Vail Valley investors: Consolidating your 403(b) could pay off | VailDaily.com
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Vail Valley investors: Consolidating your 403(b) could pay off

Charlie Wick and Tina DeWitt
Vail, CO, Colorado

If you have a 403(b) retirement plan where you work in the Vail Valley, you may notice some differences this year. Take the time to become familiar with these changes ” because some of them may work to your advantage as you seek to achieve the retirement lifestyle you’ve envisioned.

One significant 403(b) change affects your ability to invest money with different providers, or vendors. Previously, your 403(b) may have allowed you to invest with several vendors. Furthermore, you could make tax-free transfers to any 403(b) vendors.

Under new IRS rules, however, if your plan allows it, you can now move assets from one vendor to another only if both vendors are on your plan’s approved list. Consequently, many employers will likely reduce the number of 403(b) vendors and investment options.

At first glance, this change may seem more restrictive, and in some ways, it is. After all, if the vendor to whom you currently defer part of your paycheck is no longer part of your employer’s plan, you will need to select a new, approved vendor if you want to keep contributing to your 403(b). And you’ll have to evaluate the new approved vendor list to see which vendors are right for your needs.

Yet, as is often the case in many areas of life, what first appears to be a challenge may turn out to be an opportunity. Specifically, if you have several 403(b) accounts, you may now find it beneficial to consolidate them with one vendor.

What advantages might you receive by consolidating your 403(b) accounts? Consider the following:

– Potential reduction of fees and paperwork. By working with just one vendor, you may be able to save on the fees and paperwork required to maintain your account.

– Easier management of distributions. With all your 403(b) assets in one place, it will be simpler for you to manage the required minimum distributions you must start taking when you turn 701⁄2, assuming you are no longer working. (These distributions are not required for 2009.)

Most important, if you place your 403(b) assets with one vendor, you’ll find it much easier to follow a single, unified investment strategy. A local, qualified financial adviser who provides service for your 403(b) vendor can help you allocate your 403(b) investment dollars in a way that’s appropriate for your long-term goals, risk tolerance and time horizon.

In fact, a financial adviser can help you build a 403(b) portfolio that complements your other investments in a way that will enable you to make progress toward your retirement savings objectives.

Furthermore, you’ll be able to have face-to-face meetings with someone who is familiar with your overall investment strategy and who is easily accessible. Thus, if you experience a change in your employment or family situations, or if you want to re-evaluate your goals, you’ll have the guidance you need close at hand.

So take a close look at your current 403(b) accounts to see if you might benefit by consolidating them with a single vendor. A change in the rules may have given you this opportunity ” but it’s up to you to take full advantage of it.

Charlie Wick and Tina DeWitt are financial advisors with Edward Jones Investments. They can be reached in Eagle at 970-328-4959 or in Edwards at 970-926-1728.


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