Public school teachers 403(b) plans are stuck in the 1970’s.
Jimmy Carter was President and people thought a $3.95 Pet Rock was a good investment.
Unfortunately, conflicted salespeople are peddling their own versions of Pet Rocks to our nation’s educators.
Teacher, Christina Sweeney, unknowingly purchased one.
“We were paying close to 2 percent in fees, between all the insurance fees for having an annuity and the fund fees – some of which had expense ratios of over 1 percent,”
We live in a universe which includes zero cost index funds and $7 trading fees.
How is this possible that in 2018 most 403(b) plans are this awful?
Darla Mercado points out some disturbing facts about this sordid world in her latest CNBC article, ‘
- Public school teachers may save up to $18,500 annually in a 403(b) plan, plus an additional $6,000 if they’re over 50.
- While total costs for 401(k) plans hit an average of 0.88 percent, annuity-based 403(b) plans that are not subject to federal protections can have annual fees of around 2.5 percent.
- It may make sense to explore other savings opportunities, including a Roth IRA or state government 457(b) retirement plans.
We are doing our best to spread the word and implement change through education, collaboration, and legislation.
More help is on the way.
In the meantime, please forward this piece to every teacher you know. One educator at a time is our mission statement.
Without help from our readers, none of this works.
Stop what you are doing and click on Darla’s article. As an added bonus, it includes a few quotes from yours truly.
If this doesn’t offend your financial senses, nothing will.