New teachers should look closely at the 403b plan they are offered and weigh it against your other choices.
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The biggest problem with a lot of teacher 403bs is that they might be annuities charging 1-2% in fees. Better to focus on the Roth IRA and just invest in VTI (low fee, total market stock index fund or some other similar fund)
What about roth 403b's?
So my district discovered that my investment company was contributing to my roth and not a 403b. So the company wants to move the money (3000) into a 403b and they offered to pay me the lost gains as well (about 500) if I sign a release that will indemnify them. They claim that both of these money moves will be non taxable events. Is that true?
I know NO teachers in NV will make more with their pension than their highest check. Best case scenario (full 30 years of service, which I'm approaching) you MIGHT get 75% of your highest income amount and that figure only applies to teachers who started before 2010.
That being said, does anyone have thoughts on 403b plans for veteran teachers? I just enrolled in one and I'm already having doubts.
I just noticed my 403 with pension 2 has a voya III fixed plus which is a annuity I believe. I also have van guard in this portfolio. Shoukd I consider removing the voya III ?
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Good vid, very informative . Dope music at the end
Retired teachers are some of the wealthiest retirees in the country.
Hi Dustin,
I'd like to provide some insight to teacher 403b's from the perspective of a public school teacher in California. I participate in my districts plan and would like to tell you how it works in California. Your misinformed about fees and mutual funds available to us teachers. I look forward to hearing from you so I could "teach" you about 403 b's in California.
Take care
I absolutely cannot stand CalSTRS! I really wish that they gave teachers a choice on where and how much to put our own money. I don't like that it is a law. I'd rather be able to take my money and invest in real estate.
Hey Dustin- In CA check out CalSTRS pension2 fund. I'm wondering if this would be an exception? I don't think any teachers in CA earn more in retirement. Would love to watch more teacher videos. Thanks! Love this site.
we have a Roth version and it has a Vanguard self directed accounts with unlimited low cost options.
Question: If I have to potion to "roll-over" my 403b into a 401k after retirement, would that be a way to avoid all the taxes?
I'm going to invest $6k/year into my Roth, Growth Stock Mutual Funds, and remaining percentage into a Self-Employed retirement account until I've invested 15% of my gross. I am a small business owner and will start teaching next year. Total investment is planned to be $15k annually, without factoring in annual salary increases. If it averages 10% over 25 years, I should have a nest egg over $1.6MM, and a teaching pension on top of it. So probably over $200k annual retirement income. I'm starting my teaching career older than most. I'll be 43, retire at 68. Hopefully sooner.
Painting with a broad brush so your advice is bad. New teacher aren't getting cash defined pensions. There are good 403B plans, it just depends on your district.
Lol , he is absolutely incorrect about annuities . FYI : he makes money when he helps someone . I agree the 403B is crap , but there are more reasons than he gives to steer clear of 403Bs . 403Bs for medical community seem to deliver higher yields while correct teachers are taken advantage in multiple ways are screwed by these low yield vehicles .
My 403b is a Roth. So point one is out.
I have a 403B with my school district. I use their little-advertised brokerage window option with the 403B. This allows me to invest in stocks, ETFs, another securities all inside my 403B. I was 100% in Tesla and now 100% GBTC bitcoin (for the duration of the 2021 bull market cycle) in my 403B. My balance is currently over half a million dollars. I expect to be a multimillionaire by 2024, barring a prolonged major market crash.
No offense but I believe you aren't correct at all, and you are misleading. 1- I invest in growth stock mutual funds in my 403b not an annuity. I do not get the fees you described. 2- I put in $800 and defer $150 a month. That's significant. 3- When I retire at 30 years I'll get 60% of my last highest year for my pension. It's extremely rare, that as a teacher you retire and receive 100% of your last highest paid year. Therefore, a 403b is better than a Roth IRA if you can't invest more than $19,500 a year.
Helpful information.
Curious… Can a 403B be cancelled /closed and transfered to an IRA … Without tax penalty?
Now you tell me!!!!
I actually make good money
Hi,
I'm a teacher making 6 figures. I was told to invest in a 403b bc my salary is high and I dont pay high fees or have an annuity and when I retire the taxes will be lower then according to my pension. What do you think?
Why narrow your video to just teachers? Second, what if your employer matches up to 19k a year? Is it worth it then?
There are Roth 403(b)
The pension makes up only about 1/2 the average of your last few years pay. Social security might cover another portion but you’re still left with a gap.
Annuity plans are not for everyone and the fees for a 403b are no where close to 8%
Please offer a full picture before you make videos. Thank you
Yes, I have a question: what's the smallest percent that 403b is allowed to take away from your paycheck/earnings (including fees)?
I'm a substitute teacher and they offered me the 403b on Tuesday, but they said to give them my number to schedule an appointment. I'm glad I ran into you. Thank u!
bro imagine being a teacher… yikes
What if I retire with a choice of my income from the institution? For example, say I decide to lower my 1FTE salary to have a lower tax bracket than the year when I started my 403b. There are options to reduce your salary voluntarily. If I don't retire at a higher pay scale, then it's all good. Isn't it?
I retired two years ago after 31 years teaching. I have a pension; however, I also started a 403b my second year teaching making $19K a year. I agree with the idea that the 403b is not that beneficial with a lower salary but here is the game- study the tax brackets each year and figure out where you will fall after the deduction (the taxable income). Basically if you make $40K and you are single, anything between say $39-83K is 22% tax after the $12K deduction so tax deferral cannot help much unless you make around $85K and are able to defer enough to stay in a lower bracket per se. The same holds true once you retire as the pension+any drawn funds are considered income and taxed on the bracket. There are plans that are better. Consider a ROTH savings account. You pay tax when putting money in but do not pay on accrued money or any taxes when you take it out. The money is "net income" and a better situation and you do not have to worry about tax brackets etc.
Roth 403b plans exist. Low cost options are available with no-load mutual funds with extremely low fees (no advice) or annuities with slightly higher fees.
Bottom line, saving makes sense! You must due your do diligence to find the right plan with the right investments.
There is such a thing called fixed index annuity !
This info was completely incorrect. National Life offers a Roth 403b with zero fees!!
That's why you get a roth 403b.
Yes all great. unless roth 403b is there also 457 may be good if you get pension if you get into the field early at 22 you may be able to retire at early 50s with pension and want that 457 to not have to wait till 59 1/2 or mess with the rule of 55 in 401k. So many ways but forsure go roth if you can. More people need this info
Hmmm, not the best advice- Saving in a 403b, Roth IRA is good and is never bad. You will sleep much better at night as you grow your wealth and have years of salary saved up. Not doing so becuase of these reasons is not good advice.
Thank you for the info, I Thought all a teacher get was the trs pension fund.
First, I don’t agree that when you have a small paycheck, tax deferral doesn’t mean anything to you. Every penny counts and saving is never unnecessary. Second, you didn’t tell us where that 8% comes from. 8% of what? Third, doesn’t Roth 403b let you withdraw tax-free money when you retire?
Anyway, still give you a thumb up
Pension in my school district is 2.5% multiplied by years of service multiplied by the average of my yearly salary for the last three years of employment. So my annual pension is certainly not going to be more than my last year's salary.
I never paid any "fees" on my 403 b.
Am a nurse. My job offer roth 403b and regular 403b. I plan on going for my nurse practitioner in abt 1 year. So which one do you think i should pick. Thanks