403b mess! Any suggestion?

Office Hours
#1

Hello all,

After taking the PFC Course I decided to finally take a look at my employer 403b account and understand where my money are invested. My 403b brokerage is TIAA.

Currently my funds are automatically invested in a TIAA access lifecycle fund 2055 T4 which has a very high expense ratio of 1.39%. Unfortunately not many options with low fees are availble. Switching to a three fund portfolio will be even more expensive. The only option is a TIAA CREF Social Choice Account (R1) which has an expense ratio 0.5%. I am hesitant of “getting out” of a target date fund because of its benefits (rebalancing and reassessment over time) but the expense ratio is quite high, and as if it wasn’t enough I am having a hard time to find information on morningstar on both of the funds.

Help? Suggestions?

Thank you

#2

Hi Cristina. I also have a 403b and my funds were in annuities making nearly nothing. Once I researched more I learned that I could move to another brokerage. I don’t know much about your situation but I can share that I work for a school district and was able to look at 403bcompare.com to find my district and then see which brokerages I could switch my money too. Luckily I was able to invest through Vanguard but I had to submit a document to my TIA (Third Party Administrator) that handles this type of transaction. I wish you luck! Those expense ratios are very high. I hear that people like to aim for <0.2 (of course the lower the better!).

1 Like
#3

@ashfrica thank you for your answer. I will take a look but I am not sure it will apply to my case. I will spend sometime this weekend investigating what is inside of those funds or look into a rollover or similar.

Although unless I plan to stay with my current employer for a long long time, the fees may still be manageable for the first 5/6 years. Hopefully I can find a solution.

1 Like
#4

I’ll cover this in tonight’s office hours (10/21/2020) with the recording available afterwards on the course site!

#5

@Jeremy you already did last week :slight_smile:

#6

Oopsies! My memory is going! Thank you for the reminder! :slight_smile: