The Advisor - November 2010

IMPORTANT NEWS FOR YOUR FINANCIAL AND PERSONAL FUTURE

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What Is the Best Way to Get Started?

Participating in your district’s 403(b) or 457 plan doesn’t have to be overwhelming. Here are four simple steps to get started.

1. Contact your district:

  • Request a copy of your district’s 403(b) plan document and/or 457 plan information including a summary of the plan provisions such as loans, transfers, exchanges and any fees.
  • Ask for enrollment forms and any associated paperwork.

2. Review the vendors and products:

  • Determine what type of investor you are (conservative, moderate or aggressive), and think about the type of 403(b) or 457 product that makes sense for you.
  • Determine whether you want to use a commissioned sales representative through an insurance company or invest directly through an investment custodial account.
  • Review the three basic types of products to choose from: fixed annuity, variable annuity and mutual fund.
  • Decide whether you are going to invest in a fixed or variable annuity, or directly in mutual funds through
    403(b)(7) products.
  • Be sure to compare performance, fees and expenses, as well as whether the investment suits your goals, timeline and risk tolerance at 403bCompare.com.

3. Decide how much to save:

  • What is your time horizon? This is the amount of time you have to save before retiring.
  • Figure out how much you can contribute from each paycheck and remember that compound interest earnings grow tax-free.

4. Sign up:

  • Complete and submit a salary reduction form with the amount you want to contribute.
  • Complete and submit enrollment forms indicating the investments you want in your plan.

CTAinvest.org Can Help!

Need help with your 403(b)? Have questions about investing and retirement planning? CTAinvest.org has answers. For help in understanding the different types of investments available in 403(b) plans and choosing those appropriate for you, visit CTAinvest.org, CTA’s investment education website. The site offers a wealth of retirement planning and investment education information, and no log-in is required. You can also order printed copies or download PDF files of two helpful publications, “Closing the Gap: Supplementing Your Pension with a 403(b) or 457 Plan” and “Selecting a 403(b)/457 Advisor & Understanding Plan Fees.” Both of these publications were developed by CTA to help educators make informed choices about their retirement investments.

  1. Use Getting Started to help you get started with your 403(b) or 457 plan
  2. Create an online Personalized Checklist to keep track of what you need to do to stay on course
  3. Read the articles
  4. View Videos:
    Why Participate in a 403(b) or 457 Plan?
    A look at Fixed Annuities
    Comparing 403(b) and 457 Plans