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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75538  
Subject: 403 v 457 Date: 3/16/2011 6:57 PM
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Hi.

3 years ago my husband started a new job and I just ran across a retirement statement and am horrified to realize that he has been invested in a short term fund all of this time.

I have now set up an online registration for him through Fidelity (where his retirement is housed) and am being given the option of a 403b or a 457b plan.

I don't know anything about either of these. Can you give me some ideas on what might be better for me to put him in?

A little background: We are in our 50s, we have no kids and both of us have Roth IRAs through Vanguard. He netted about $40,000 for this past tax year.

Thanks,
Caat
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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68654 of 75538
Subject: Re: 403 v 457 Date: 3/16/2011 10:56 PM
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Cart
A bit more information would help.

Who is the employer? A government? A private non-profit? A school district?

Is the choice either/or?

Can he defer up to $16,500 plus $5,500 because he is 50 or older?

What vendor investment choices are there?

Is there any employer contribution matching for his contributions? (unusual but possible)

BruceM

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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68655 of 75538
Subject: Re: 403 v 457 Date: 3/17/2011 12:22 AM
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Who is the employer? A government? A private non-profit? A school district?
State Govt. He works at a State University

Is the choice either/or?
No, I believe he can do both, we just don't have much money.

Can he defer up to $16,500 plus $5,500 because he is 50 or older?
He is 50. Is that what you're asking? We certainly cannot afford to save that much/year. We just bought a money pit that has wiped us out.

What vendor investment choices are there?
I will have to look into this, but I believe there's a core mutual fund there, but they allow you to choose anything from Fidelity, if you wanted to do it yourself. I may not get this answer right away, though, because we just found out an hour ago that his father is very sick and he may have to go out of town.

Is there any employer contribution matching for his contributions? (unusual but possible)
I do believe so, but I need to find out if it's for one of these two types or if there's a third type

This is the website link to his retirement options:
http://blink.ucsd.edu/HR/benefits/financial/index.html

Thanks. I knew you probably needed more info, I just didn't know what.

Caat

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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68658 of 75538
Subject: Re: 403 v 457 Date: 3/17/2011 2:18 PM
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Mr. Caat's father is doing much better today (you tend to get worried when the doctor starts asking about a living will!) so I can probably find some of this stuff out.

I did find that there is one other plan available, and that's a 401A where the money automatically started going into the short term investments.

Off to work right now, I will return with answers.

Thanks,
Caat :)

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68659 of 75538
Subject: Re: 403 v 457 Date: 3/17/2011 3:25 PM
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Catt
Good his father is improving.

Technically, there is no such thing as a "401(a)" plan. All qualified plans must meet the requirements of sect 401(a). But generally, it is used to denote a qualified defined contribution plan that is funded either by employer contributions only, or is a pension style plan requiring annual % of salary contributions. In the world of private employers, these are almost always funded by the employer. With public employers, it may be funded by the employer, the employer + employee or sometimes soley by the employee.

But to the 403(b) vs. 457(b) plan, for a Government employer, its kind of 6 of one, half-dozen of the other, and for me, the most important factor would be investment choices and resulting expenses, and perhaps your expected retirement age vs. beginning age for the PERS (I assume in your case, CalPERS) pension starting age.

A 403(b) is the public employee version of a 401(k), with a couple of differences. You can only invest in mutual funds (including ETFs) or annuity contracts (yuk). You set up your own account but you will be restricted to the investment choices offered by the vendor. Generally, you cannot rollover the account balance to your IRA until you separate from service or reach 59 1/2. They can be set up to allow for loans or hardship withdrawals, neither of which should you ever do.

A 457(b) is technically deferred compensation, although it shares a lot of the characteristics of a retirement plan. Unlike a 403(b), a qualified plan or a traditional IRA, there is no penalty for making withdrawals prior to age 59 1/2, which make these a good alternative to use as income if you retire prior to 59 1/2 and prior to the start of your pension. Historically, the drawback to these has been limited and expensive investment alternatives. And although you can't afford it now, in future years when you can, the contributions you make to a 457(b) may be in addition to the maximum annual contributions you can make to a 403(b) or other employer sponsored retirement plan.

Both of these, it would seem, are on a Fidelity "Platform", which means Fido will provide you the investment choices. I couldn't see these on the web site you referenced. Most certainly, all choices will be Fidelity-based, who has a reputation for broad fund selection, but in the choices will typically be some high cost funds along with some that are more reasonably priced. Once you know what these are (their symbols), you can run a check on them at the Morningstar web site...at which point we can discuss them further if you'd like.

One other possible savings method you shouldn't overlook. If you are married and file a joiht tax return, you can have an adjusted gross income of up to $90,000 in 2011 and make deductible contributions to your traditional IRAs...both of you. You DH is 50, so assuming you're not yet 50, you could contribute $6,000 (his) + $5,000 (yours) = $11,000 to your IRAs and be fully deductible, meaning you'd have exactly the same tax benefit as contributing to an employer provided retirement plan. If these above plans have no employer match, I would suggest you contribute only to your deductible IRAs, as you can set them up wherever you wish (like Vanguard) and have full control over your investments, which includes your ability to invest in only ultra low cost but well diversified selection of ETFs. Only if you need or plan to save more than $11,000 per year would I then consider the 403(b) or 457(b) plans.

