| Fees, operating rules, and investment objectives can vary greatly among vendors and across investments. Therefore, it is important to understand all of these before you begin contributing to any 457(b) investment. Additionally, some investments impose surrender charges or restrictions on withdrawals. It is important to know if there are surrender charges or restrictions on withdrawals before investing. All mutual funds and variable annuities are required to produce a document called a prospectus, which details specific information about investment cost, objective, risk, performance, and operating rules. Ask to see the prospectus before contributing to a variable annuity or a mutual fund. Fixed-annuity products do not have a prospectus. Instead, they have a contract that details operation of the annuity. Ask to see the contract before investing in a fixed annuity. On average, variable annuities charge 2.25% annually; mutual funds charge 1.4% annually; and no-load index funds charge 0.18% annually. | ||
| How Fees Impact Return | ||
| Total value of investment after 35 years, assuming $250 contributed monthly with an 8% average annual return: | ||
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| Note: This example is for illustrative purposes only and is not a predictor of any actual investment. Source: Meridian Wealth Management | ||
| Use our 457(b) Savings Calculator to gain a general estimate of future savings growth in your 403(b) or 457(b) account under a variety of assumptions. | ||
| How a 457(b) Agent Gets Compensated | ||
| There are a variety of ways that financial representatives are compensated. Below is general information on the most common methods of compensation. | ||
| Commission | ||
| Based on a percentage the advisor receives when selling a particular investment product to a client. An advisor should disclose any arrangement with a brokerage firm when recommending a product that would generate a commission. | ||
| Fee plus commission | ||
| When an advisor charges a fee for services rendered and then also collects a commission from the client’s purchase of a recommended investment product. | ||
| Fee only | ||
| Based on an hourly rate or percentage of assets under management. | ||
| Salary | ||
| A flat rate paid to the advisor, typically regardless of products purchased or assets under management. | ||
| Participant Administrative Fees and Who Pays Them | ||
| Fees may apply. Check with your employer. | ||
| Researching Advisors | ||
| Before you begin working with an advisor, it is important that you do your research. Read through our recommended questions to ask an advisor. | ||
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