Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



A Retirement Plan Horror Story

Schoolteachers often have poor choices for retirement investing. While some are lucky enough to have low-cost plans from providers like TIAA-CREF, Fidelity, or Vanguard, others don't have great options for their tax-deferred retirement savings.

We've called out plan providers like AIG (NYSE: AIG  ) before for their high expenses and lack of good choices. But things can get worse, as some Colorado teachers discovered recently.

So bad, it's criminal
The horrendous surrender charges and obscenely high management and investment expenses that you'll find in many 403(b) plans -- the nonprofit and educational equivalent of 401(k) plans -- technically are not crimes. But one investment advisor found a way to raise the bar rather dramatically.

Gordon Robert Moore, 30, of Longmont, Colo., a former investment advisor for AXA Equitable (NYSE: AXA  ) , pleaded guilty to felony theft, felony securities fraud, and felony computer crime, according to the Colorado Attorney General's Office, in a scheme where $1.7 million was transferred out of the Public Employee Retirement Accounts of 141 Colorado schoolteachers. Moore forged documents that allowed funds to be shifted from Public Employee Retirement Accounts to accounts that he managed at AXA Equitable, according to the AG. He garnered $100,000 in management fees, according to media reports. That sounds like a motive to me.

Amazingly, Moore will likely face only probation. Why? Because, according to Nate Strauch, spokesman for the Colorado AG's Office, "He didn't steal the money. He transferred it."

I bet that made the teachers -- whose accounts might well have suffered trading losses on top of paying those fees -- feel a lot better.

Stay out of the game
That's an extreme example, but it should get us all thinking about our financial retirement plans. If you qualify, a Roth IRA may be a better option for teachers and other workers stuck in bad 403(b) plans. By directly investing in a Roth, you control the investment choices -- which can dramatically lower your annual costs versus a 403(b) plan. And don't forget to keep an eye on your nest egg.

Other Foolish Articles:

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 558656, ~/Articles/ArticleHandler.aspx, 10/27/2016 7:00:37 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
AIG $61.42 Up +0.31 +0.51%
American Internati… CAPS Rating: ****
AXA $21.56 Down +0.00 +0.00%
AXA (ADR) CAPS Rating: ***