BruceM

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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68660 of 75538
Subject: Re: 403 v 457 Date: 3/17/2011 11:49 PM
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One other possible savings method you shouldn't overlook. If you are married and file a joiht tax return, you can have an adjusted gross income of up to $90,000 in 2011 and make deductible contributions to your traditional IRAs...both of you. You DH is 50, so assuming you're not yet 50, you could contribute $6,000 (his) + $5,000 (yours) = $11,000 to your IRAs and be fully deductible, meaning you'd have exactly the same tax benefit as contributing to an employer provided retirement plan. If these above plans have no employer match, I would suggest you contribute only to your deductible IRAs, as you can set them up wherever you wish (like Vanguard) and have full control over your investments, which includes your ability to invest in only ultra low cost but well diversified selection of ETFs. Only if you need or plan to save more than $11,000 per year would I then consider the 403(b) or 457(b) plans.


Okay, I'm not sure I understand everything, but this is what I think you're saying: Since we both have IRAs at Vanguard, we can contribute to those and not worry about the 403 or 457. However, since our IRAs are Roths, eventhough we have full control over them, we're not getting the tax benefit (yearly deductions for investment) that we would get with traditional IRAs.

My understanding, also, is that the 401a as I see it on the website, is the only thing with money in it right now, and until I talk to his HR person, I can assume that his employer is investing into that account right now, and that since it's at Fidelity, we should be able to move it from 'short term funds' to some sort of index fund or whatever, but it really doesn't matter which plan it is in at this point. However, we would want to move it into a better fund.

There do look to be some decent fund choices. There seems to be a UCPlan that I'm guessing is comparable to Vanguard's Plans that change with retirement plans (I forget the name but something like Vanguard 2025).

So, I'm guessing that I just need to figure out,
1. Does the university invest in any of these available plans?
2. Do they match more or less for one plan or the other?
3. Are all of these funds available to all the plans?
4. (Anything I'm missing?)

And then I pretty much have to decide which plan to 'enroll' in, so I can change the fund, but it may not make that much of a difference because anything we have we invest in our Roths, *unless* I find out that the university matches, and then we should be investing in there first. (Have I got that all right?)

Thanks so much for your input. (And for your good wishes about my FIL. We're not out of the woods, but very relieved.) :)

Caat



AVAILABLE PLANS

UC 403(B) PLAN
403(b): 56016

UC 457(B) PLAN
457(b): 65270

UC DCP
401(a): 60988


AVAILABLE FUNDS
Investments 1 YR 3 YR 5 YR 10 YR Life As of Date
SINGLE, DIVERSIFIED INVESTMENTS
Blended Investments*
Asset Allocation
UC PATHWAY INCOME
Inception Date 07/01/2005 5.35 4.45 4.94 N/A 4.98 02/28/2011
UC PATHWAY 2020
Inception Date 07/01/2005 9.02 2.55 4.02 N/A 4.87 02/28/2011
UC PATHWAY 2030
Inception Date 07/01/2005 11.26 1.74 3.55 N/A 4.81 02/28/2011
UC PATHWAY 2040
Inception Date 07/01/2005 13.78 1.66 3.55 N/A 4.90 02/28/2011
UC PATHWAY 2050
Inception Date 07/01/2005 17.03 1.79 3.42 N/A 4.89 02/28/2011
UC BALANCED GROWTH
Inception Date 04/01/2004 17.27 4.63 5.15 N/A 6.16 02/28/2011
UC PATHWAY 2015
Inception Date 12/01/2008 8.10 N/A N/A N/A 16.02 02/28/2011
UC PATHWAY 2025
Inception Date 12/01/2008 10.33 N/A N/A N/A 18.02 02/28/2011
UC PATHWAY 2035
Inception Date 12/01/2008 12.48 N/A N/A N/A 19.66 02/28/2011
UC PATHWAY 2045
Inception Date 12/01/2008 15.39 N/A N/A N/A 20.44 02/28/2011
UC PATHWAY 2055
Inception Date 12/01/2008 18.96 N/A N/A N/A 23.06 02/28/2011
UC PATHWAY 2060
Inception Date 12/01/2008 20.95 N/A N/A N/A 23.95 02/28/2011

PRIMARY ASSET CLASS OPTIONS
Stock Investments
Large Cap Blend
UC DOM EQ INDEX
Inception Date 07/01/2005 24.21 3.14 3.17 N/A 4.01 02/28/2011
UC EQUITY FUND
Inception Date 01/01/1989 23.56 2.29 3.36 2.85 8.83 02/28/2011
Foreign
UC INTL EQ INDEX
Inception Date 07/01/2005 21.71 -1.62 3.38 N/A 6.45 02/28/2011
Bond Investments
Long Government
UC TIPS FUND
Inception Date 04/01/2004 7.26 4.18 5.96 N/A 5.22 02/28/2011
Intermediate-Term
UC BOND FUND
Inception Date 01/01/1989 5.10 5.50 5.84 5.81 8.16 02/28/2011
Stable Value
UC ICC FUND
Inception Date 11/28/1990
7 day yield as of
02/28/2011 3.56% 4.28 4.78 4.99 5.44 6.46 02/28/2011
Short-Term Investments
Short-Term
UC SAVINGS FUND
Inception Date 01/01/1989
7 day yield as of
02/28/2011 2.20% 2.12 2.97 3.56 4.05 5.16 02/28/2011

SPECIALIZED ASSET CLASS OPTIONS
Stock Investments
Large Cap Growth
VANG FTSE SOC IDX IS
Inception Date 01/14/2003 20.25 1.73 0.31 N/A 4.61 02/28/2011
Small Cap Blend
VANG SM CAP IDX INST
Inception Date 07/07/1997 34.01 9.16 5.28 8.24 7.94 02/28/2011
Diversfd Emerging Mkts
DFA EMERGING MKTS I
Inception Date 04/25/1994 23.10 2.96 10.58 15.17 9.18 02/28/2011
Specialty
VANG REIT IDX INST
Inception Date 12/02/2003 38.94 5.79 3.25 N/A 9.45 02/28/2011
Short-Term Investments
DREY TR PRIME CASH I
Inception Date 12/27/1988
7 day yield as of
02/28/2011 0.00% 0.00 0.35 1.96 2.00 3.88 02/28/2011

ADDITIONAL INVESTMENT OPTIONS
Stock Investments
Large Cap Growth
CALVERT EQUITY A
Inception Date 08/24/1987 24.53 5.03 4.77 4.28 7.66 02/28/2011
CALVERT LG CAP GTH A
Inception Date 10/31/2000 19.25 -0.19 -0.71 2.80 0.16 02/28/2011
FID TREND
Inception Date 06/16/1958 29.32 5.71 5.93 4.55 11.60 02/28/2011
FID MAGELLAN
Inception Date 05/02/1963 20.78 -1.75 0.96 1.09 16.70 02/28/2011
FID CONTRAFUND
Inception Date 05/17/1967 24.79 3.31 5.30 6.97 12.43 02/28/2011
FID GROWTH COMPANY
Inception Date 01/17/1983 29.78 6.37 6.00 4.30 12.98 02/28/2011
FID INDEPENDENCE
Inception Date 03/25/1983 27.92 -0.33 5.29 3.94 11.84 02/28/2011
FID OTC PORTFOLIO
Inception Date 12/31/1984 33.62 11.44 8.98 5.73 13.22 02/28/2011
FID CAPITAL APPREC
Inception Date 11/26/1986 22.09 3.45 3.01 5.21 10.49 02/28/2011
FID BLUE CHIP GR
Inception Date 12/31/1987 27.69 7.84 5.51 2.32 10.80 02/28/2011
FID LARGE CAP STOCK
Inception Date 06/22/1995 25.21 4.37 4.37 2.22 7.10 02/28/2011
FID GROWTH DISC
Inception Date 03/31/1998 34.47 0.96 4.91 3.71 5.45 02/28/2011
FID FIFTY
Inception Date 09/17/1993 25.11 -1.14 0.86 3.75 9.07 02/28/2011
FID LARGE CAP GROWTH
Inception Date 11/15/2001 29.50 3.13 0.68 N/A 2.19 02/28/2011
FID NASDAQ COMP INDX
Inception Date 09/25/2003 25.29 7.87 4.78 N/A 6.46 02/28/2011
FID LC GRO ENH INDX
Inception Date 04/19/2007 22.14 4.57 N/A N/A 1.59 02/28/2011
Large Cap Blend
CALV ENHANCED EQ A
Inception Date 04/15/1998 18.48 1.10 0.41 1.63 2.42 02/28/2011
CALVERT SOC INDEX A
Inception Date 06/30/2000 19.25 2.15 1.19 0.93 -1.31 02/28/2011
FID FIDELITY FUND
Inception Date 04/30/1930 23.73 0.75 3.71 2.94 9.99 02/28/2011
FID SEL CONS STAPLES
Inception Date 07/29/1985 13.55 4.24 8.82 7.78 13.14 02/28/2011
FID GROWTH & INC
Inception Date 12/30/1985 20.55 -7.24 -4.37 -1.48 9.46 02/28/2011
FID DISCIPLND EQTY
Inception Date 12/28/1988 15.50 -2.54 0.59 2.28 9.94 02/28/2011
FID STK SEL ALL CAP
Inception Date 09/28/1990 26.20 1.62 2.87 3.04 10.25 02/28/2011
FID DIVIDEND GR
Inception Date 04/27/1993 28.39 6.34 4.47 3.23 10.95 02/28/2011
FID EXPORT & MULTI
Inception Date 10/04/1994 19.08 0.86 2.31 5.22 12.22 02/28/2011
FID FOCUSED STOCK
Inception Date 11/12/1996 36.23 7.98 6.44 2.65 5.73 02/28/2011
FID FOUR IN ONE IDX
Inception Date 06/29/1999 20.68 2.71 3.59 4.18 3.38 02/28/2011
FID MEGA CAP STOCK
Inception Date 12/28/1998 22.58 1.52 2.88 2.91 2.28 02/28/2011
SPTN TOT MKT IDX INV
Inception Date 11/05/1997 24.39 3.24 3.41 3.69 4.93 02/28/2011
FID SEL CONS DISCR
Inception Date 06/29/1990 29.75 8.82 4.07 3.51 9.19 02/28/2011
SPTN 500 INDEX INV
Inception Date 02/17/1988 22.47 2.16 2.82 2.53 9.58 02/28/2011
FID VALUE DISCOV
Inception Date 12/10/2002 21.85 -0.20 1.58 N/A 8.71 02/28/2011
FID BLUE CHIP VALUE
Inception Date 06/17/2003 15.31 -3.87 -1.18 N/A 4.29 02/28/2011
FID LC CORE ENH INDX
Inception Date 04/19/2007 20.25 1.46 N/A N/A -0.91 02/28/2011
FID 130/30 LG CAP
Inception Date 03/31/2008 18.81 N/A N/A N/A -7.80 02/28/2011
Large Cap Value
FID EQUITY INC
Inception Date 05/16/1966 22.57 0.37 1.65 3.22 11.70 02/28/2011
FID EQUITY INC II
Inception Date 08/21/1990 21.24 -0.38 0.58 2.85 10.33 02/28/2011
FID SEL INDUSTRIALS
Inception Date 03/03/1997 37.85 8.10 7.95 9.47 10.00 02/28/2011
FID LARGE CAP VALUE
Inception Date 11/15/2001 16.12 -3.58 -1.19 N/A 3.51 02/28/2011
FID LC VAL ENH INDX
Inception Date 04/19/2007 20.15 -1.05 N/A N/A -4.04 02/28/2011
Mid-Cap Growth
CALVERT CAP ACC A
Inception Date 10/31/1994 37.76 6.86 4.46 2.10 7.57 02/28/2011
FID SEL LEISURE
Inception Date 05/08/1984 31.16 10.72 7.46 6.80 13.91 02/28/2011
FID NEW MILLEN
Inception Date 12/28/1992 26.93 6.68 5.58 5.51 13.94 02/28/2011
FID GROWTH STRAT
Inception Date 12/28/1990 29.97 3.13 2.85 -3.20 8.44 02/28/2011
FID MID CAP STOCK
Inception Date 03/29/1994 25.24 5.13 3.69 4.03 11.62 02/28/2011
FID SEL IT SERVICES
Inception Date 02/04/1998 30.62 14.74 10.05 7.48 10.42 02/28/2011
FID MID CAP GROWTH
Inception Date 11/15/2001 29.91 3.00 0.15 N/A 4.14 02/28/2011
Mid-Cap Blend
FID VALUE STRAT
Inception Date 12/31/1983 29.19 4.48 3.72 6.66 12.01 02/28/2011
FID SEL AIR TRANSPRT
Inception Date 12/16/1985 22.26 7.97 4.66 5.26 10.18 02/28/2011
FID SEL RETAILING
Inception Date 12/16/1985 22.24 16.91 7.77 6.54 12.58 02/28/2011
FID SEL DEFENSE
Inception Date 05/08/1984 26.79 2.49 5.10 9.72 11.08 02/28/2011
FID LEVERGD CO STK
Inception Date 12/19/2000 32.72 1.15 4.95 14.17 14.38 02/28/2011
FID LOW PRICED STK
Inception Date 12/27/1989 24.41 6.13 5.22 11.11 14.61 02/28/2011
SPTN EXT MKT IDX INV
Inception Date 11/05/1997 32.95 7.62 5.67 7.58 6.72 02/28/2011
FID SEL INDUST EQUIP
Inception Date 09/29/1986 38.87 5.35 6.96 7.67 9.97 02/28/2011
FID SEL CONSTR/HOUSE
Inception Date 09/29/1986 26.24 5.99 0.55 9.08 11.01 02/28/2011
FID SEL TRANSPORT
Inception Date 09/29/1986 34.32 10.01 5.48 8.84 12.53 02/28/2011
FID MID CAP ENH INDX
Inception Date 12/20/2007 29.44 6.39 N/A N/A 3.12 02/28/2011
Mid-Cap Value
FID VALUE
Inception Date 12/01/1978 28.03 3.17 2.37 7.81 12.55 02/28/2011
FID SEL CHEMICALS
Inception Date 07/29/1985 37.74 9.58 13.24 13.27 14.27 02/28/2011
FID SEL CONSUMER FIN
Inception Date 12/16/1985 5.83 -19.51 -20.29 -6.98 7.97 02/28/2011
FID SEL AUTOMOTIVE
Inception Date 06/30/1986 50.90 12.62 8.05 9.32 9.39 02/28/2011
FID MID CAP VALUE
Inception Date 11/15/2001 29.43 5.24 3.84 N/A 8.45 02/28/2011
Small Cap Growth
FID STK SEL SM CAP
Inception Date 06/28/1993 40.17 5.02 2.80 6.91 7.86 02/28/2011
FID SM CAP DISCOVERY
Inception Date 09/26/2000 39.66 16.39 9.40 10.83 10.85 02/28/2011
FID SMALL CAP GROWTH
Inception Date 11/03/2004 32.08 5.72 4.97 N/A 9.64 02/28/2011
Small Cap Blend
CALVERT SM CAP VAL A
Inception Date 10/01/2004 26.25 4.43 2.90 N/A 3.65 02/28/2011
FID SMALL CAP STOCK
Inception Date 03/12/1998 30.30 10.59 6.36 9.34 9.85 02/28/2011
FID SMALL CAP VALUE
Inception Date 11/03/2004 29.67 11.07 6.20 N/A 10.88 02/28/2011
FID SM CAP ENH INDX
Inception Date 12/20/2007 34.01 6.65 N/A N/A 2.90 02/28/2011
World
FID WORLDWIDE
Inception Date 05/30/1990 28.34 1.86 5.20 6.30 7.71 02/28/2011
Foreign
CALVERT INTL EQ A
Inception Date 07/02/1992 15.54 -7.38 -2.69 1.12 3.83 02/28/2011
FID OVERSEAS
Inception Date 12/04/1984 17.28 -7.00 0.72 3.70 10.69 02/28/2011
FID INTL DISCOVERY
Inception Date 12/31/1986 22.13 -2.65 3.19 7.08 8.36 02/28/2011
FID CANADA
Inception Date 11/17/1987 31.97 2.34 8.92 14.01 11.65 02/28/2011
FID DIVERSIFD INTL
Inception Date 12/27/1991 20.93 -3.36 2.19 6.93 9.39 02/28/2011
FID INTL CAP APPREC
Inception Date 11/01/1994 24.10 -0.19 1.63 5.06 5.98 02/28/2011
SPTN INTL INDEX INV
Inception Date 11/05/1997 20.34 -2.04 2.66 4.83 5.23 02/28/2011
FID INTL SMALL CAP
Inception Date 09/18/2002 32.90 2.22 3.96 N/A 18.38 02/28/2011
FID INTL SM CAP OPP
Inception Date 08/02/2005 30.07 -7.12 -1.70 N/A 3.96 02/28/2011
FID INTL VALUE
Inception Date 05/18/2006 21.95 -3.40 N/A N/A 0.29 02/28/2011
FID TOTAL INTL EQ
Inception Date 11/01/2007 22.66 -2.05 N/A N/A -5.86 02/28/2011
FID INTL GROWTH
Inception Date 11/01/2007 24.28 1.33 N/A N/A -2.73 02/28/2011
FID INTL ENH INDEX
Inception Date 12/20/2007 20.95 -3.67 N/A N/A -5.46 02/28/2011
Int'l Specialty
FID INTL REAL ESTATE
Inception Date 09/08/2004 22.41 -5.62 -1.11 N/A 5.23 02/28/2011
FID EMEA
Inception Date 05/08/2008 27.21 N/A N/A N/A -1.20 02/28/2011
Diversfd Emerging Mkts
FID EMERGING MKTS
Inception Date 11/01/1990 20.62 -5.37 6.32 13.27 6.00 02/28/2011
Diversfd Pacific/Asia
FID PACIFIC BASIN
Inception Date 10/01/1986 31.88 2.03 5.84 8.25 6.90 02/28/2011
Europe
FID EUROPE
Inception Date 10/01/1986 23.86 -2.26 2.70 6.13 9.59 02/28/2011
FID EUROPE CAP APP
Inception Date 12/21/1993 23.41 -3.55 2.81 6.29 9.44 02/28/2011
FID NORDIC
Inception Date 11/01/1995 32.31 -3.50 5.80 7.36 11.60 02/28/2011
Japan
FID JAPAN
Inception Date 09/15/1992 17.93 -2.07 -3.76 1.88 4.03 02/28/2011
FID JAPAN SMALL CO
Inception Date 11/01/1995 19.74 1.11 -7.00 4.01 3.75 02/28/2011
Latin America
FID LATIN AMERICA
Inception Date 04/19/1993 18.52 -1.32 11.37 18.28 12.15 02/28/2011
Pacific/Asia ex-Japan
FID EMERGING ASIA
Inception Date 04/19/1993 23.69 -3.27 9.44 12.16 8.14 02/28/2011
FID CHINA REGION
Inception Date 11/01/1995 22.53 5.17 13.57 10.87 10.39 02/28/2011
Specialty
FID SEL COMPUTERS
Inception Date 07/29/1985 37.19 14.10 9.75 3.77 12.26 02/28/2011
FID SEL ELECTRONICS
Inception Date 07/29/1985 34.87 13.61 3.32 1.29 11.03 02/28/2011
FID SEL SOFTWARE
Inception Date 07/29/1985 30.85 12.31 11.89 7.81 15.34 02/28/2011
FID SEL GOLD
Inception Date 12/16/1985 37.35 7.32 15.82 22.37 9.67 02/28/2011
FID SEL BIOTECH
Inception Date 12/16/1985 9.11 5.75 1.69 0.35 11.36 02/28/2011
FID SEL ENERGY SVCS
Inception Date 12/16/1985 47.38 -1.12 7.50 9.76 10.61 02/28/2011
FID SEL INSURANCE
Inception Date 12/16/1985 21.31 -1.39 -2.70 3.51 10.86 02/28/2011
FID SEL ENERGY
Inception Date 07/14/1981 38.95 -1.39 7.94 11.80 10.19 02/28/2011
FID SEL HEALTHCARE
Inception Date 07/14/1981 22.86 7.31 5.32 4.29 15.31 02/28/2011
FID SEL TECHNOLOGY
Inception Date 07/14/1981 41.71 15.49 9.49 4.08 12.62 02/28/2011
FID SEL UTILITIES
Inception Date 12/10/1981 22.07 -1.68 3.78 2.02 11.12 02/28/2011
FID SEL FINANCIAL
Inception Date 12/10/1981 6.21 -8.04 -8.00 -0.76 11.74 02/28/2011
FID SEL BROKERAGE
Inception Date 07/29/1985 15.03 -0.39 -0.83 5.40 11.51 02/28/2011
FID SEL TELECOMM
Inception Date 07/29/1985 27.24 5.07 3.80 1.23 10.55 02/28/2011
FID REAL ESTATE INVS
Inception Date 11/17/1986 39.34 5.72 2.06 11.37 10.46 02/28/2011
FID TELECOM & UTIL
Inception Date 11/27/1987 26.61 0.41 3.51 2.50 8.66 02/28/2011
FID SEL MED EQ & SYS
Inception Date 04/28/1998 17.12 7.73 8.26 9.55 13.10 02/28/2011
FID SEL MULTIMEDIA
Inception Date 06/30/1986 39.37 11.93 6.55 5.79 12.28 02/28/2011
FID SEL MEDICAL DEL
Inception Date 06/30/1986 24.65 7.26 3.90 10.61 11.59 02/28/2011
FID SEL BANKING
Inception Date 06/30/1986 13.83 -3.55 -6.72 -0.01 9.72 02/28/2011
FID SEL MATERIALS
Inception Date 09/29/1986 35.70 8.33 12.73 14.81 10.87 02/28/2011
FID SEL NATURAL GAS
Inception Date 04/21/1993 17.58 -8.37 3.25 8.47 10.36 02/28/2011
FID SEL NATURAL RES
Inception Date 03/03/1997 42.09 0.82 10.82 12.91 12.56 02/28/2011
FID SEL ENV ALT ENGY
Inception Date 06/29/1989 28.96 3.34 2.49 4.22 3.78 02/28/2011
FID SEL COMM EQUIP
Inception Date 06/29/1990 42.38 15.19 6.58 2.22 11.73 02/28/2011
FID SEL PHARMACEUTCL
Inception Date 06/18/2001 19.68 8.85 7.21 N/A 4.10 02/28/2011
FID REAL ESTATE INC
Inception Date 02/04/2003 20.74 8.63 5.10 N/A 7.62 02/28/2011
FID SEL WIRELESS
Inception Date 09/21/2000 29.55 5.89 5.50 2.69 -0.57 02/28/2011

