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Author: WaggleTail One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: 403b NOT in annuities? Date: 3/30/2000 10:58 AM
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Does anyone out there have a 403b plan that offers something OTHER than annuities? Just curious.

WaggleTail
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Author: JABoa Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20778 of 76397
Subject: Re: 403b NOT in annuities? Date: 3/30/2000 11:25 AM
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If my notoriously bad memory serves, you're in CREF. Go to www.tiaa-cref.org, then to Retirement Plans, then to Income Options. You can take out cash in dribs and drabs, but there are tax penalties probably.

TIAA-CREF wants you to take your money out as an annuity because that stabilizes their cash flow. That's why the cash payout option is submerged and derided. But it's there.

However, given that you are just 33 (my memory isn't that bad), it really shouldn't matter for at least 20 years.

Cheers,
JABoa

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Author: WaggleTail One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20786 of 76397
Subject: Re: 403b NOT in annuities? Date: 3/30/2000 12:51 PM
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Actually, my query was a more general one. From what I found about 403(b)s on the VALIC site, 403(b) accounts are legally limited to either annuities or custodial accounts that hold mutual funds only (there's one other provision for churches that I don't remember). However, from my limited experience, it seems that the latter option is rarely offered, at least to people employed by educational institutions. So I was wondering if anyone out there had an employer that offered 403(b)s with custodial accounts with mutual funds, instead of just annuity funds (for example, my employer offers about 50 funds with 6 different carriers, but they are ALL annuity funds).

And JABoa, your memory is excellent regarding my age and my CREF account :-)

WaggleTail

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Author: dweiss3 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20787 of 76397
Subject: Re: 403b NOT in annuities? Date: 3/30/2000 1:07 PM
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My wife's school system in Maryland has about 20 different custodians authorized for their 403(b) plan. Many are insurance companies that offer only annuities but the list also includes T. R. Price. My wife's 403(b) salary deferrals go directly into 4 no load T.R. Price mutual funds (Blue chip growth, Science and Tech, Mid Cap growth and 500 Index). The setup was fast and easy. The account status is available on-line at the TRP web site. She can transfer $'s between TRP funds on-line as well.


dave




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Author: xnocturnal One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20788 of 76397
Subject: Re: 403b NOT in annuities? Date: 3/30/2000 1:12 PM
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Hi Waggle Tail,

my sister's employer - nonprofit hospital, has 403(b)7
plan with mutual fund company and not with insurance company. I believe they have it with Janus Funds, yearly custodial fee $12.

I wish I was as lucky. My employer has 403(b) with lousy annuity, no company match, $30. yearly fee, expense ratios 1.75% for money market subaccount,
2.45% for equity subaccount, 8% surrender charge
that declines to 0 over 10 years!!!!

Aren't some annuities grand?!!!!

Regards,
xnocturnal

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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20799 of 76397
Subject: Re: 403b NOT in annuities? Date: 3/30/2000 10:36 PM
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Christina -

You asked: "Does anyone out there have a 403b plan that offers something OTHER than annuities?"

Sure! How about a 403b(7) plan using mutual funds?

Not as common, but can be done...

PP



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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20800 of 76397
Subject: Re: 403b NOT in annuities? Date: 3/30/2000 10:44 PM
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Yes! Some annuities ARE grand!

Why don't you explore options that will allow you to make partial transfers to a better 403b/TSA or 403b(7) account (using Revenue Ruling 90-24)? This way you'd be able to improve your performance on at least some of your money...

PP

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Author: lectic One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20808 of 76397
Subject: Re: 403b NOT in annuities? Date: 3/30/2000 11:26 PM
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Why is it that 403(b) plans are loaded with annuities with all their problems whereas the rest of the tax deferred world offers better choices? Is this a case where the tax exempt orgs have simply sold out to annuity / insurance company crap. Private industry, where the management participates in the plans and available investments, would not tolerate that nonsense. It's time for the employees of the tax empts to get up on their two hind legs and bargain for better tax deferred alternatives. This is a no brainer since it won't cost the employer any more money to offer decent alternatives. Get those union reps off their fat duffs and have them do something useful.

