Asset Allocation is a concept involving dividing us your assets among different type of investments. These can include stocks, bonds, cash, real estate, ETFs, and even commodities. This concept should be taken into account when looking at your 403b plan. Since 403b plans are geared towards retirement, a longer-term approach should be used.
Many investment advisors who manage 403b plans will have this option available. It usually involves filling out a short list of questions to determine your investment experience and risk level. Based on these answers, your adviser, would place your 403b assets into appropirate investments to help you reach your retirement goals with a level of risk you can tolerate.
Saturday, March 7, 2009
Saturday, February 14, 2009
So What is a 403b Retirement Plan
403b retirement plans, also known as a tax-sheltered annuity plan, is a retirement plan for employees of public schools, employees of certain tax-exempt organizations and some ministers. The actual accounts in a 403(b) plan can be any of the following types, among others:
- An annuity contract, which is usually provided through an insurance-based company.
- A custodial account, which is invested in mutual funds, and usually based at a company like Fidelity, Schwab or TDAmeritrade.
- A retirement income account set up for church-based employees.
Generally, retirement income accounts can invest in either annuities or mutual funds. These portfolios may follow an asset allocation approach, buy and hold, or even a more tactical active type of investment strategy. The investments could be ETFs, stocks, money market funds or stable value funds.
403(b) plans are designed to act like money-purchase pension plans, in which the employer contributes a percentage of the worker's income each year. Like money purchase plans, they may have various formulas that are in some way integrated with Social Security, and based on their age or years of service. Recent changes in 403b plans have occurred so it is useful to monitor investment news sites for the latest products from the major providers.
- An annuity contract, which is usually provided through an insurance-based company.
- A custodial account, which is invested in mutual funds, and usually based at a company like Fidelity, Schwab or TDAmeritrade.
- A retirement income account set up for church-based employees.
Generally, retirement income accounts can invest in either annuities or mutual funds. These portfolios may follow an asset allocation approach, buy and hold, or even a more tactical active type of investment strategy. The investments could be ETFs, stocks, money market funds or stable value funds.
403(b) plans are designed to act like money-purchase pension plans, in which the employer contributes a percentage of the worker's income each year. Like money purchase plans, they may have various formulas that are in some way integrated with Social Security, and based on their age or years of service. Recent changes in 403b plans have occurred so it is useful to monitor investment news sites for the latest products from the major providers.
Tuesday, January 27, 2009
403b Plans - Investing for Retirement
Welcome to 403b plans, the website blog for all your online resources concerning 403(b) investments. We will define what exactly a 403b investment is and is not. What types of investments can and should be held inside a 403b plan.
We will compare and contrast these plans with 401k plans, 529 plans, and other retirement-based financial strategies. We also will outline what to look for in a investment advisor when it comes to selecting investments for your particular portfolio. So stay tuned for additional posts regarding investments, risk tolerance, legal issues, and more regarding your 403b plan. And as always, do your own homework and hire a trusted investment adviser to guide you through all the decisions you will encounter on the way.
We will compare and contrast these plans with 401k plans, 529 plans, and other retirement-based financial strategies. We also will outline what to look for in a investment advisor when it comes to selecting investments for your particular portfolio. So stay tuned for additional posts regarding investments, risk tolerance, legal issues, and more regarding your 403b plan. And as always, do your own homework and hire a trusted investment adviser to guide you through all the decisions you will encounter on the way.
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