Should I get out of my 403(b)?

I am a teacher and signed up for a 403(b) when I first started teaching 13 years ago. I did no research and did not realize that their were multiple companies affiliated with my school. I signed up for AXA (ModeratePlus Allocation) since they were the only ones to actively seek out new customers. Since then, I have taken $125 out of each bi-weekly pay check. That's $3,250/year and about $39,000 total. My total account value as of today is just under $43,000. Am I wrong to be upset about only $4,000 worth of gains over the past 12+ years? I'm no expert, but that seems ridiculously low. My question is not whether I should leave AXA or not, because I feel like that is a given, but instead whether I should roll over the $42K into another 403(b), an IRA, Roth IRA, or something else.

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October 2016

I'd have to agree with you. Though the period you are looking at includes the financial crisis, you started investing in the rebound years following the dot-com bubble which should have resulted in some great early returns. Proof of this is in the historical data for many other funds that had much better returns over the same period. You've actually received less than 2% annualized return assuming monthly compounding. I agree that moving from AXA to somewhere else should be a given. I'm not sure of your current employment status though, so depending on that- it's likely that your best option is to continue to invest in your 403(b), just with a different provider. This is because if you're still employed at the same school, you might not be able to close it or roll it over to an IRA just yet. Additionally, moving the money into a Roth IRA would also require not only a roll over, but a conversion which means taxation on the entire amount converted. If you are of age or if you have left the employment of that particular school, given the amount of money, it still might be best to leave it in a 403(b) or roll into your new employer's plan, as the case may be. Assuming you can move the money without penalty, the biggest deciding factor should be what your financial goals are, i.e. how you plan to utilize those particular funds in retirement.

October 2016