3.5% Yield for 457(k) Fixed Guaranteed
3.5% Yield for 457(k) Fixed Guaranteed
Current 457(k) Fixed is yielding 3.5% guaranteed.
It is increasing difficult to find any thing close to it.
It is tempting to consider leaving funds in the employer plan
upon retirement.
Is it OK to leave the 457(k) funds in the employer
plan upon retirement?
It is increasing difficult to find any thing close to it.
It is tempting to consider leaving funds in the employer plan
upon retirement.
Is it OK to leave the 457(k) funds in the employer
plan upon retirement?
Re: 3.5% Yield for 457(k) Fixed Guaranteed
Yes, it is OK.
Re: 3.5% Yield for 457(k) Fixed Guaranteed
Many individuals have their "retirement portfolio" In multiple accounts with different employers or financial institutions depending on the offerings of each which they find attractive. Sure it's okay.
The closest helping hand is at the end of your own arm.
Re: 3.5% Yield for 457(k) Fixed Guaranteed
Depends on the plan document, especially for nongovernmental 457.mur44 wrote:Current 457(k) Fixed is yielding 3.5% guaranteed.
It is increasing difficult to find any thing close to it.
It is tempting to consider leaving funds in the employer plan
upon retirement.
Is it OK to leave the 457(k) funds in the employer
plan upon retirement?
In the case of my 457b
If you do nothing on separation it will distribute the funds to you as quickly as possible as taxable income.
It will allow you to specify one specific date in the future when they will distribute the funds. This date cannot be changed.
It will not allow you to roll over to an IRA or to another 457 plan.
Re: 3.5% Yield for 457(k) Fixed Guaranteed
Q: Does it say "guaranteed"? If so, can you provide a screenshot of the 457(k) Fixed?mur44 wrote:Current 457(k) Fixed is yielding 3.5% guaranteed.
Re: 3.5% Yield for 457(k) Fixed Guaranteed
Thanks all of you for your valuable input.
The 457(k) is (NJ) local government based and
managed by Nationwide Retirement Solutions.
The Fixed is an annuity.
The 457(k) is (NJ) local government based and
managed by Nationwide Retirement Solutions.
The Fixed is an annuity.
Re: 3.5% Yield for 457(k) Fixed Guaranteed
Do you have a link so that I can check whether it specifically states "guaranteed?"mur44 wrote:Thanks all of you for your valuable input.
The 457(k) is (NJ) local government based and
managed by Nationwide Retirement Solutions.
The Fixed is an annuity.
Re: 3.5% Yield for 457(k) Fixed Guaranteed
If you are allowed to leave the funds and if there are no other management fees (which sometimes become yours when you retire), I don't see a problem with it. I'd keep an eye on it though. That 3.5% might change.mur44 wrote:Is it OK to leave the 457(k) funds in the employer plan upon retirement?
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Re: 3.5% Yield for 457(k) Fixed Guaranteed
I have the exact same deal (3.5%) but with a 403b thru my former state employer. It is administered by Lincoln National. I had also money with TIAA that would
guarantee 3% but I took that out and put in stocks with Vanguard. I currently keep the "bond portion" of my portfolio with Lincoln earning that 3.5 ....
guarantee 3% but I took that out and put in stocks with Vanguard. I currently keep the "bond portion" of my portfolio with Lincoln earning that 3.5 ....
Re: 3.5% Yield for 457(k) Fixed Guaranteed
I suspect when they say guarantee 3%, it's a 3% guaranteed interest rate. Similar to 30-yr 3% T-bond guarantees $30 annual payment. However, this doesn't mean the rate of return will be 3%.Deep Thoughts wrote:I have the exact same deal (3.5%) but with a 403b thru my former state employer. It is administered by Lincoln National. I had also money with TIAA that would
guarantee 3% but I took that out and put in stocks with Vanguard. I currently keep the "bond portion" of my portfolio with Lincoln earning that 3.5 ....
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Re: 3.5% Yield for 457(k) Fixed Guaranteed
acegolfer: the 3.5% with nationwide that the OP is almost for sure a stable value fund.I have most of my fixed income in the same fund, different employer. It would be guaranteed for this year to be 3.5% ( and has been at that level or more for a very long time). But it is not guaranteed to be that much next year.There is a good chance it will drop to something like 3% next year given the lower yields the fund can get from current bonds it is investing in. Also there could well be withdrawal limitations such as only being able to withdraw 20% per year. It is also not guaranteed that Nationwide will not go broke, although it is almost guaranteed that it will not.
OP: check about withdrawal limitations. Otherwise that is about the best fixed income going: I would hang on to it if at all possible.
OP: check about withdrawal limitations. Otherwise that is about the best fixed income going: I would hang on to it if at all possible.
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Re: 3.5% Yield for 457(k) Fixed Guaranteed
At close of business today, the stable value funds (Insurance Company Contract fund) in my 403(b) and 457(b) accounts will automatically be moved into the savings fund (about 1% return). Earlier the stable value fund was closed to new contributions due to reduced rates available from insurance providers. After additional contracts expired at the end of December 2013, the return had dropped to about 1.7%. Oh well, I still have access to the TSP G Fund (currently paying 2.25%). A partial rollover into the TSP may be in my future.castlemodesto wrote:acegolfer: the 3.5% with nationwide that the OP is almost for sure a stable value fund.I have most of my fixed income in the same fund, different employer. It would be guaranteed for this year to be 3.5% ( and has been at that level or more for a very long time). But it is not guaranteed to be that much next year.There is a good chance it will drop to something like 3% next year given the lower yields the fund can get from current bonds it is investing in. Also there could well be withdrawal limitations such as only being able to withdraw 20% per year. It is also not guaranteed that Nationwide will not go broke, although it is almost guaranteed that it will not.
