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[Splitz]

I am an idiot when it comes to this stuff and I admit it so that is the first step in the healing process. This topic involves Retirement. I have specific questions about 403B and Roth IRA options.

Scenario:

My wife has worked in 3 different school districts due to us moving quite a bit the last few years. We are finally settled. At her first employer she had a 403B with AXA equitable. She contributed to this account for about 3 years and then we moved and she started at her second employer who didn't carry AXA equitable as an option. Since AXA charged a 20% withdrawal fee, we left that account alone. So now it sits there with nothing contributed to it anymore.

We then opened a new 403B with T.Rowe Price but unfortunately she only stayed at school number 2 for 1 year. Unlike AXA, T.Rowe let my wife roll over her contribution penalty free to employer number 3 for which we set up as a 403B with TIAA-CREF.

In summary: wife has 403b with AXA, no longer contributing and 403B with TIAA-Cref.


This summer the school district changed to a single provider option under a company called Great West. So now she is forced to go with this NEW company that we have no clue about in order to keep expanding on the contributions she was making to TIAA-CREF.


I suggested a ROTH IRA to avoid all this craziness every time there is a job switch. I don't trust this Great West place. Unfortunately the school district won't let her roll over the money unless she were terminated from the job. So if we start a ROTH, it will have to be from scratch. My wife is getting frustrated because she has two accounts now with a discouraging amount of money and it looks like she's going to have to start all over again.

My question is should we just take the 20% hit on the original AXA to convert to new Roth IRA we want to open? Or just let both the AXA and TIAA-CREF sit there stagnant and start from scratch AGAIN with this Roth IRA?


I realize that this is a very loaded question. My next step will be to contact a financial adviser but I know there are some really great minds on this site and thought I would give it a shot.

 

[Lee]

keep the money in the seperate accounts. The big thing with 403B (or 401k, simular but 403b's are for public school employee's) is that the employer matches up to a certain percent. The example is my employer matches 6% of my contributions dollar for dollar so i contribute 6% to take advantage. She needs to have a third account because it is silly to take a 20% hit on account you can leave alone and let grow (yes it will happen again when the economy turns around) and its silly not to take full advantage of her school's contribution to her retirement. Its no big deal, and personally I only check my 401k about once a month and only change the investments every quarter. What you have to remember about retirement planning is that its a marathon not a sprint and you guys are not even done with the first mile. Make sure you keep track of your accounts and dont forget about them entirely, but dont worry....collecting multiple retirement accounts is not a bad thing.

 

[Splitz]

keep the money in the seperate accounts. The big thing with 403B (or 401k, simular but 403b's are for public school employee's) is that the employer matches up to a certain percent. The example is my employer matches 6% of my contributions dollar for dollar so i contribute 6% to take advantage. She needs to have a third account because it is silly to take a 20% hit on account you can leave alone and let grow (yes it will happen again when the economy turns around) and its silly not to take full advantage of her school's contribution to her retirement. Its no big deal, and personally I only check my 401k about once a month and only change the investments every quarter. What you have to remember about retirement planning is that its a marathon not a sprint and you guys are not even done with the first mile. Make sure you keep track of your accounts and dont forget about them entirely, but dont worry....collecting multiple retirement accounts is not a bad thing.

Ok, that is a very helpful take on the situation. One thing I might add is that shockingly enough none of the 3 school districts that she has been employed by match the contribution. I guess even still it doesn't make much sense to take the 20% hit. Do you think the Roth IRA is a good idea?

 

[Lee]

Ok, that is a very helpful take on the situation. One thing I might add is that shockingly enough none of the 3 school districts that she has been employed by match the contribution. I guess even still it doesn't make much sense to take the 20% hit. Do you think the Roth IRA is a good idea?

Roths are always good, not much different than a non contributing 203b...kind of bull crap if you ask me they dont atleast match 3% for you.

 

[Splitz]

Roths are always good, not much different than a non contributing 203b...kind of bull crap if you ask me they dont atleast match 3% for you.

Yeah, the company I just started working for matches 4% but the wifey gets screwed over. I would rather just have a Roth so there is no concern about switching jobs and having 900 different accounts.

 

[Lee]

Yeah, the company I just started working for matches 4% but the wifey gets screwed over. I would rather just have a Roth so there is no concern about switching jobs and having 900 different accounts.

Thing about a roth is you dont get the tax savings until you pay your taxes, loosing out on the tax deferement. On the 403b, you get the tax benifits each paycheck....it might not be a huge difference, but its always to save now than later or earn your interest now instead of later.

 

[mixman]

roths are good, but dont ever take a 20% hit if you could avoid it. Also, if your wife's current school doesn't do matching and you don't like there plan then there's no real reason to use there plan. I'd take the money and throw it in a Roth. You take the tax hit now, but it saves you money when you retire.

 

[Haggstown]

For AXA, you might want to check again, as over time the penalty to withdraw those funds decreases. How long has it been since she last contributed to the AXA account?

As far as Great West goes....I'm in the financial planning world and work with Great West on some qualified plans - they do a pretty good job and would be a fine place to invest.

