Thanks Sashanna! Appreciate it.

Thanks Chiharu! I’m glad you found it helpful!

Thanks Johnny!

Thanks!

Thanks Jeury! New 403b video coming next week.

That is awesome!! Don’t hear that too often!!

Now that's a great plan!

Thanks bro!

👍

Roth is a great option. You should be able to get a list of all providers so you can compare options. Most districts in NY have a lot of the same companies offering the 403b.

Hey Laura. Yes you will pay taxes when you take the money out of your 403b (unless it is a Roth 403b) after age 59.5. Most people will not just take it all out at once though. They will take out a little at a time...maybe monthly or take a chunk once a year for vacations or a big expense. All depends on your situation when that time comes but yes whatever amount you withdraw each year in retirement is taxable. IRA stands for individual retirement account and is not associated with work. that is set up outside of your 403b plan. Feel free to shoot me an email at rich@schoolofpersonalfinance.com if u have any other questions.

If you have a high cost annuity in your 403b plan with an insurance company then I recommend switching to a low cost provider if available and if one is not available then investing instead in an IRA account.

Hey Cody thanks for your comment! What state do you live in? So a few things...first is to find out what providers you have available (hopefully there is at least one good one in there) 2nd would be to stop putting anymore money in the high cost annuity and start contributing to low cost provider (if u have one). 3rd would be to see if it makes sense to pay the penalty to move balance over to low cost provider (it actually might) or keep funds in high cost plan until penalty is gone and then move it. Hit me up on www.schoolofpersonalfinance.com Also Check out this video I recently made on fees in a 403b plan. kzfaq.info/get/bejne/b6qfaph6qNTFpnU.html

Hi Cody, I've also been in your predicament and have made a video on my channel called "Can You Save Your 403(b)?!" Chances are you might have alternate providers. And most likely should be able to take what is called an "In-Plan Transfer" between two vendors in your plan. Check out the video if you'd like! My video isn't as professionally well done as Rich's, but might still be able to help you.

Hi Sandy! It sounds like it is an annuity product being offered in your 403b. You should do a little research and find out how much the expenses are within the annuity. It would be a great idea to seek guidance from someone you trust that is knowledgeable in this area and not affiliated with the College or National Life.

No not all do! Many plans also have a combo, so some options might be annuities and other options mutual funds.

Thanks for your comment!! Yes, definitely continue to research. You might have a great low cost 403b option available that you can use. A great resource is 403bwise.org Good luck!!👍

I’m glad I found this video and saw this comment! At 29, I was thinking it was time to begin investing with a 403b but wasn’t really sure what it was or how it worked. I teach in a private school in Texas, so a 403b might be my only option. Is it possible to only invest in an IRA? I’ve had no reps come to my school and have very limited information on these different investment plans (apart from Google and KZfaq searches). Im ultimately trying to figure out if investing is worth it. Any thoughts or advice? Thanks!!

Kate Smith yes you can choose to invest in an IRA (Roth or Traditional)instead of the 403b. With an IRA you can contribute up to $6,000 in 2020. The fact that you don’t have salespeople wandering your school is a good thing. You might have a solid low cost 403b plan available at your school. The big advantage with the 403b is that you can save more. (Up to $19,500 in 2020). Feel free to hit me up if u would like some help. You can contact me through www.schoolofpersonalfinance.com. But the big answer to your question is YES you should start investing now for your future. You will thank yourself later. You just want to choose the best option available.

@@katesmith3009 I have a 403b, and it has no fee. I don't understand why people keep saying there is a fee. I have a Guarantee Life-time Income rider on it with a .7% fee. This rider allows me to take money out yearly until I die. What can be better than that!

@@joeyla2802 I wonder if the fees others talk about are related to the mutual funds within some 403b plans. I have an expense ratio of .99% on my JP Morgan 2050 target fund date. I am currently trying to figure out my options for saving with less fees within a 403b or ira.

Sounds like you have a great 403b plan!!

Nice! Make sure the mutual funds are not crazy expensive.

Unfortunately, both options stink. The one time fee probably also has a recurring fee on the individual investment fund. What state are you in? How many different providers are available? I have another 403b video showing how to calculate the fees.

Yeah man that is about as solid as it gets! Is Vanguard a provider in your district? If so you have a lot of great low cost options to choose from but VITSX is a great core holding. Obviously there is risk because it is invested in the entire stock market.

@@SchoolofPersonalFinance thanks man! loving the channel

Great!!

IRA ,traditional or Roth, will serve YOU better.

I would take that free match money! Fidelity can also be a great provider as long as it is the low cost fidelity funds and not he advisor funds.

Hey Jessica! So...the answer to that question is soooo specific to your individual situation that it’s impossible to answer without knowing much more about you. If you are in a low tax bracket and your school offers a low cost 403b plan option then yes it can definitely be a good way to go...but if you have all insurance companies with high cost annuity products then I believe a Roth IRA is a better way to go. Feel free to email me at rich@schoolofpersonalfinance.com if u want to discuss further.

@@SchoolofPersonalFinance Thank you so much!! I really appreciate your response. Will definitely reach out at some point.

I love my roth 403b extra $10k year , Free . Just took out loan $6k (pay myself back in 12-60months) n bought new car , $60 interest lol I got this Roth 403b Rules !!!

Hi Daisy. I am not an expert with the 403b plans available in CA but here are some general thoughts to help you get started. Also, I obviously know nothing about you and this stuff is all very personal and based on your individual situation. 1. Start by investigating the expenses involved with each option. The expenses can be hidden and hard to figure out, but they make such a huge difference over the long term. They are typically expressed as a % of the account balance. 2. Annuities are typically very high cost and unnecessary inside a retirement account like a 403b. They can have a 1.25% insurance charge in addition to the fees for the investment options offered inside the annuity. Overall cost can be upward of 2.5% - 3%. 3. Mutual Funds can also have high costs. Some have a charge each time you contribute plus a % of the account value. 4. Do you have a lot of options in the 403b plan or is it just a few providers? If Vanguard is your provider you might have a great low cost plan. If you have 30 options mostly being insurance companies then you have to be very careful and do a lot of research. 5. Roth IRA's can be a great option depending on your individual circumstances. Roth IRA's are individual accounts not offered through an employer. You would have to open it outside of your employer plan through a company like Vanguard, Schwab, Fidelity, or TD Ameritrade etc. 6. My last thought is you should look into hiring a fee only fiduciary financial advisor that specializes in your states 403b market. The cost of an hour of their time will be a great investment for your future. A great resource is www.403bwise.org. Hope that helps!! - Rich

School of Personal Finance Hi! I am in my early 20s and really appreciate the information. Thank you for taking your time and providing me guidance! This is a new territory I am trying to understand and navigate, I will definitely look into both.

Yes it is. Depends on the providers available in your plan.

Thanks Diana!! So if your husband has a traditional 403b, meaning he received a tax deduction each year for his contributions (this is likely the case) then he will have to pay income tax on any amount rolled over (converted)into a Roth IRA. He can roll over to a traditional IRA without having to pay taxes at that time, but then will have to pay taxes when he takes distributions out of the IRA in the future. Unfortunately, there is no way to escape the taxes...either you pay them upfront (Roth) or you pay them at the time of distribution (Traditional). You could always do partial conversions each year to limit the tax hit and prevent bumping yourself into a higher tax bracket. This takes some advanced planning. Hope that makes sense. Let me know if you have any other questions.

Is that why people move to a different state when they retire? To escape the taxes when they pull their retirement? I’m in CA and many people move to AZ or NV when they retire.

@@HighVibeTeaching would be nice to know right

Nice!

1.5% is not good. Definitely worth looking into your other options.

Nice!! It makes a big difference! Plus a pension...not a bad deal!

If you can just choose Vanguard funds with those low expense ratios then you should contribute $ into your 403b. Make sure the Vanguard option is not inside an annuity or subject to any other fees. If not then you should be good to go and lucky you have that available!!

