Tax Sheltered Retirement Accounts
Let's talk a little more about 403b TSA investing. For the initiate, a 403b is a Tax Sheltered retirement account generally available to Educational institution and Non-profit Hospital employees. There may some additional employers available as well. 403b is the section of the IRS code that provides for this vehicle.
When investing in 403b's, your employing school district, College, or Non-Profit Hospital generally has available to you lists of "approved" 403b companies. Some of these are Insurance company based Annuities, and others are more traditional mutual fund companies. You can often approach these companies online without need of a broker/agent's services. By mentioning any company here, I am not endorsing or advocating for these companies, rather I am simply attempting to make you aware of the types of companies available. This writer has a natural prejudice in favor mutual fund based investing. Of course if you are very conservative and don't want to risk capital, then perhaps an Annuity is for you. My problem with Annuities are the Annuity charges and loads which serve to reduce the money available to work for you.
Not all mutal fund companies are equal partners for the purpose of 403b investing. Some companies such as Vanguard, Fidelity and USAA generally can provide you with low administrative cost and no-load investments and can be setup online. Some mutual fund companies tend to had high administrative charges as well as some have heavy loads. Check and get answers to those questions before investing.
Also before investing, one should research the track record of your mutual fund managers. While past successful experience doesn't predict the future, a dismal experience might be instructive.
Remember if your first choice turns out wrong, through a mechanism call a 90-24 transfer between 403b companies, will permit you to move your assets (roll-over) without fear of a tax consequence. Always check with your tax advisor before moving money.
And that's all for today. Please feel free to post your questions.
When investing in 403b's, your employing school district, College, or Non-Profit Hospital generally has available to you lists of "approved" 403b companies. Some of these are Insurance company based Annuities, and others are more traditional mutual fund companies. You can often approach these companies online without need of a broker/agent's services. By mentioning any company here, I am not endorsing or advocating for these companies, rather I am simply attempting to make you aware of the types of companies available. This writer has a natural prejudice in favor mutual fund based investing. Of course if you are very conservative and don't want to risk capital, then perhaps an Annuity is for you. My problem with Annuities are the Annuity charges and loads which serve to reduce the money available to work for you.
Not all mutal fund companies are equal partners for the purpose of 403b investing. Some companies such as Vanguard, Fidelity and USAA generally can provide you with low administrative cost and no-load investments and can be setup online. Some mutual fund companies tend to had high administrative charges as well as some have heavy loads. Check and get answers to those questions before investing.
Also before investing, one should research the track record of your mutual fund managers. While past successful experience doesn't predict the future, a dismal experience might be instructive.
Remember if your first choice turns out wrong, through a mechanism call a 90-24 transfer between 403b companies, will permit you to move your assets (roll-over) without fear of a tax consequence. Always check with your tax advisor before moving money.
And that's all for today. Please feel free to post your questions.
posted by Cincinnatus at
12:28 PM
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