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Author: WaggleTail One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20816 of 76397
Subject: Re: 403b NOT in annuities? Date: 3/31/2000 9:11 AM
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I actually inquired about the possibility of getting a 403b(7) option at the university where I work, but apparently I'd have to push for it at the state level, since it's a piblic university and I am therefore a state employee. I don't think I'm up for dealing with state bureauocrats!

Yes! Some annuities ARE grand!

Really?! You're not just saying that to make me feel better? Because the general sentiment on the Fool is that annuities are the spawn of the devil, which makes those of us who have no alternatives (especially regarding mandatory contributions and employer matches) feel like we're doing something really stupid.

WaggleTail

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Author: ez2bhard Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20864 of 76397
Subject: Re: 403b NOT in annuities? Date: 4/1/2000 10:50 AM
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Waggletail,

Like with any debate, there are extreme views, and truth, lay somewhere in the middle.

My problem isn't so much with exempt orgs who have opted for annuities, although there are clearly better choices. I've seen some pretty crummy private employer 401k plans too.

My problem is with financial advisors, who steer unsuspecting individuals into annuities when they would
be better served by other choices. In my mind, there's no excuse for taking a large 401k distribution or selling a large amount of stock and dumping it into an annuity. But you see it happen all the time.

ez

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Author: DoktorDi Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20991 of 76397
Subject: Re: 403b NOT in annuities? Date: 4/6/2000 2:38 PM
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<<TIAA-CREF wants you to take your money out as an annuity because that stabilizes their cash flow. That's why the cash payout option is submerged and derided. But it's there.>>

It may be there, but they make your life miserable for suggesting rollover, give you as little help as possible to do it, and spread it out over 10 yr period. Oh yes, did I forget to warn you that if you ask for rollover (TPA), you can't take IPRO on the part set aside to be rolled over during that 10 yrs?



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Author: rickisme Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20994 of 76397
Subject: Re: 403b NOT in annuities? Date: 4/6/2000 3:34 PM
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Just some ramblings about TIAA/CREF that may or may not address your question.

I have a 403(b) at TIAA/CREF. I no longer work at a university because I stay at home and play on my computer buying and selling things they call securities. ;-) Given that I did not like the limited choices that they offer, I started a campaign to learn how I could transer the money accumulated to a self-directed IRA, in which I could buy and sell individual stocks and not be limited to the "funds" offered by TIAA/CREF. I discovered some interesting things. First, one can transfer tax free from the CREF account immediately to an IRA if the former university allows it. Three out of the four universities where I was employed allowed me to do this. The other has a policy that no funds can be withdrawn or transferred until the individual reaches age 59and1/2.(They are trying to protect us from ourselves). The only way one can transfer the portion in TIAA is over a ten-year period. What is not good about this option is that the Infernal Revenue Service(aka IRS) will not consider this a nontaxable IRA transfer because of the ten-year period over which the payments are made. In other words, if you take your 10% out, you not only have to include this amount in your income(unless there were contributions made by you after leaving academia, in which case this portion would not be taxable) but you also must pay a 10% penalty. I recently decided to do this because I think I can do much better(even after taxes and penalties)by investing the way I want to invest.(I don't recommend this option to anyone)

There is also another type of account that you can contribute to in the same way that you contribute to the regular annuity. It's called the SRA(Supplemental Retirement Annuity). I'm not certain that all colleges offer this option but I think they can do if you request. I am glad that I had 50% of my contributions going to the SRA because you don't need anyone's permission to transfer funds out of this. Needless to say I was very happy to be able to transfer 100% of ALL funds in my SRA without written permission from the universities. I would strongly recommend to anyone that is considering doing their own investing in other than mutual funds to go down to their human resources department and have them establish an SRA with TIAA/CREF. The only downside to this, in my view, is that the interest paid on money market funds is slightly less than what is paid from the regular annuity. Everything else is exactly the same as how you are now allocating your money.

Rick

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