ORP/403b

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P.O. Box 2049
Wimberley, TX
78676

512-847-3133
1-800-299-4646

Thursday, February 23, 2012

Texas Optional Retirement Program (ORP) & Voluntary 403(b)

What is a 403(b) plan?
Under Internal Revenue Code 403(b), employees of 501(c)(3) non-profit institutions (colleges and universities, public schools, hospitals, etc.) can contribute money for retirement on a pretax basis through a payroll-reductions plan offered by their employer. In all cases 403(b) contributions are federal income tax deferred, and in most cases, state income tax deferred as well. Generally speaking, these contributions are payroll tax-deferred until withdrawal after retirement, or age 70 at the latest. In all cases, the standard 403(b) plan is voluntary and a supplement to the ORP plan or the Teacher's Retirement System.

Fee-Only Advisors vs. Commission Salespeople

What is a fee-only investment advisor?
A fee-only investment advisor is a Registered Investment Advisor (RIA) who is registered with either the Securities Exchange Commission (SEC) or the State Securities Board of the state you reside in, or both. A fee advisor can charge a fee of up to 2% a year, usually paid quarterly, to help you select, manage, and monitor your retirement plan or brokerage investment account using both domestic and international mutual funds and individual stock and bond portfolios. If you hire a fee-only investment advisor, you are entitled under Federal and State laws to require full disclosure for all fees and expenses paid to the investment advisor.

Sector Mutual Fund Investing

As an investor, when you pay an investment advisor either a fee or a commission to manage your retirement or brokerage portfolio, don't waste your time and money by allowing your paid advisor to invest in diversified mutual funds, especially with a "buy and hold" strategy .

First, when it comes to stock investing, diversified stock mutual funds are funds that invest in stocks representing a variety of sectors of the economy, the logic being that when one sector is lagging, another sector will flourish. This is flawed logic. For most investors, it is much wiser to find and hire retain an investment manager that follows a win-win investment strategy, not a win-lose strategy.

Texas Optional Retirement Program (ORP) & Voluntary 403(b)

Fee-Only Advisors vs. Commission Salespeople

Sector Mutual Fund Investing

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