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Have been giving $300.00 a month since 1984 to Great American Insurance Co. for an annuity. I was wondering if stopping the donation to Great American, and sending the same $300 to a no-load Mutual fund, might be a good idea?....House will be paid off in OCT 2001, No car payments, No Credit Card payments.

Situation arises where the Human Resources at the School District (TEACHER), only allows certain companys that they will send money. Great American and other insurance companys. When I mentioned to human resources, that I was considering a NO LOAD mutual fund, they said FIDELITY was a NO LOAD....is that a good choice, because the investment fella at the credit union, had us signed up for MFS, with a 5.75% load...Still trying to gather my information., on what to do with the $300..., Thanks
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If one is a teacher, one may use a 403-B to build a deferred retirement account. My institution voted to accept Fidelity about twenty years ago and Fidelity waived the low-load commission and charged no commission. I selected from Morningstar several 5 star funds and put my $300 in them for many years. They have compounded in excess of 15% over twenty years. I also used an insurance annuity since that was the only option thirty years ago. I later rolled that into an investment company since insurance companies charge 12B commissions on investments. Mutual funds work out as retirement instruments since they distribute each year their unrealized capital gains but are punishing as nondeferred instruments.
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My wife worked at a hospital which offered a limited selection of insurance companies and fund families within its 403b envelope.

The awsome thing about 403b's vs. 401's is the portability of the medium. For example, one can have company x deduct the $ from your pay and have it put into their NO-LOAD money market fund.

From there, it is allowable and simple to transfer (institution to institution) that money into a 403b7 at any other outfit that offers such (many do, including Vanguard). We did this with regularity and good results. (BTW - this is not a tax event)

Maybe someone out there knows if there is such a thing as a self-directed 403b7 at a discount broker? Pixy?

Lotsa luck, have fun!
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You probably need to post ALL your investment choices. Fidelity has LOTS of funds; some are no-load, low-load (3%) and some are higher. MFS is also a good company, but they also have lots of funds.

Regarding annuities, I don't know much about 403b choices, but I stay away from annuities because of the much higher fees.

Zev
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Greetings, Microman2, and welcome. You wrote:

Have been giving $300.00 a month since 1984 to Great American Insurance Co. for an annuity. I was wondering if stopping the donation to Great American, and sending the same $300 to a no-load Mutual fund, might be a good idea?....House will be paid off in OCT 2001, No car payments, No Credit Card payments.

Situation arises where the Human Resources at the School District (TEACHER), only allows certain companys that they will send money. Great American and other insurance companys. When I mentioned to human resources, that I was considering a NO LOAD mutual fund, they said FIDELITY was a NO LOAD....is that a good choice, because the investment fella at the credit union, had us signed up for MFS, with a 5.75% load...Still trying to gather my information., on what to do with the $300..., Thanks


I'd say the fella at your credit union wasn't doing you much of a favor. A 5.75% load in a mutual fund these days is way out of line. Sounds like he was more interested in earning the commission than in helping you grow your money.

You don't say so, but I get the impression you're currently investing in the annuity through a 403b plan available at a teaching job. If so, you can probably do better using the same monthly $300 in a no load S&P 500 index fund. Fidelity has one, but unfortunately I can't recall it's name. Perhaps your HR folks can help assuming it's available in their plan.

Regards….Pixy
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Kwaj4robbs asks:
Maybe someone out there knows if there is such a thing as a self-directed 403b7 at a discount broker? Pixy?

No, there's not. A 403b(7) account may be invested in mutual funds or annuities, but the trading in individual securities is not allowed.

Regards….Pixy

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