403b Transfers

This is the last of our 6-part series discussing the basics of variable annuities and mutual funds in 403(b) plans.  We have discovered that many teachers are unaware of the high fees hidden within their 403(b) plans.

But there is a way to change this, and we can help.  The following steps are best undertaken with an experienced advisor:

1. A determination needs to be made of the surrender fees involved in the variable annuity contract that is usually based on how long you have had the policy.
2. Calculation of funds that can transfer out of your policy penalty-free.
3. Research the vendors available in your school district.
4. Begin the transfer/enrollment process to the new vendor.

At NXT Phase Financial, John Carbonara has worked with dozens of Long Island teachers in transferring out of variable annuities into mutual funds, when appropriate, so their hard-earned money works for them and not toward high fee investments.

• The complete series:
  • 1) Intro to 403(b) Plans
  • 2) Variable Annuity Contracts
  • 3) Variable Annuity Fees
  • 4) Variable Annuity Death Benefit (M&E Fee)
  • 5) 403(b) Custodial Account - Mutual Funds
  • 6) 403(b) Transfers (How We Can Help)
• Continue to Teacher Services
  

Annuities are long-term, tax-deferred investment vehicles designed for retirement purposes. Guarantees are based on the claims-paying ability of the issuer. Withdrawals made prior to age 59½ are subject to a 10 percent IRS penalty tax, and surrender charges may apply. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. The investment returns and principal value of the available subaccount portfolios will fluctuate, so the value of an investor’s unit, when redeemed, may be worth more or less than the original value. Optional features available may involve additional fees. When considering using variable life insurance policies for supplemental retirement income, it’s important to note that underperformance of the policy’s subaccounts may require increased premium payments to prevent a policy lapse. In the event of a policy lapse or termination, outstanding loans will be deemed a taxable payment to you as the investor. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the variable annuity or mutual fund, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.