YOU HAVE FOUND OUR OLD WEB SITE. BE SURE TO CHECK OUT OUR NEW AND IMPROVED SITE!     403(b) Stories In an effort to personalize the 403(b) plan so that participants can learn from one another, 403(b)wise will be profiling real people who contribute to the 403(b) retirement plan.     Matthew, 38, an accountant for an independent scientific research institute in Washington, DC What is your estimated current balance? I currently have about $37,500.   What got you started investing in a 403(b)? When I took this job.   How long have you contributed to a 403(b)? Since September 2001.   Who do you invest with today and how much do you contribute monthly? My plan is with TIAA-CREF. I contribute about $700 per month. My employer contributes an additional $465. I call this free money. I also invest the maximum amount to my Vanguard Roth IRA (now $3,000 per year).   Prior to this job, I had a traditional pension (defined benefit plan) with a consulting firm from 1990 to 1993. I did not contribute any of my own income to that plan. After three years I had accumulated $5,000. Then I worked for an insurance company with a 401(k) plan. I contributed about $100 per month to that plan before rolling the balance over to a traditional IRA, and later a Roth IRA, both through Vanguard.   Do you contribute to a 457(b)? A 457(b) is currently not available.   What is your risk tolerance? When it comes to my risk tolerance, I guess I am moderately aggressive.   What is your approach to asset allocation? Currently, I use the following formula: 100 minus current age equals percentage I need to invest in equities (stocks). Therefore, at my current age of 38 years old, I try to allocate about 62% to 65% to stocks. Roughly 16% of my 403(b) money is in fixed income (bonds) and REITs. Another 22% is in a TIAA Traditional Annuity, which guarantees my principal and a specified interest rate, now paying 5%. I try to allocate 30% of my contributions towards the CREF Social Choice Fund, a blended (stock/bond) fund. This account's manager only invests in stocks that meet strict environmental and social criteria. I have a social conscience so I try to invest that way too.   I strive to rebalance my portfolio once or twice a year to reflect that allocation. Actually, I do need to rebalance my portfolio because my equity balance is now only 60%. I last changed my allocation in the spring of 2003 when stocks were performing poorly. That was a big mistake in retrospect because in a retirement portfolio one should stick with a formula and let it be. As we all know, stocks performed very well in the last two to three quarters of 2003.   What is your feeling on using an advisor? I don't know if using an advisor would be helpful to me or not. I have read quite a bit on how to save for retirement. Aside from 403(b)wise, I enjoy The Motley Fool's website, which like 403(b)wise writes in a clear, lay language, with a sense of humor. But for someone who doesn't want to spend the time — I recently heard the average investor spends only 4 hours a year on his investments — it would be quite worthwhile.   What is your investment philosophy? I think dollar-cost averaging (contributing regular amounts each month) is a powerful investment tool whether it is for your retirement portfolio or non-retirement portfolio. I try to hold onto a stock or mutual fund for at least three years. But there are times when it is beneficial to sell. I think everyone should learn how to read a financial statement (balance sheet, income statement, etc.). There are plenty of books on the subject.   What have you learned about investing? I have learned that investing is actually a fun way to take control of your finances. It takes discipline, but if you invest the time it will pay off in the end.   When would you like to retire? I am not really sure I want to retire. My Dad is 75 and he is still working.   What is your advice for the beginning investor? The new investor should start investing with low-cost, index mutual funds — i.e. something like the Vanguard S&P 500 Index Fund or Vanguard Total Stock Market Index fund — and gradually learn more about individual stocks by learning how to read a financial statement. Mutual funds are much lower risk than investing in individual stocks, especially if you can't stomach volatility.   What is your advice for the late-start investor? I recommend investing as much as you possibly can in work retirement plans and also opening Roth IRA. If you are over age 50 there are catch-up provisions that allow you to contribute additional funds to both the 403(b) and the Roth IRA.   What else would you like to share about your 403(b) and/or 457(b) experience? I am very happy with TIAA-CREF. Unlike my previous 401(k) plan, TIAA offers many different investment accounts with very low fees.   Would you like to share your 403(b) story? If so we want to hear from you! We are especially interested in participants who use an agent or advisor, and participants who have a 457(b). For your participation we will send you a complimentary copy of The 403(b) Wise Guide. If you are interested email us at: contactus@403bwise.com and type "403(b) stories" in the subject line.   Home | Disclaimer | © 2004 bWise Guys, LLC. All rights reserved.				Back to the most recent 403(b) story