OP: check about withdrawal limitations. Otherwise that is about the best fixed income going: I would hang on to it if at all possible.
Re: 3.5% Yield for 457(k) Fixed Guaranteed
mur44,mur44 wrote:Current 457(k) Fixed is yielding 3.5% guaranteed.
It is increasing difficult to find any thing close to it.
It is tempting to consider leaving funds in the employer plan
upon retirement.
Is it OK to leave the 457(k) funds in the employer
plan upon retirement?
I had planned on leaving a big chunk of my 457b plan balance behind in the CT stable value fund after retirement specifically to take advantage of the "guaranteed" interest rate of 3%.
Then they lowered the "guaranteed" 3% rate below 3% to a new "guaranteed" rate of 2.5%! (Yes, they had the nerve to call the new lower rate "guaranteed" also. )
See here: Stable Value Rate Below "Guaranteed Minimum"?
I don't know if I'll leave anything in the 457b anymore, or just roll it all over to Vanguard.
Maybe NJ is not as corrupt as CT (I view this as a gift to potential political donors in a gubernatorial election year), but just be reminded that there are very few "guarantees" in this world.
--Peter
"Discipline matters more than allocation.” |—| "In finance, if you’re certain of anything, you’re out of your mind." ─William Bernstein
Re: 3.5% Yield for 457(k) Fixed Guaranteed
When they say "guarantee", it may mean they guarantee not to default.petrico wrote: mur44,
I had planned on leaving a big chunk of my 457b plan balance behind in the CT stable value fund after retirement specifically to take advantage of the "guaranteed" interest rate of 3%.
Then they lowered the "guaranteed" 3% rate below 3% to a new "guaranteed" rate of 2.5%! (Yes, they had the nerve to call the new lower rate "guaranteed" also. )
See here: Stable Value Rate Below "Guaranteed Minimum"?
I don't know if I'll leave anything in the 457b anymore, or just roll it all over to Vanguard.
Maybe NJ is not as corrupt as CT (I view this as a gift to potential political donors in a gubernatorial election year), but just be reminded that there are very few "guarantees" in this world.
--Peter
Re: 3.5% Yield for 457(k) Fixed Guaranteed
I thought the guarantee was for the next year....
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Re: 3.5% Yield for 457(k) Fixed Guaranteed
Good guess, but that's not correct. There are links to some fund documents in the link above. And I found an earlier report of meeting of the STATE EMPLOYEES RETIREMENT COMMISSION in which they correctly referred to the guaranteed minimum 3% interest rate, from before they decided they could get the state to agree to waive that requirement. See here: http://www.osc.ct.gov/rbsd/meetings/ret ... 122012.htmacegolfer wrote:When they say "guarantee", it may mean they guarantee not to default.petrico wrote: mur44,
I had planned on leaving a big chunk of my 457b plan balance behind in the CT stable value fund after retirement specifically to take advantage of the "guaranteed" interest rate of 3%.
Then they lowered the "guaranteed" 3% rate below 3% to a new "guaranteed" rate of 2.5%! (Yes, they had the nerve to call the new lower rate "guaranteed" also. )
See here: Stable Value Rate Below "Guaranteed Minimum"?
I don't know if I'll leave anything in the 457b anymore, or just roll it all over to Vanguard.
Maybe NJ is not as corrupt as CT (I view this as a gift to potential political donors in a gubernatorial election year), but just be reminded that there are very few "guarantees" in this world.
--Peter
2014 is an election year...ADDENDUM ITEM TO THE AGENDA
16. REQUEST COMMISSION APPROVAL OF THE RECOMMENDATION OF THE INVESTMENT SUBCOMMITTEE REGARDING RESETTING THE CREDITING RATE FOR THE STABLE VALUE FUND EFFECTIVE FEBRUARY 1, 2012. Mr. Baus moved, seconded by Mr. Greatorex to reduce the rate from 3.5% to 3.15%. There is a guaranteed rate of 3% with the plan so it will not be changed until it starts moving upward. All voted in favor
Unanimous Decision
--Peter
"Discipline matters more than allocation.” |—| "In finance, if you’re certain of anything, you’re out of your mind." ─William Bernstein
Re: 3.5% Yield for 457(k) Fixed Guaranteed
acegolfer,
Please open the following link and last line
says 'View the Fund Fact Sheet':
https://myplan.ingplans.com/einfo/fundi ... d6f695da34
Please open the following link and last line
says 'View the Fund Fact Sheet':
https://myplan.ingplans.com/einfo/fundi ... d6f695da34
Re: 3.5% Yield for 457(k) Fixed Guaranteed
TY. I looked up how the fund defines "guaranteed yield."mur44 wrote:acegolfer,
Please open the following link and last line
says 'View the Fund Fact Sheet':
https://myplan.ingplans.com/einfo/fundi ... d6f695da34
So it's not a fixed rate over the life of the product. And if I interpreted correctly, they can set 2015 guaranteed yield at 3.00%.Nationwide will declare, prior to the beginning of each calendar year, the guaranteed minimum interest yield to be credited during that calendar year. The yield for 2013 will not be less than that set forth above.