FID GLB COMDTY STK
Inception Date 03/25/2009 30.95 N/A N/A N/A 37.39 02/28/2011
Blended Investments*
Asset Allocation
CALVERT BALANCED A
Inception Date 10/21/1982 14.01 2.00 2.10 2.41 7.77 02/28/2011
FID ASSET MGR 50%
Inception Date 12/28/1988 17.15 5.23 4.72 4.12 8.62 02/28/2011
FID ASSET MGR 70%
Inception Date 12/30/1991 21.19 4.62 4.15 3.49 7.99 02/28/2011
FID ASSET MGR 20%
Inception Date 10/01/1992 9.88 4.94 4.58 5.21 6.71 02/28/2011
FID ASSET MGR 85%
Inception Date 09/24/1999 23.42 4.23 4.16 2.73 4.70 02/28/2011
FID FREEDOM INCOME
Inception Date 10/17/1996 8.73 4.08 4.26 3.96 5.29 02/28/2011
FID FREEDOM 2000
Inception Date 10/17/1996 9.18 3.75 4.10 3.84 5.92 02/28/2011
FID FREEDOM 2010
Inception Date 10/17/1996 15.39 3.76 4.31 4.40 6.94 02/28/2011
FID FREEDOM 2020
Inception Date 10/17/1996 17.72 2.90 3.79 4.15 7.02 02/28/2011
FID FREEDOM 2030
Inception Date 10/17/1996 20.05 2.01 3.16 3.73 6.69 02/28/2011
FID FREEDOM 2040
Inception Date 09/06/2000 21.32 1.76 2.95 3.52 1.47 02/28/2011
FID FREEDOM 2005
Inception Date 11/06/2003 13.66 3.34 3.99 N/A 5.13 02/28/2011
FID FREEDOM 2015
Inception Date 11/06/2003 15.64 3.52 4.15 N/A 5.79 02/28/2011
FID FREEDOM 2025
Inception Date 11/06/2003 19.32 3.01 3.79 N/A 6.06 02/28/2011
FID FREEDOM 2035
Inception Date 11/06/2003 21.22 2.05 3.14 N/A 5.95 02/28/2011
FID STRAT DIV & INC
Inception Date 12/23/2003 19.50 1.07 1.87 N/A 5.36 02/28/2011
FID FREEDOM 2045
Inception Date 06/01/2006 21.79 1.78 N/A N/A 2.98 02/28/2011
FID FREEDOM 2050
Inception Date 06/01/2006 22.21 1.32 N/A N/A 2.63 02/28/2011
FID ASSET MGR 30%
Inception Date 10/09/2007 12.38 4.94 N/A N/A 3.04 02/28/2011
FID ASSET MGR 40%
Inception Date 10/09/2007 14.57 4.99 N/A N/A 2.53 02/28/2011
FID ASSET MGR 60%
Inception Date 10/09/2007 18.69 5.39 N/A N/A 1.69 02/28/2011
FID DYNAMIC STRAT
Inception Date 10/31/2007 18.64 4.11 N/A N/A 1.61 02/28/2011
Balanced
FID PURITAN
Inception Date 04/16/1947 18.85 4.48 4.92 5.24 11.16 02/28/2011
FID BALANCED
Inception Date 11/06/1986 18.25 3.29 4.17 6.38 9.35 02/28/2011
FID GLOBAL BALANCED
Inception Date 02/01/1993 19.50 4.79 6.78 7.51 8.58 02/28/2011
FID STRAT REAL RET
Inception Date 09/07/2005 17.29 3.43 4.75 N/A 4.48 02/28/2011
Convertibles
FID CONVERTIBLE SEC
Inception Date 01/05/1987 27.23 4.90 7.10 6.80 11.66 02/28/2011
Bond Investments
Long Government
SPTN LT TR IDX INV
Inception Date 12/20/2005 5.50 4.08 5.35 N/A 5.33 02/28/2011
Intermed Government
FID GNMA
Inception Date 11/08/1985 5.51 6.40 6.37 5.52 7.11 02/28/2011
FID MORTGAGE SEC
Inception Date 12/31/1984 5.62 5.93 4.36 4.76 7.26 02/28/2011
FIDELITY GOVT INCOME
Inception Date 04/04/1979 3.27 4.61 5.66 5.21 8.00 02/28/2011
FID INTM GOVT INCOME
Inception Date 05/02/1988 3.13 3.99 5.39 4.84 6.12 02/28/2011
FID INFLAT PROT BOND
Inception Date 06/26/2002 6.50 2.91 4.60 N/A 5.64 02/28/2011
SPTN INT TR IDX INV
Inception Date 12/20/2005 5.64 4.58 6.37 N/A 6.09 02/28/2011
Short Government
FID INST SH INT GOVT
Inception Date 11/10/1986 2.12 3.34 4.75 4.22 5.86 02/28/2011
SPTN ST TR IDX INV
Inception Date 12/20/2005 2.26 2.84 4.67 N/A 4.53 02/28/2011
Long-Term
FID CORPORATE BOND
Inception Date 05/04/2010 N/A N/A N/A N/A N/A N/A
Intermediate-Term
CALVERT BOND A
Inception Date 08/24/1987 4.94 3.76 4.59 5.45 6.97 02/28/2011
FID INVST GR BD
Inception Date 08/06/1971 7.09 5.41 4.78 5.13 7.47 02/28/2011
FID INTERMED BOND
Inception Date 05/23/1975 6.04 5.61 5.29 5.16 8.02 02/28/2011
FID US BD INDEX
Inception Date 03/08/1990 4.88 5.01 5.23 5.38 6.97 02/28/2011
FID TOTAL BOND
Inception Date 10/15/2002 7.61 7.01 6.22 N/A 5.83 02/28/2011
Short-Term
FID SHORT TERM BOND
Inception Date 09/15/1986 2.95 2.29 2.66 3.33 5.17 02/28/2011
Ultrashort
FID ULTRASHORT BOND
Inception Date 08/29/2002 0.94 -0.91 -1.37 N/A 0.10 02/28/2011
High-Yield
FID CAPITAL & INCOME
Inception Date 11/01/1977 21.92 14.32 10.54 9.39 10.59 02/28/2011
FID HIGH INCOME
Inception Date 08/29/1990 16.60 11.60 8.60 7.05 9.70 02/28/2011
FID FLOAT RT HI INC
Inception Date 08/16/2000 8.18 6.93 4.91 4.60 4.68 02/28/2011
FID FOCUSED HIGH INC
Inception Date 09/08/2004 14.33 7.92 6.38 N/A 6.23 02/28/2011
Multisector
FID STRATEGIC INCOME
Inception Date 05/01/1998 11.16 9.17 8.04 8.41 7.68 02/28/2011
Emerging Markets
FID NEW MARKETS INC
Inception Date 05/04/1993 8.98 9.18 8.01 11.39 12.10 02/28/2011

FID CONSV INC BD
Inception Date 03/03/2011 N/A N/A N/A N/A N/A N/A
Short-Term Investments
CALVERT MONEY MKT A
Inception Date 10/21/1982
7 day yield as of
02/28/2011 0.01% 0.01 0.81 2.24 1.91 4.57 02/28/2011
FID US GOVT RES
Inception Date 11/03/1981
7 day yield as of
02/28/2011 0.01% 0.02 0.73 2.36 2.22 4.95 02/28/2011
FID CASH RESRVE
Inception Date 05/10/1979
7 day yield as of
02/28/2011 0.01% 0.05 0.95 2.52 2.28 5.83 02/28/2011
FID SEL MONEY MARKET
Inception Date 08/30/1985
7 day yield as of
02/28/2011 0.05% 0.12 1.02 2.59 2.32 4.33 02/28/2011
FID US TREA MM
Inception Date 01/05/1988
7 day yield as of
02/28/2011 0.01% 0.01 0.36 1.93 1.89 3.85 02/28/2011
FID MONEY MARKET
Inception Date 01/23/1989
7 day yield as of
02/28/2011 0.01% 0.03 0.95 2.53 2.29 4.12 02/28/2011
FID GOVT MMKT
Inception Date 02/05/1990
7 day yield as of
02/28/2011 0.01% 0.01 0.67 2.30 2.15 3.73 02/28/2011
FID RETIRE MMKT
Inception Date 12/02/1988
7 day yield as of
02/28/2011 0.01% 0.02 0.96 2.55 2.29 4.10 02/28/2011
FID RET GOVT MM
Inception Date 12/16/1988
7 day yield as of
02/28/2011 0.01% 0.01 0.68 2.32 2.16 3.99 02/28/2011
Other Investments
BROKERAGELINK N/A N/A N/A N/A N/A N/A

