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.

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!

Good vid, very informative . Dope music at the end

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.

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 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 ? I

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.

Great video!

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)

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.

we have a Roth version and it has a Vanguard self directed accounts with unlimited low cost options.

Helpful information. Curious... Can a 403B be cancelled /closed and transfered to an IRA ... Without tax penalty?

Appreciate the video... How does a matching contribution by your school district alter your opinion of 403b for new teachers? Thanks for the video.

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

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

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?

Thank you for the info, I Thought all a teacher get was the trs pension fund.

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 signed up for a 403b through my school district. I got a 20 page contract, but I can't seem to find any page that shows the fees.

Yes, I have a question: what's the smallest percent that 403b is allowed to take away from your paycheck/earnings (including fees)?

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 have 403b at work the company match what i put on my retirement. My question is IUL is it better that ira or 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

My Roth IRA is maxed out, and thanks to a mortgage I hold I currently owe over $1,000 in taxes. Might a 403(b) (if I can get one without high fees) be suitable for me in order to avoid a 4-digit tax bill?

I agree with everything in your video about teachers and 403bs. Your video is only a brief introduction in my opinion. You forgot to mention another extremely important point that you may not even know about for several reasons. You are young and you may not have looked in the latest Medicare booklet. If a person goes over a certain amount of income when he reaches 70 1/2, when distributions from 403b=IRAs must begin, one must pay more for Medicare B, prescription drugs. There is also an income adjustment if one goes over a certain amount. For 2016 if a single person went over 85,000.01-107,000.00 in income one is charged for having income over 85,000.00. This is difficult to locate in the Medicare booklet but it should be there. Medicare will adjust one's income each year for what Medicare calls the Modified Adjusted Gross Income or MAGI. There are tiers of income for singles, married, head of households etc. Each tier will charge you higher fees for having a MAGI. Most mutual funds charge fees but some are known for low fees such as Vanguard. There are others such as Fidelity, Charles Swab....I recommend Vanguard.

I know it's difficult to know every product out there, but there are annuities without fees. Also, having a ROTH does not guarantee income and does not guarantee NO LOSSES like a fee-free indexed annuity.

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?

I don't pay fees on my 403b ???

How about if my district matches 100 bucks a month for my 403b? Wouldn't it be free money I shouldn't pass up on? I mean, over my career, we are talking thousands of dollars.

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

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.

So I just started as a first year teacher making $53,000 I did the math and that comes out to $35 an hour for 8 hours a day, 185 school days.

There is such a thing called fixed index annuity !

I found out my 403b has over 2% in fees!!! It sucks because it has like $75k now. Good news is I have a Roth version available through Vanguard. Time to roll it over!!!

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.

That's why you get a roth 403b.

You are combining Variable Annuities with Fixed Annuities. FIA have surrender charges and a guaranteed floor no lower than Zero, so it doesn't diminish your funds. And yes there are surrender charges, but they don't matter if the person is investing long term...plus they usually have a 10% free withdrawal. So with Fixed Annuities, you only pay a fee if you withdrawal early, and it is on the funds over the 10% free withdrawal amount.

Now you tell me!!!!

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 .

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.

If I retire after less than 45 years of service, I will not make more than I was earning my last year. Not even close.

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

I actually make good money

A lot of misinformation here. The advice does not apply to most teachers. In NYC we have a 403 B with a fix option of a guaranteed 7% and a variable one that has averaged over 12%. Also, our pension is definitely not more than our salaries. I make close to 130k as a 22 year teacher, when I retire at 25 years my pension will be approximately 65,000. If I leave now there will be a steep penalty and my retirement income will be 40k. Most teachers don't make it to retirement. They tend to leave early.

Why narrow your video to just teachers? Second, what if your employer matches up to 19k a year? Is it worth it then?

Retired teachers are some of the wealthiest retirees in the country.

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.

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.

bro imagine being a teacher... yikes

There is nothing wrong with a 403b retirement account. Telling people to "avoid" them is just daft.

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.

This info was completely incorrect. National Life offers a Roth 403b with zero fees!!

My 403b is a Roth. So point one is out.

I never paid any "fees" on my 403 b.

THROUGH MY SCHOOL DISTRICT, I PAY $ 4/YEAR

Rubbish. This is another example of why it's foolish to go on KZfaq to get financial "advice." Your first reason against a 403(b) is unintelligible (you shouldn't get in the habit of saving with a tax-deferred account because you don't have a lot to save or be taxed on your salary?). Secondly, it's patently false that fees on the instruments inside of 403(b)'s can reach 8% - that's ridiculous (maybe with a variable annuity, but that's a market investment product). And annuity salespeople are not paid from the funds invested from a client, this is an old false canard that displays real ignorance. And I wouldn't be surprised to see Maserati's these days driven by the "fee-managers" (wealth managers), some of whom (and I respect those who are credible and give good advice) who take their nice 1% per year forever from the client while convincing you to stay in mutual funds or the stock market no matter how badly they perform. So you begrudge how someone else is paid as being unseemly, when you're not at arms length yourself. And you suggest a ROTH instead of a 403(b), not even explaining that $20,000 per year can be placed in a 403(b) and only $6000/yr in a ROTH. A better strategy is to put a great deal into a 403(b), and put a safe vehicle into it like a flex annuity which can earn 3.5 to 8.5% with a floor - a contractual guarantee of no loss. And some of them now carry sizeable bonuses, too. As opposed to the stock market, which is averaging 15-21% losses across the board over the last year. And then add a separate ROTH IRA, that makes much more sense. Hundreds of thousands of 403(b)'s have funded a very substantial portion of teacher retirements over many decades, so you do a great disservice to educators in advising them against it. You're going to need better arguments than these three.