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Author: Dodgeball Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Re: 403B Date: 12/31/1999 4:45 PM
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PP:

Oh, you bet. I definitley have a problem with 403b's offering variable annuities. It is important for Ron to understand that he can purchase a variable annuity with pre-tax dollars outside of a 403b. Be sure to make this clear to him.

And don't forget to tell him that he may be able to invest in a 403b(7) with Vanguard, which will allow him to bypass the salesman and put all of his money to work for him right away. As you know, Vanguard has some of the lowest fees in the mutual fund industry.

It would also be helpful to let Ron know that many 403b(7)'s offer loan provisions. However, would it be in his best interest to take a loan from his 403b? As you know, it is very important that one leave their retirement money alone and not touch in until they retire.

PP, you and I have debated this issue before in other posts. How about telling Ron to do his own research and decide what's best for him? Ron, be sure to ask the person selling you the 403b/variable annuity what percentage of your money will actually be invested. Also, please understand that a variable annuity is really nothing more than a life insurance product.

Here's the best advice we can provide Ron: do your own homework and make sure you understand fully what you are getting into. Don't take my, or anyone else's advice. Please be aware that a fee-only financial planner (one who is not profitting off of a sale of a product)may be able to provide him with other avenues.

Ron, if after doing your research you decide to invest in a variable annuity inside of a 403b plan, then you truly have made a Foolish decision.

Dave
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