@@SchoolofPersonalFinance I have a Vanguard target date fund in my 403b. How do I know if it's inside an annuity?

Hey Tashan. It totally depends on the find offering and expenses for your plan. A 5% match sounds pretty sweet! I would want to at least take advantage of that and then maybe invest into a Roth IRA but totally depends on your situation.

Wow! Thanks for the info.

Hey Krystal! Yes any match is nice to receive and most schools I have seen do not offer any. You might also have a better plan than public schools offer. It would be a good idea to seek out some advice from someone you trust that is not affiliated with the plan to get some guidance.

School of Personal Finance thank you!

I would consider being able to buy index funds with expense ratios less than 0.25% to be low cost.

Look at your options available and switch. You can stop contributing to one and start up with a lower cost provider.

Hey Robert. Equitable is an insurance company with annuity products in the 403b space. They are a high cost option. That .9% fee sounds like it is only the expense ratio for the fund. With annuities there are also “M&E” fees which are typically another 1.25%. Did he give you a prospectus or any literature? I would be happy to take a look for you. You can email me at rich@schoolofpersonalfinance.com

Not yet, I'm waiting on the literature now! I've been grilling my "Advisor" on if I have the choice of choosing between mutual funds, ETFs or if I'm strictly stuck on investing into annuities. I'm super unclear on the 403b, this is my first rodeo.

@@RobertSmith-zp7lh you are not alone! it’s the Wild West. Would be great if you have Vanguard, Fidelity or Aspire. Also check to see if you have a low cost 457 plan available in your district.

Also the advisor stated that the .9% IS the M&E, with no additional fees. I want to make sure I'm not going to lose out on a large amount of money later in life due to hidden fees.

The advisor stated that they can/do partner with Fidelity for other accounts. Lots of info to wade through here.

What state are you in? If it is just Fidelity and not Fidelity Advisor funds then it will be much less in fees. I would definitely look further into it and compare the costs.

@@SchoolofPersonalFinance it’s just a fidelity. I was just curious what your thoughts were about equitable formally, known as axa equitable.

@@joeldiaz5857 ok cool. I think Equitable is terrible and you should run as fast as you can. The overall cost of their 403b annuity product is approximately 2.5%. It’s ridiculous. With Fidelity you can probably be all on cost of less than 0.50%. Can result in tens of thousands more for you in retirement.

Yes that sounds great.

I found some expense fees on a fund performance sheet. I don't understand why there is both gross and net. Is this a bad deal for me, keeping in mind that my county is matching 2%? Gross Prosp Exp Ratio 1.17% of fund assets Net Prosp Exp Ratio 1.02% of fund assets Management Fee 0.22% 12b-1 Fee 0.25% Other Fee 0.00% Miscellaneous Fee(s) 0.70%

Hey Alex! Looks like your fees are high!! Can you switch to Fidelity? Is there a plan rep you can talk to? The match is great but it would be much nicer if you could also invest in a low cost provider. Email me if you want to discuss further rich@schoolofpersonalfinance.com

Just imagine if you build up your account to $500k. With an expense of 2.20% you would pay $11,000 a year in fees. That’s insane!!

Yes I would. Obviously it depends on your unique situation.

@@SchoolofPersonalFinance Thanks for your response.

I have a 401k but 403b is completely new

That’s great they match half!

Nice!! 👍

Yes it is crazy how much better the city plan is.

Awesome!! How are your investment options? Are they Insurance products? Fees?

@@SchoolofPersonalFinance I actually haven't invested yet. My Father In Law and I just sat down today and looked over the "menu" as you put it lol. I came across your video to do some more homework. :)

Rhiannon Houghteling nice! Feel free to hit me up if you have any questions. You can contact me through my website www.schoolofpersonalfinance.com. I have another video on 403bs on my channel as well.

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Yeah depends on the plan, but most of them are trash.

This is supposed to be your retirement account not a loan vehicle.

@@Bandaid17 Thats why they are not worth using.

Yes they are!! Unless you are lucky enough to have a low cost provider in your plan.