Regarding Roths - Roths can be very useful, especially the younger you are. Basically, you are taking the tax hit now and letting the money grow. When you start pulling the money out - the idea is that you have a very long/extended time for that money to invest and grow - it comes out tax free. So all the earnings (as far as the tax code is written now) come out tax free from a Roth.

Roth's would't be too beneficial for someone who has a short time frame to invest.

 

[Splitz]

For AXA, you might want to check again, as over time the penalty to withdraw those funds decreases. How long has it been since she last contributed to the AXA account?

As far as Great West goes....I'm in the financial planning world and work with Great West on some qualified plans - they do a pretty good job and would be a fine place to invest.

Regarding Roths - Roths can be very useful, especially the younger you are. Basically, you are taking the tax hit now and letting the money grow. When you start pulling the money out - the idea is that you have a very long/extended time for that money to invest and grow - it comes out tax free. So all the earnings (as far as the tax code is written now) come out tax free from a Roth.

Roth's would't be too beneficial for someone who has a short time frame to invest.

Last Contribution Date: 09/26/2006
At the time she started the second 403B AXA told her it was 20% to transfer it. T.Rowe let us do it for free. Do you know how much it would decrease if any in those 2+ years?

 

[Haggstown]

Not sure how much the decrease in a CDSC charge would be now after two years. You will need to contact AXA and ask them if they transfered/rolled that money out if there would be any charge and if so what would it be.

I know at other places, ala Nationwide (only because I'm working on a plan now that had previously used them), that the fee decreases year after year from the last time a deposit was made to the account - with no fee after 7 years. But during years 5 and 6, the fee wasn't too bad and small enough for some to take the hit and roll out.

 

[Cashius X]

Anyone have expertise in the Financial Services industry? I'm about to graduate from college this May and I currently have two job offers I am weighing from UBS and Bank of America - Merrill Edge.

Both positions entail me joining their respective financial advisor training programs. I'd be getting series 7 & 66 certified and giving financial/investment advice to both companies' respective existing client bases. UBS is right outside NYC while Bank of America is in my backyard being MD so I could live at home & save a lot of money.

Just generally interested in insight concerning both opportunities. I already kinda have my mind made up but still interested in hearing what some of you have to say about both opportunities. Also very interested in hearing about ways to really get the most value out of Series 7 & 66 licenses. I have a pretty expansive network & I feel as though with those licenses there is a way I could help the people in my network while standing to gain myself but I'm not sure how to go about doing it.

Any & all help is welcomed -- Thanks for reading

Edit: & also, what are some benefits to negotiate other than salary? Base salary is non-negotiable for both

 

[DJTJ]

I worked in Financial Services for a year because I have a degree in Financial Planning, but worked for a small firm who used a clearinghouse to handle trades.

I felt dirty when I came home. You'll learn really, really fast if you have the guts to sell people things that may or may not be what they need to make the sale. The network part, in reality, ends up being abused by a company because they expect easy sales to people close to you. I once was handed a yellow legal pad and asked to fill a page with people I know I could sell to... In an interview. If you have that ability, and you can go home and be okay with profiting off products that aren't always what people need? It's incredibly lucrative. Go you.

The exams, if you get the training, are easy. Without studying, scored mid 60s on series 7. Left soon after, work in insurance, and love it.

 

[Zog]

Anyone have expertise in the Financial Services industry? I'm about to graduate from college this May and I currently have two job offers I am weighing from UBS and Bank of America - Merrill Edge.

Both positions entail me joining their respective financial advisor training programs. I'd be getting series 7 & 66 certified and giving financial/investment advice to both companies' respective existing client bases. UBS is right outside NYC while Bank of America is in my backyard being MD so I could live at home & save a lot of money.

Just generally interested in insight concerning both opportunities. I already kinda have my mind made up but still interested in hearing what some of you have to say about both opportunities. Also very interested in hearing about ways to really get the most value out of Series 7 & 66 licenses. I have a pretty expansive network & I feel as though with those licenses there is a way I could help the people in my network while standing to gain myself but I'm not sure how to go about doing it.

Any & all help is welcomed -- Thanks for reading

Edit: & also, what are some benefits to negotiate other than salary? Base salary is non-negotiable for both

Depending on your school debt, I'd say go for the cheaper COL. Though I do know someone who moved to NYC and absolutely loves it... it might be worth the experience if you aren't worried about buying a house/condo anytime soon.

Can you negotiate amount of vacation?

Whatever you negotiate, make sure it is in writing before you sign anything.

 

[Kbiz]

Hey all...figured i'd ask for some advice since i just recently received a decent chunk of change ($6,200) from my grandmother's estate sale. I currently have no debt but also have little money saved in any formal sort of way. I always keep my bank account above a certain number (basically acts as my rainy day fund equalizer) but have no formal savings account set up. With that said, i was thinking of putting a large portion of it into Vanguard index funds. Aside from planning to purchase a new phone, i don't have any real big needs at the moment. Was curious to hear other's ideas / thoughts on what to do with that amount of money?

 

[Ob1]

Plop it all into Vanguards S&P 500 Index or Total Stock Market index. If you haven't put 5500 for the year yet, put it in your roth ira rather than a taxable account. You can also buy VYM and get that drip going.