- A 403(b) plan, is also known as a tax-sheltered annuity (TSA) plan
- Employees accounts in a 403(b) plan can be any of the following types *.
- An annuity contract, which is a contract provided through an insurance company,
- A custodial account, which is an account invested in mutual funds, or
- Generally, 403 (b) plan retirement income accounts can invest in either annuities or mutual funds.
- Based on WWW.IRS.GOV
403(b) Plans – Custodial Accounts Transamerica “ Plan Administrators
- Self Directed Accounts are set up. This is done as Charles Schwab PCRA (Personal Choice Retirement Account) in the name of the Individual.
- Contributions come into the Individuals Transamerica account and then transferred to the Individuals PCRA.
- Benefit of managing the retirement through the PCRA option is the availability of over 2000 NO-LOAD funds. Over half of them are no-transaction fee funds.
SELF-DIRECTED RETIREMENT ACCOUNTS TRANSAMERICA 403 (B) PLAN PARTICIPANTS
- CONTRIBUTIONS COMING IN EVERY MONTH IS ONLY INVESTED IN VANGUARD 500 FUND
- INVESTMENT INTO THE TFLIC (5%-CHARGE ANNUTITY) IS PREVENTED.
- THIS IS DONE THROUGH EXPRESS INSTRUCTIONS TO TRANSAMERICA
GoodWins Role as the Portfolio Manager
- The Client gives GoodWin Limited Power of Attorney to make transactions on the Clients portfolio in the Clients PCRA.
- GoodWin starts off by building an Investment Policy Statement for the Client.
- The Asset Allocation is made based on the Clients personal risk and return profile and the Clients portfolio of mutual funds is built.
GoodWins Criteria for Picking the Mutual Funds
- Only NO-LOAD funds are chosen
- Transaction Fee Mutual Funds are chosen only if they benefit the Clients long-term investment needs or if the Funds have low expenses.
- Mutual funds are chosen based on their Funds individual Portfolio Holdings.
- No two funds are chosen in the Clients portfolio with similar holdings which would increase the Clients overall risk profile.