Do You Have a 403(b) Plan? Don’t Miss 403bWise.com

I’ve always thought of 403(b)s as identical to 401(k)s, just for non-profit and educational institutions. But upon discussing this with a teacher, I found out that they can have their own unique problems: primarily high-priced annuities. Did you know that 80% of 403(b) funds are currently invested in fixed or variable annuities? This is really surprising, considering that annuities are usually only a good idea for high-income people who’ve already maxed out all their other tax-deferred options – why put a tax-deferred product inside another tax-deferred product?

If you’re not sure what you have in your 403(b) accounts, I would definitely recommend reading up at 403bWise.com. Started by teachers, it has a wealth of information about your investment options. Did you know that if you summed up all the various annuity costs you could be losing 3% to fees every year? If you are stuck with a bad administrator, you may be able to do what is called a “90-24 transfer” to a low-cost provider like Fidelity, Vanguard, T. Rowe Price, or TIAA-CREF. There are some upcoming law changes and this transfer ability expires at the end of 2007, so compare your options soon. Another route is follow other teachers and fight for a change from within.

There is also 457bWise for 457(b) holders.