What is a 403B and how does it work?
This is a stupid question, considering I’ve been putting $125 a month into a 403B account for a year and I don’t even know what it does! They just told me it was some sort of “retirement” account, so I’m in.
Our tax accountant said it was similar to a 401K. But I know my business doesn’t match an part of what I put in. So I asked in what aspect was it similar to a 401K, and he didn’t know.
It’s through American Fidelity.
I also have KPERS.
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Not a stupid question.
The bottom line up front here is that a 401K or a 403B allows you a little shelter from the tax man. It is a good idea to take every tax advantage that you get.
401K and 403B are similar in that they offer you a way to tax defer your income which may put you in a lower tax bracket. Of course 401K’s are superior to 403B’s in that with a 401K your company typically adds funds to your to your money input.
Also it would be a good idea to investigate all of the different stocks in which your money is being invested. You want to invest in strong companies.
I’ve been trying to figure out how to do that….track my investments. But haven’t figured it out yet.
The investment organizations that manage your 403B should give you regular up-dates with tracking information on how your stocks in the various companies. Also prior to participating in your 403B, you should have been given a list of companies for you to chose from that you would like to invest in as well as company performance over the last few years. If a company has been doing well over the last 5 to 10 years then that would be a company of interest to me.
Um. Looks like it’s in the Dreyfus Stock Index funds. What is that?
I just gotta get ahold of some one. Like, in your link it says “Minimum investment $10,000”....Thanks you guys!
@Dutchess_III Your workplace has worked a deal with the company. The minimums probably do not apply. Ask HR for the plan details.
I’m getting somewhere. :) There is an 800 number for me to call, which I will do on Monday.
Some people don’t think that a 403B isn’t worth investing in because their employer doesn’t contribute any money like with the 401K. But I have made the 403B work very well for me. I started contributing close to the maximum amount to my 403B 17 years ago and I just checked it and my account has grown to $406,700 (I don’t mind giving that information because I don’t know you). Of course I also maxed out my IRA account and made other investments in the stock market as well.
I must caution you that the stock market is now at or near an all time high. Don’t be surprised or discouraged if your 403B account takes some major dips in the near future. I have continued to invest through all of the stock market crashes. I viewed them as buying opportunities. That strategy will likely work for you also. But there are no guarantees.
The best of good luck to you!
Can I borrow some money @gondwanalon? I’m somebody you don’t know so it’s ok!
Do you go in and move your stocks around, or just let it be?
Also, looking at my statement it says:
Dreyfus Stock Index Fund $1324
Participant Account Value $1324
Total Account Value $1324
Total Vested Account Value $1324. (I don’t mind telling you this info because I don’t know you either. And it’s a pathetic number.)
That just doesn’t give me a clue, really. I assume I’ve contributed $1324…but I don’t see where it lists any investment values….
HA! Good one!
It looks to me that your assumption as to the meaning of the Dreyfus information is correct but check it out for sure.
Anyway the stocks that Dreyfus manages have an overall OK track record. See below:
Average Annual Total Returns
as of 12/31/12
1 YR = 17.74%
3 YR = 3.40%
5 YR = -3.94%
10 YR = 7.73%
Since Inception Date = 2.96% 06/30/97
My 403B is through Lincoln Financial and Aetna. For both I had the option to pick the companies to invest in as well as what percent of my money would go to each company’s stock. Or I could simply let the managers of my 403B chose for me. I did just a little research and picked my own stocks from the list that was offered to me.
Outside of the 403B I also invested a lot in the S&P 500 though Vanguard Index Funds and have done very well there. In addition to that my IRA’s are with Vanguard. I like Vanguard because they own the S&P 500 and have very small account maintenance fees.
Happy stock picking!
@Dutchess_III Reading that, I take it to mean that if you leave your job now, your account has a total value of 1324 which you could leave where it is or take to another firm.
Remember, Dreyfus has thousands of customer companies which each have little tweaks to their plans and they offer dozens of mutual funds.
So
Dreyfus Stock Index Fund $1324 (This is how much you have in that PARTICULAR FUND- If you had more than 1 fund selected, it would show a second fund underneath)
Participant Account Value $1324 (This is how much you own of the account if you left today, versus your company- Looks like 100%)
Total Account Value $1324 (This is your total account Value- So if you had more than one mutual fund in your 403B, it would likely be the sum)
Total Vested Account Value $1324. (This is how much you own if you left today, again, if you had more than just the index fund, it would be a sum)
So..what if I do leave? Do I need to withdraw that, or can I leave it there?
Usually you can leave it there indefinitely, or roll it over to a different company as a rollover IRA whenever you feel like it.
Will it continue in the stock market if I just leave it?
It will stay in that fund typically. I haven’t read the specifics of your company’s deal with Dreyfus. They might charge an inactivity fee if you don’t put any more into it within a certain time. Then you would roll it over to another company, it would be an IRA at that point.
Let me clarify. You would roll the funds to another investment company, or to a bank that has IRA products.
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