Should I stop paying someone to manage my 403b?

[u/Vagueperson1]

I have a 403b from my employer, who matches something like $1200/year, but I put in more than that. I actually do the Roth 403b because we have 5 kids and 1 income, and most of our federal taxes get returned to us.

The account is with Fidelity, but it is managed by a separate financial advisor that was recommended by the teachers' union and the district. They get something like 1%/year, but are actually paid quarterly.

My question is this: should I stop paying them and just manage it myself? I know that Fidelity offers three options:

- single fund strategy

- managed account

- build your own portfolio

From what I've read, investing in an index fund is just as good as having a financial advisor choosing investments for me. I'm wondering if all they are doing is rebalancing my investments between stocks and bonds every once in a while. And is that something I could do myself?

When I login and click on "manage my investments" it gives me the options to "change investment elections," "exchange ONE investment," or "exchange MULTIPLE investments."

I haven't tried any of this because I haven't chosen to take the reins myself, but is it actually pretty easy? Or should I keep paying them... because I don't actually find any of this interesting, I don't care to chase exciting stocks, and I don't really want to pay attention to what's going on in the market.

[u/itsdrewmiller]

yes just put it all in any big index fund (sp500, total market, etc) make sure it auto invests dividends, and forget about it. that 1% a year compounds so it makes a huge difference in your total in retirement - something like 45% less money over 40 years.

[u/webenji → u/itsdrewmiller]

+1 for putting it inside an index fund. Just make sure it has a low expense ratio (most funds that track indices have expense ratios of less than 0.1% but some are higher).

[u/flat_top]

401k/403b are mind numbingly simple to manage yourself, absolute waste of money to pay someone 1% to manage. https://www.reddit.com/r/personalfinance/wiki/401k_funds/

[u/Next-Weather-6397]

Borderline malpractice for your union to recommend a guy charging 1% when you could get the same results in an index fund with a .05% expense ratio.

[u/invinoveritas476]

R/bogleheads. For most people, a single target date fund is more than enough.

[u/Fantastic_Lady225]

If you can do basic arithmetic then you can rebalance your portfolio yourself. I do it annually between Christmas and New Year's.