Teachers: Your Retirement Plan Overhaul Is Long Overdue


This series of articles in the New York Times has criticized the often shoddy and overpriced retirement plans foisted on public school teachers

Teachers may finally be getting the respect they deserve. A series of recent articles in the New York Times is pointing the finger at school boards and local governments for forcing teachers to put up with substandard and overpriced retirement plans.

Here’s the background:

Teachers have special retirement arrangements called 403(b) plans. They are similar to the typical 401(k) offered by a for-profit company, except they cover public school teachers and other non-profit workers.

But here’s the rub. In many counties, including several in South Florida, the only investment options available to teachers are high-priced, high-commission annuities, some with multi-year “deferred sales charges” that penalize you for taking your own money out.

Teachers are hustled by commissioned salespeople, some hanging out in the break room, using high-pressure sales techniques. “Teachers are still being preyed upon by salespeople,” said Dan Otter, longtime teacher and founder of the educational site 403bwise.com, who was interviewed in the New York Times series.

For many of the South Florida teachers we’ve worked with, their only choice was to participate in the plan and suffer from overpriced, under-performing insurance-based investments, or opt out of the plan and lose out on valuable tax deductions.

We first exposed the abuses in Florida teachers’ 403(b) plans back in 2012 (see “Are Government Workers Being Fleeced by 457 and 403(b) Plans?“).

Unfortunately, it sounds like many teachers are still getting a raw deal. We hope this New York Times series, which is extremely detailed and well-researched, prompts an overhaul of teachers’ 403(b) retirement plans.

We think everyone deserves access to high-quality, low-cost retirement accounts allowing them to set aside their own funds for a secure financial future.


Here are links to the entire series of articles, all appearing in The New York Times and authored by Tara Siegel Bernard. We encourage you to share these with teachers in your circle of family and friends:

Think Your Retirement Plan Is Bad? Talk to a Teacher

Even Math Teachers Are At A Loss To Understand Annuities

An Annuity for the Teacher – And the Broker

Answers to Questions About 403(b) Plans



About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!


No comments yet.

Leave a Reply