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Author: MajorMajor78 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68668 of 75538
Subject: Re: 403 v 457 Date: 3/21/2011 1:18 PM
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I was looking over those UC Pathway funds and was pleasantly impressed. Very low expense ratios for a target date funds and good solid underlying fund investments. The only thing that raised my eyebrow was the line "Investments 1 YR 3 YR 5 YR 10 YR Life As of Date" which appeared just above the listing of the UC plan options. Is this implying an annuity? If so, are there seperate insurance fees on top of the low expense ratio listed? I was just a little confused by their choice of words. If there isn't any insurance issues attached I would have no problem recommending these funds to anybody who wants a simple fire and forget retirement investment option.

If you decide to take a DIY approach there are good options in the Fidelity listing that my wife actually uses in her 401K. Look at the Fidelity Spartan plans. Very low expenses (competitive with Vanguard). The SPTN TOT MKT IDX INV is a great total market index fund. SPTN LT TR IDX INV or SPTN INT TR IDX INV are great U.S government bond indexes that have low expenses. FID TOTAL BOND is another good bond choice that is a mix of government and corporate bonds for a respectable expense ratio.

Maybe you would want 50% SPTN TOT MKT IDX INV and another 50% of the bond fund(s) of your Choice? This would give your husband "his age in bonds" and would provide a solid no nonsense retirement portfolio. Adjust to be more or less agressive as you see fit of course but this would be a great foundation to start your planning around.

Hope this helps,

Scott

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68671 of 75538
Subject: Re: 403 v 457 Date: 3/21/2011 2:31 PM
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Okay, I'm not sure I understand everything, but this is what I think you're saying: Since we both have IRAs at Vanguard, we can contribute to those and not worry about the 403 or 457. However, since our IRAs are Roths, eventhough we have full control over them, we're not getting the tax benefit (yearly deductions for investment) that we would get with traditional IRAs.

Yes.
With a Roth, you're betting that your marginal tax rate in retirement will be at least what it is now. Also, with a Roth you are NOT required to begin minimum distributions at age 70.5. This would be an important factor to someone who has a lot saved for retirement and/or a generous pension + Social Security and feels they may not need to make withdrawals and would rather use their Roth as a savings plan for an inheritance to their children/grandchildren. But if you need the tax break now, the deductible traditional IRA would likely be a better choice.

