#schoolofpersonalfinance #403b #personalfinance #403b vs 401k #financialfreedom
A 403b plan is a retirement plan used by non-profit organizations, public school districts, certain religious groups, certain hospitals, and government organizations. It works very similarly to a 401k plan. For example, your contributions are made pre-tax and are payroll deducted, the funds grow tax-deferred during your working years and then withdrawals are taxed as ordinary income in retirement.
A major difference is most 403b plans use an annuity contract (Tax Shelter Annuity), which is provided through an insurance company. A big problem with these annuity 403b accounts are the fees. Most people have no idea how much they are actually paying in these accounts because it is hidden very well. If you currently contribute to a 403b plan your homework assignment is to go figure out how much in actual dollars you paid in fees over the last year.
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My company just started a 403b plan with Vanguard, it has a $90 annual fee. All offerings are Vanguard funds, it includes VTSAX and VFIAX. Unfortunately, no company match.
I am in a 403b fixed annuity making 1 percent. So I am losing money every year.
Appreciative of the KNOWledge.
Great video, if the school district indicates the same providers support the 457 plan is it typical for those expenses to be the same? Just trying to understand if the fees are provider driver or driven by having a 457 or 403B. Is there a concern with there being high cost annuities in 457 plans? Again, thank you very much. My wife is a teacher here in Connecticut and her school district has awful providers.
Invesco R shares will get your portfolio around 1.20% per year. Ask your advisor if he is willing to write Rs Instead of Cs. A good advisor will say yes.
I want out of my 403b with valic but don’t know what to do.
I have a 403b and retiring at 55 ,what can I roll it over in, to save the 20% tax , plus I wanna borrow from it to pay off some bills ,,,AM
what to do if you have money in this variable annuity-403b? stop contributing? transfer it and pay the surrender fee?
I work for a school district in California and the only plan that was offered to me was the following: 403(b) Tax-Sheltered Annuity Plan and within this contract, the money is invested in the following: Vanguard total stock, mid-cap, and large cap mutual funds. I did have a positive return in 2020.
This is hands down the best video for the explanation of 403b fees on YouTube. I'm sharing this with my teacher friends!
Thank you for breaking down the fees for each one. Awesome video.
Thank you so much for your explanation before I am going to enroll in TDA. I have one more question. I am working at NYC and it provides TRS TDA. This is the brochure https://www.trsnyc.org/memberportal/WebContent/publications/tdaBook (see page 3). It does not mentioned any fee. Is 8.25% guaranteed too good to trust?
Thank you for explaining about 403b. Basic and I appreciate you!
What if you can choose low cost funds like FXAIX (sp500) in your 403b? Thats pretty good right? Super low expense ratio
Thank you for helping explain this! I walked into my 403 B blind
How did you get started in real estate investing in different state? Price to high where I am.
Do you think you could do video on Federal Thrift savings plan ? Postal worker
Thank you for making this video! And for all of the others. Please keep them coming.
Thank you for this! It’s hard to find clear information for 403bs. I realize I’m in an 403b annuity with my current company. I’ve had it for 7 years. Can I transfer this to a regular 403b with another company and invest in index funds?
Your videos are definitely the best I have seen on YouTube on the topic of 403b's. It's just truly unfortunate that teachers are probably some of the most difficult people to educate about personal finance. I think it's one of the main reasons the profession of teaching is associated with poverty, when in reality we can have a bright financial future if we just spend a single week.. a single DAY.. researching our choices and decisions on our retirement investments – likely the largest financial decision of our lives. I'm making it a point to teach all of my coworkers about these things before the 403b salesmen get to them. It just breaks my heart that not everyone is willing to look into these things.
When there are 3.5 million public school teachers in the country, and the highest-viewed YouTube video on 403(b)s has only 35k views, it really speaks to WHY so many teachers are signing up for these annuities that rob them of their retirement. You are doing good work here, man. I'm going to be sending some of your videos to some of our new guys we are getting in next year and showing them their options (mainly Vanguard, as you know) in person!
I'm also going to be posting my own video on teacher retirement strategies pretty soon. I'd be pretty cool if you could watch it in the next couple days 🙂
I miss the days when I had a 401(k) with matches and now I have a 403(b) with a school district and I read years ago about the high fees. And, yes, they are no where to be found on the statements.
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