Am i being stubborn not using my voya stable principal account?

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BashDash
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Am i being stubborn not using my voya stable principal account?

Post by BashDash » Wed Oct 11, 2017 11:38 am

Hi all,
It has been about a year since BH saved my ENTIRE retirement via making me aware of my high fee Voya 403b account. I am eternally grateful. I vowed not to deposit any more money with them ever again. Partly, I am upset at myself and also the lack of transparency I was subject to once I started asking real questions and getting vague/wrong answers. I did leave a couple hundered dollars in this Voya 403b because I thought it would be good to have access to the 4% stability of principal account they have. (4992 Voya Fixed Account - Pre 09/01/2004). There is no restrictions on moving money in or out of this account. The fee is built into the 4%.

I currently am using a 60/40 mix of domestic/international stocks and total bond market index.



Am I being stubborn in not using the Voya account because the total bond market index yield seems much lower. Long term it is about the same though.

I do greatly value simplicity and do not want to start making this complicated by tinkering and sending some contributions to the VOYA account and other contributions to my ultra low fee Security Benefit Direct Invest 403b account. I think I may have just answered my question. However, if there was a good reason for me to use the stability of principal account I'm sure I can figure out a way to do this easily and put it on automation.


Thanks again all BH's!!!

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LadyGeek
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Re: Am i being stubborn not using my voya stable principal account?

Post by LadyGeek » Wed Oct 11, 2017 10:24 pm

This thread is now in the Investing - Help with Personal Investments forum (account management).

Is your Voya fixed income account included as part of your portfolio's bond allocation? It should be.
BashDash wrote:
Wed Oct 11, 2017 11:38 am
The fee is built into the 4%.
The fee is separate from the return. What percent is the fee (expense ratio)? Compare that to the expense ratio of the bond fund.

If you like the comfort of a more stable return, then consider adjusting your asset allocation to "what makes you sleep well at night". See: Risk tolerance

Then, go for the lowest cost of your bond allocations.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Peter Foley
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Re: Am i being stubborn not using my voya stable principal account?

Post by Peter Foley » Wed Oct 11, 2017 10:35 pm

A stable value fund, which it appears that the Voya "stable principal" fund is, can be a good alternative or compliment to a bond fund.

I would look at the historic returns on the fund and the fees.

Note - it is unusual to not have restriction on withdrawals to stable value funds. That is one aspect of the funds that allows them to offer slightly higher rates.

MulesFan
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Re: Am i being stubborn not using my voya stable principal account?

Post by MulesFan » Wed Oct 11, 2017 11:02 pm

I have Voya at work too.

Coincidentally, I met with our account rep on Monday & discussed the Stability of Principal fund. He said Voya does not take any fee from money invested in that account. It was my understanding that Voya makes its money off the spread between what they are making off the investment of those funds and the amount it pays fundholders.

Sometime around the first of the year, the current Stability fund (which pays a guaranteed minimum of 4%/year) will be closed and no new money can be added. It is being replaced by a new Stability fund with a guaranteed minimum that I think is 1.25%.

Apparently the spread they’re gettng on the current Stability fund is not making enough money, hence they are closing it. Money in there before the change will continue to receive the guaranteed 4%.

For other mutual funds in Voya, Voya has a .8% fee and there is also the fee charged by the mutual fund company which varies.

BashDash
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Re: Am i being stubborn not using my voya stable principal account?

Post by BashDash » Thu Oct 12, 2017 11:46 am

Thanks for all the replies. I think I am going to let simplicity win out in this case. The total bond index long term has returned 4% so I honestly think this will be ok.

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