higher. You don't need that. In my opinion it's far better to deal directly with the companies. For example, I used to seek out low load companies each year and pick a different one each time for an IRA. Then I would stick with a few basic ones.

After doing this for quite a few years, I recently set up a self directed IRA and am very happy with this, as it opens the investment options to many more funds. Basically the company is the custodian, and you direct the company to make the investments anywhere else that you wish. You can put your funds all in one place and leave them there, or put them different places, and move them any time that you wish. There is no longer a management fee and the costs are quite low.

From my viewpoint, an ounce of gold bought the same number of loafs of bread 94 years ago as it would purchase today. There has been no change of this. However it would take many more dollars, as the "value" of the paper has gone down. If it took 1 dollar to buy a loaf of bread then, it might take $680 of them now. Thus if you'd put a gold coin in your closet 94 years ago it would have held it's value well, but if you'd put 680 paper dollars in there they'd only be worth 1 dollar, in today's money, now.

So where you invest and what you get is important. Watch out for the shysters. One thing I did with a 403b was to liquidate it and have it transferred to a IRA where I have the control of MY funds, instead of having to wade through red tape with an insurance company. Once you move to a self directed IRA, then you can invest in almost anything that you wish.
Reply With Quote Quick reply to this message
 
Old 09-23-2007, 08:48 PM
 
29,764 posts, read 34,848,700 times
Reputation: 11675
How many people kept their money in their 403B instead of rolling to an IRA. I am with Fidelity and have a ton of funds to select without fees to buy or sell. In an IRA would need to pay to move between funds. I have another fund for stocks.
Reply With Quote Quick reply to this message
 
Old 09-25-2007, 04:35 PM
 
Location: california
437 posts, read 1,011,998 times
Reputation: 631
Default self directed IRA

I pay $7 for each transaction in Scottrade, and $12 for each one in TDAmeritrade. However, the first few are free in TDAmeritrade and I rarely change them anyway.

The investments can be in mutual funds, stocks, and almost anything as long as it's held in the IRA. I could use the funds to purchase real estate and rent it out if I wanted, as long as the property is for the benefit of my IRA and not for my personal use.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top