My understanding, also, is that the 401a as I see it on the website, is the only thing with money in it right now, and until I talk to his HR person, I can assume that his employer is investing into that account right now, and that since it's at Fidelity, we should be able to move it from 'short term funds' to some sort of index fund or whatever, but it really doesn't matter which plan it is in at this point. However, we would want to move it into a better fund.

Sounds like a plan.
As the previous poster pointed out, allocating between a Fido low cost bond fund and equity fund...or even to chose a target date fund (the 'Freedom' funds) corresponding with your reirement date, might be a good choice. And hopefully this employer provided "401(a)" plan is not within a "tax sheltered annuity' wrapper...which if it is, will typically add another 1% in expenses each year, which would essentially rob you of about 15% or so of your future investment earnings (1% out of an average of 7% investment return). But since your husband is not paying into this, what it is is what it is.

So, I'm guessing that I just need to figure out,
1. Does the university invest in any of these available plans?
2. Do they match more or less for one plan or the other?
3. Are all of these funds available to all the plans?
4. (Anything I'm missing?)


I assume you're speaking of contributing to a 403(b)? If so, and if there is not employer matching, I think I'd stick with maxing out contributions to deductible TIRAs. If there is a matech, I think I'd only contribute to the 403(b) to the extent of the match.

And then I pretty much have to decide which plan to 'enroll' in, so I can change the fund, but it may not make that much of a difference because anything we have we invest in our Roths, *unless* I find out that the university matches, and then we should be investing in there first. (Have I got that all right?)

Yep.

Thanks so much for your input. (And for your good wishes about my FIL. We're not out of the woods, but very relieved.) :)

Caat


Glad to offer assistance :-)

BruceM

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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68675 of 75538
Subject: Re: 403 v 457 Date: 3/21/2011 7:58 PM
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With a Roth, you're betting that your marginal tax rate in retirement will be at least what it is now.

Based on personal experience, this is a **really** good bet.

In late December we did a really hefty rollover/conversion from our IRAs to our Roths, in order to fill up to the top of the 15% bracket.

By being clever (thanks internet posters!) we moved a bunch of money and have been able to max out our 15% bracket for 2010, 2011 & 2012. Better yet, since we paid the taxes with other money, 100% of the IRA money get into the Roth, instead of only 85% of it. So that was kind of a sneaky way to effectively put another $10K into the Roths--even though we are retired and so can't contribute to a Roth.

Now, if only the market co-operates and grows. ;-)

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68676 of 75538
Subject: Re: 403 v 457 Date: 3/21/2011 9:38 PM
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With a Roth, you're betting that your marginal tax rate in retirement will be at least what it is now.

Based on personal experience, this is a **really** good bet.

Based on my personal experience, I'd disagree. There is a very wide distribution of incomes (or expected incomes) in retirement. You need to look at the individual situation to make a recommendation about Roth vs. traditional IRA/401k.

--Peter <== talks to 300+ people per year about their personal finances

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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68679 of 75538
Subject: Re: 403 v 457 Date: 3/21/2011 10:24 PM
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Based on my personal experience, I'd disagree. There is a very wide distribution of incomes (or expected incomes) in retirement. You need to look at the individual situation to make a recommendation about Roth vs. traditional IRA/401k.

--Peter <== talks to 300+ people per year about their personal finances


Well, sure, there would certainly be a lot of unique individual situations.

But I'm surprised at what you say. As far as I can tell, we are much better set than most of our (also retired) friends & neighbors, w/r/t taxable income. Which is one pension & 2 SS's, and one of our SS benefits is significantly higher than the average benefit (acorrding to the SSA).
We started all three early (before FRA), so the benefits are all reduced.

And absent the IRA-to-Roth rollovers, our income is well below the $68K that's the max for the 15% bracket.

We do have a mortgage (which most of our neighbors don't), so we get that small deduction, and we have a large cap-loss carryover, so we get that $3000/yr deduction. But still.....

Ahhhh, but maybe you are talking about non-joint filers?

For M.F.J.: 15% bracket tops off at $68K taxable income. With the standard deductions and all that's probably around $80,000+ total income. I have a hard time believing that lots of retirees have that much AGI income.

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68680 of 75538
Subject: Re: 403 v 457 Date: 3/22/2011 12:18 AM
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ptheland:

<<<With a Roth, you're betting that your marginal tax rate in retirement will be at least what it is now.>>>

Ray: {{{Based on personal experience, this is a **really** good bet.}}}

Peter: <<<Based on my personal experience, I'd disagree. There is a very wide distribution of incomes (or expected incomes) in retirement. You need to look at the individual situation to make a recommendation about Roth vs. traditional IRA/401k.>>>

Ray: "But I'm surprised at what you say. As far as I can tell, we are much better set than most of our (also retired) friends & neighbors, w/r/t taxable income. Which is one pension & 2 SS's, and one of our SS benefits is significantly higher than the average benefit (acorrding to the SSA).

We started all three early (before FRA), so the benefits are all reduced.

And absent the IRA-to-Roth rollovers, our income is well below the $68K that's the max for the 15% bracket.

We do have a mortgage (which most of our neighbors don't), so we get that small deduction, and we have a large cap-loss carryover, so we get that $3000/yr deduction. But still.....

Ahhhh, but maybe you are talking about non-joint filers?"


I think that you and peter are talking past one another. Your last post is making peter's point for him.

Why make a Roth contribution (and pay taxes) when in a higher bracket while working? The traditional contribution, assuming deductibility, is worth when in a higher bracket while working than the tax rate that will be paid on withdrawals at retiremet.

Regards, JAFO

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