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My husband and I are both teachers. Ten years ago we were advised to put our money into a tax shelter that is designed for teachers. After about 8 years, we borrowed on the money to purchase our first home. We are now paying that back (at about 6% of which 4% goes back to us). The problem is that the shelter only yields about 5% annually which is terrible! We have met with a few other planners who say we should be in a mutual fund. This sounds better but no one seems to know what our options are since we still owe... what we should do etc

We are so confused. We have one "expert" who wants us to allow him to place the money... he is the one that got us in at 5%! The other does not know what the choices are for us and we have to do the leg work. Ugh!! This is so overwhelming!
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My husband and I are both teachers. Ten years ago we were advised to put our money into a tax shelter that is designed for teachers.

Can you be a little more specific? When you say "tax shelter" I assume you are talking about a vehicle that permits tax deferred growth of your principal. Since you are teachers, I assume you are talking about an annuity of some type. Since you implied that you are getting a fixed rate of return (although maybe I read too much into your statement) I assume you are in a fixed annuity. What is the name of the vehicle? Is it part of a 403B (also known as a "salary reduction") plan through your employer or is it something you got into independent of your employer? Are there investment choices (subaccounts") within this vehicle other than the one you are in? Do you know if there is a back end load and, if so, for how many years? The answers to these questions will help folks on this board respond to your questions.

jtmitch
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Thanks for responding. This is what I do know... My money is in Great American Life an my husband's is with a similar insurance company, the account has nothing to do with the school district. It is a Ttax sheltered annuity and I have never heard of sub accounts. I also have no idea what a back end load is! We are really naive here. Again, we don't even know what we don't know... I am determined to figure this out though.
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slykahn,

Sounds like you are invested in an annuity. A simple way to make sure is to call the person who sold it to you and ask "Is this a tax-defered annuity?" Since it is with an insurance company, I am pretty certain that it is.

Rather than write a bunch of drivel, you can read what the Fool has written about annuities:
http://www.fool.com/retirement/annuities/annuities01.htm?ref=RTRannu

It also sounds like you are in a 403b. It is much like a 401k, but there are different rules and most people get stuck with an annuity. Your investment choices in a 403b can, however, be made according the Foolish principals given for 401k's:
http://www.fool.com/money/401k/401k.htm

To understand the 403b better, you can start with this excellent article by the Fool:
http://www.fool.com/specials/2000/sp001016.htm

A good site outside of the Fool is here:
http://www.403bwise.com/
In the upper right hand corner you will see "Newbies, Start Here". It's a great place to start!

Read up on some of this stuff, and I think it will help you tremendously when asking questions either to your financial advisor or on the boards. Come back when you have more questions.

Hope this helps,

Taylor
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slykahn --


Everything tmackfool says is right on. Since you are a teacher, you realize the value of doing homework. :)
When you have done a little by following those links please come back and I am sure you can get your questions answered.

jtmitch
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