Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

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TeacherInCa
Posts: 21
Joined: Thu Jun 22, 2017 9:15 am

Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by TeacherInCa »

Hello,
I currently have a ROTH 403b at Voya (CalStrs Pension 2), but they are charging me .25% admin fee in addition to the fees for each selected Vanguard fund. Why does Vanguard not have a ROTH 403b?
PFInterest
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Joined: Sun Jan 08, 2017 12:25 pm

Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by PFInterest »

I don't know. Did you ask them?
dbr
Posts: 34190
Joined: Sun Mar 04, 2007 9:50 am

Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by dbr »

TeacherInCa wrote:Hello,
I currently have a ROTH 403b at Voya (CalStrs Pension 2), but they are charging me .25% admin fee in addition to the fees for each selected Vanguard fund. Why does Vanguard not have a ROTH 403b?
Don't you mean why does CalStrs Pension 2 not utilize Vanguard as a vendor? At least that would be my understanding of the issue.

But according to this Vanguard funds are available in the plan:

Core
Investments
Options

For those who prefer to build their own portfolio, Pension2 provides access to investment options
that cover several different asset classes. You may choose from the core funds listed below to develop
a portfolio that matches your time horizon and tolerance for assuming risk, and you manage and adjust
your portfolio over time.
The CalSTRS Pension2 Advisory Committee selects each of the core funds to ensure the highest
quality investment choices. The funds are continuously monitored to ensure that they meet the
performance standards of CalSTRS and any fund that does not will be placed on the Investment
Watch List. If the fund continues to underperform, a new fund will be selected as a replacement.
Stability of Principal
Voya Fixed Plus III
Federated U.S. Treasury Cash
Bond
Vanguard Total Bond Market
Vanguard Short-Term Bond Index
Inflation Protection
Vanguard Inflation-Protected Securities
U.S. Large Cap Stock
American Growth Fund of America
Dodge and Cox Stock
Vanguard Institutional Index
Vanguard Total Stock Market Index
TIAA-CREF Social Choice Equity
U.S. Small/Mid Cap Stock
Vanguard Mid Cap Index
Vanguard Small Cap Index
Global Stock
GMO Global Equity Asset Allocation
ESG Managers Growth
Foreign Stock
Artisan International
DFA International Small Company
Dodge and Cox International Stock
Vanguard Developed Markets Index
Vanguard Emerging Markets Index
Other
Vanguard REIT Index
PIMCO All Assets

In addition there is this option:

Self-Directed
Brokerage
Account

For those participants looking for additional control over their retirement portfolios, the
Self-Directed Brokerage Account gives you access to a greatly expanded range of mutual funds.
Through the fee-based brokerage account offered through TD Ameritrade, you will have access
to more than 800 no-transaction-fee mutual funds, in addition to thousands of transaction-fee
funds and certificates of deposit. You have to apply for and set up a separate Self-Directed
Brokerage Account before you may trade mutual funds. Please note: the mutual funds are not
selected, reviewed or monitored by CalSTRS.
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FiveK
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Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by FiveK »

TeacherInCa wrote:Hello,
I currently have a ROTH 403b at Voya (CalStrs Pension 2), but they are charging me .25% admin fee in addition to the fees for each selected Vanguard fund. Why does Vanguard not have a ROTH 403b?
Have you asked (as PFInterest suggested)?

It is true that in their own words Vanguard does not currently offer an after-tax or Roth 403(b) option in our program. Doesn't say "why".
Nyakendu
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Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by Nyakendu »

Hi, first time poster - I'm not a tax person but maybe it depends on the arrangements one's employer has made with Vanguard? I have a Roth 403b with them through my employer and when I click the link that Fivek has shared, it takes me tight to the Vanguard Roth page here https://personal.vanguard.com/us/whatwe ... 7employees
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FiveK
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Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by FiveK »

Nyakendu wrote:Hi, first time poster - I'm not a tax person but maybe it depends on the arrangements one's employer has made with Vanguard? I have a Roth 403b with them through my employer and when I click the link that Fivek has shared, it takes me tight to the Vanguard Roth page here https://personal.vanguard.com/us/whatwe ... 7employees
That is a Vanguard 403b page, not a Vanguard Roth page. On that page is the quote about Vanguard not offering a Roth option for 403b accounts.

But web sites, even a vendor's own web sites, are not infallible. Do you in fact invest in a Roth 403b through Vanguard (as opposed to, for example, buying Vanguard funds in your Roth 403b through a different vendor)?
dbltrbl
Posts: 900
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Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by dbltrbl »

Count on your blessing. I just received a letter from Vanguard, towards the end of this year, they will charge you flat $5.00 per month for a 403b account. That is pretty penny on a small 403b. They are also changing their policy and now you can have admiral shares in 403b which were never allowed before. It is a generic letter so I assume it applies to many employers and not just mine.

We have option of both Vanguard and Fidelity Index funds so guess where my funds might be going. Their charge $ 4.00 per year not $5.00 per month.

May be its for incoming CEO's salary :sharebeer

Good day
TropikThunder
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Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by TropikThunder »

TeacherInCa wrote:Hello,
I currently have a ROTH 403b at Voya (CalStrs Pension 2), but they are charging me .25% admin fee in addition to the fees for each selected Vanguard fund. Why does Vanguard not have a ROTH 403b?
You have a CalStrs Pension 2 403b, so whether Vanguard offers a Roth version for its small-business customers is irrelevant (can't choose your own custodian). If your plan allows Roth contributions, you can make Roth contributions to whichever funds your plan has available (as dbr listed).
Dantes
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Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by Dantes »

I have a Roth option in my 403B Account at Vanguard so I would say it depends upon your employer's arrangements, not on Vanguard.
Nyakendu
Posts: 15
Joined: Fri Jul 14, 2017 2:15 pm

Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by Nyakendu »

FiveK I have a Roth 403b with Vanguard. No other vendors.
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FiveK
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Re: Vanguard Retirement Account [why doesn't Vanguard have a ROTH 403b?]

Post by FiveK »

Nyakendu wrote:FiveK I have a Roth 403b with Vanguard. No other vendors.
I believe you. Makes it that much more interesting Vanguard would state "Vanguard does not currently offer an after-tax or Roth 403(b) option in our program."

Maybe it goes to the definition of "our program"? Or "currently" - as in they used to, and have grandfathered existing clients, but no longer offer this to new clients?
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