403b Retirement Accounts

Since my wife and I both work for public school districts, we are eligible to contribute to the non-profit's version of the 401k, the 403b. They work the same - contribute with pre-tax dollars, the limits, the rules on withdrawals.

I began investing in Vanguard when I worked overseas for a year. The school matched dollar for dollar so I got a good start. Back in the states my father steered me into American Funds with a broker that helped him as he was getting closer to retirement. I had no idea, so I sat down with an advisor, set up a plan, and began contributing. I also rolled over the nearly 4K I had in Vanguard. Over the years I increased my contributions, eventually putting away over 17% of my salary. I stopped contributing in 2003 when I began taking a more active interest in my personal finances. Though I was happy with the funds I had (especially Europacific Growth Fund), I couldn't stomach the 5.75% front end load American Funds required. I haven't figured out what this load has cost me in the 6+ years of contributions nor do I want to know. I chalk it up as a learning experience, feel grateful that at least I began investing so early in my career, and take some comfort knowing that American Funds weren't hit especially hard in the market plunge in 2000.

Since '03 I've invested in Fidelity. I did my own research at Morningstar, found two or three funds I liked, but couldn't contribute nearly as much as before due to new obligations - house and wife. When I had my first girl, I stopped contributing altogether. Not only was money getting tighter, but I began realizing I wanted less taxable money at retirement. With our pensions, Social Security, and these 403b withdrawals, our taxable income would remain pretty high going into our 60s and 70s.

I now enjoy seeing the income generated by dividends, especially in my American Funds. However, unless something unforeseen occurs, my days of contributing are most likely over.

My wife brought 2-3K of pre-tax investments in Oppenheimer Funds into our relationship, and continues to invest a small amount every paycheck into a Fidelity account. We'll probably end this after this school year.