It all started when we asked SIL if she could open a 529 account for her second child so we could contribute to it as we’d been contributing to that of her first child.
She told us that her financial advisor at work had told her not to open a second 529 plan. I wondered at the quality of that advice as we’d recently done an ask-the-grumpies post on that very topic.
DH asked who her advisor was. Turns out it’s some company named AXA. If I say too much that’s terrible about AXA, their lawyers will likely contact us, just like they did the owner of the finance for teachers site. AXA features (along with a similar company named Legend) in the NYTimes article(s) below about 403(b) plans that are a terrible deal for teachers because of their high fees and lock-in periods.
It makes me so mad that we’re doing this to our teachers! Especially since teachers from my parents’ generations have great defined benefit pensions, while those starting out now are, like the rest of us, largely dependent on putting money from our take-home pay into defined contribution plans. It is terrible that for many of them, their only 403(b) options are eating away at their retirement savings with high fees and bad advising that pushes them into higher fee funds. K-12 teachers (especially those who aren’t high school math teachers and maybe should know better) should be able to trust that their employer is going to pick out a good plan so all they have to do is save money for retirement. Why can’t TIAA-Cref manage more K-12 403(b) plans?
I mean, it’s bad enough that my FIL’s company uses Edward Jones. (This summer upon retirement, he informed me that he would be saving 10K/year rolling over his retirement assets to Vanguard on retirement. My MIL noted that’s equivalent to 4-5 online classes she does not have to teach. Made that generous $200 donation his EJ broker gave each year to his local hunting club fundraiser seem pretty negligible.) I am so glad we got him that Bogleheads book on investing after his nth email asking us about some risky single stock his EJ broker was pushing on him.
Do you have decent 401(K)/403(b) retirement options at work? How big are the fees on your plan?