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My wife (44 yrs) changed jobs 7/97. She has a 403(b) (#1) that we have socked the maximum amount in for the past 4.5 years. This was non-contributory by employer. We have seen a 37.7% net gain on this account in that time. However, fees are running $15/year admininstrative per fund and 1.75% for mortality, expense and management. There is a declining 5% deferred sales charge for 5 years on contributions, not appreciation.

When she started the new job she began a new 403(b)(#2) with a different carrier. This is also non-employer contributory with $15/year administration and 1.5% for mortality, expense and management. There is a declining 5% deferred sales charge for 10 years on all surrendered amounts. Two months into the new program the carrier removed every fund we had selected and replaced them with brand new funds, i.e. no history or earnings performance. The remaining choices have long-term bond fund rates of return. We stopped contributing to this fund at year-end 97. She remains employed there and expects to retire in 10 years.

We have learned today that her employer will allow any 403(b) program we want to set up including the previous carrier or a 403(b)7 option. We have current Vanguard IRAs that will accept a 403(b)7.

I am self-employed (50 yrs) expecting to retire in 10 years. We are socking the max allowed into a SEP-IRA for me every year. Our modified adjusted taxable is above $100K so I don't see a Roth as an option.

1. Want do you recommend for the 403(b) from the previous employer? I am leaning toward creating a self-directed IRA with the Fools Portfolio as a model.

2. Do you recommend using the 403(b)7 option with the current employer? If yes any recommends on a particular mutual house? My instinct there is to put it in Vanguard between the 500 index and Primecap funds.

3. Can we use a 90-24 Transfer to roll the newer 403(b) (#2) contributions into a newer 403(b)7 program that we setup now? The #2 balance is only about $3.5K so the 5% penalty is fairly negligle.

4. Do we face anything unforeseen with her 403(b) and my SEP/IRA filing jointly?

Thanks for the help and sorry for the length!
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