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Subject:  Re: 403B Fees Date:  12/5/1998  11:08 AM
Author:  TMFPixy Number:  7038 of 88775

Ataloss writes:

<<I am glad to see that someone else has dealt with such a horrible system. My wife's former employer had a similar arrangement for their 403b but the only choices were insurance company TSA annuity accounts. She invested in an Aetna annuity that was supposed to be investing in Twentieth Century's Growth fund. No matter how much 20th Century Growth goes up, her annuity account shows essentially no growth. She stopped working there but felt sort of trapped by the fee for terminating the annuity. We have since realized that paying Aetna 5% to go away is a relative bargain compared to sticking with a massively underperforming investment.

My bias is that in general annuities are horrible investments. In a tax sheltered account where you are getting no tax benefit they are worse.>>

An expensive education, but one worth the price if you're now able to take advantage of more productive investments. Annuities may be appropriate for some, but they are definitely not the instrument to use for the serious investor. The tax shelter provided just isn't worth it to the average income person. I share your bias in spades.


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