In my last blog post I walked you through how to gather a list of your 403(b) vendors offered at your school. If you didn’t already do so, check out this blog post (#1 in my 403b SLP blog series) to get started.
Take a look at your vendor list and see if you have any of these vendors listed –
- Vanguard, Aspire Financial Services, Fidelity Investments (NOT American Fidelity), T. Rowe Price, or CalSTRS. If you have any of these options, you’re in great shape! These vendors are considered to be top of the line due to their low costs and great reputations.
Now that you have your vendor list, let’s do a little research before you take your next steps.
I gave you a really basic definition of what a 403(b) plan is in my last blog post. Now we need to go a little deeper. Here’s a list of some great resources to give you a bit more background info so you have some general knowledge and a bit more understanding moving forward.
1. Don’t go anywhere until you check out this webpage from the 403bwise website. Read it, read it again, and bookmark it for future reference. This resource really gives you all the basics that you need to know.
2. Check out the Teach and Retire Rich podcast. I listened to this on my commute, when I was cooking, when I was cleaning, on walks, whenever I could pretty much (and I still listen to every episode they come out with). The podcast is invaluable and you will learn SO MUCH from Dan, Scott, and all the guests they interview. It’s a great passive way to really build your wealth of knowledge on the subject.
3. Play around with some 403(b) calculators to see the different outcomes that various changes could make. You can alter your remaining years of service, how much you contribute, your fees, etc. It’s really eye-opening to see the impact of seemingly small changes. Many annuities charge over 2% in fees, where vendors like Vanguard may charge .2% or Aspire may charge .3% (cost of their fee + cost of mutual fund). Check out the difference between 2% and .2%. You will be FLOORED!
Once you feel like you have a general idea about what 403(b) plans are, you’re ready for the next step.
Join the 403bwise Facebook community and share screenshots of your vendor list. Joining a Facebook group isn’t necessary for securing a good retirement plan, but boy is it helpful! The group is private so only members who are in that group will see your posts. Your other Facebook friends will not see anything you share there unless they are a member of the group as well. You can share your vendor list and ask if anyone has any suggestions if you’d like. If you have any of the vendors mentioned above, they’ll probably tell you you’re in great shape. Even if you have a few of the options listed above, there are key differences with some so it’s great to chat with other people who have experience in this field. I think I posted to the Facebook group multiple times a week for a month straight when I was first learning lol.
Okay, now you’re going to be an expert!
If you really want to take your learning to the next level, attend some of the 403bwise virtual events! They are small-group Zoom sessions that are interactive and super informative. One of the best parts is the open question forum at the end. They use Nearpod to make the events interactive and at the end there is a part for people to post anonymous questions. This is SO helpful! Before one event, my husband told me to make sure I give other people an opportunity to ask questions LOL. He knew I was a bit over-eager 🙂
This was all going too well, right? You were doing your homework, joining groups, listening to podcasts, and signing up for events!
But hold your roll, friend. You may have noticed that you don’t have any of those good vendors on your list, and that could be a MAJOR problem.
Remember when I said joining a Facebook group wasn’t necessary for getting a 403(b) plan, well, I kind of fibbed. It’s really not necessary, but if you don’t have any good options on your school’s list, you’re going to need a team of people behind you to help you advocate for better options. How else are you going to assemble said “dream team”? I have no idea. All these people are just waiting in that Facebook group. Create a fake burner account if you’re really that opposed to putting yourself out there 😆. Do whatever you need to do to educate yourself. You need smart, experienced people behind you if you want to lobby for better options. (more on that in my next blog post)
If you DO have one of those options, great! You’re halfway there!
You still need to do your research. Follow the suggestions above until you feel comfortable making a decision on which vendor to choose. This is really important! Email HR and ask for information on how you can sign up for a 403(b) or 457(b) plan with XYZ vendor. They will likely send you some paperwork and a payroll deduction form, and then you’ll be on your way. Depending on which company you go with, make sure you know if they use advisors or if you are on your own for picking your funds. Google mutual fund/403(b) asset allocation based on age or desired risk level. Educate yourself on asset allocation so you know how to do it yourself or so you understand what an advisor is talking about when you discuss this aspect. Be sure you get ALL the information about fees, commissions, and costs. Ask to see the prospectus or contract and read it thoroughly before signing it. If you have any questions, ask in the 403bwise Facebook group. You can learn more about this on www.403bwise.org or through a quick Google search.
So this week’s Calls to Action are:
- Join the Facebook group!
- Play around with a 403(b) calculator
- Don’t let analysis paralysis hold you back! (“Analysis paralysis – when overanalyzing or overthinking a situation can cause forward motion or decision-making to become “paralyzed”, meaning that no solution or course of action is decided upon.” Don’t let the overwhelm hold you back! Set aside time and just get started.)
- Check out the next blog post, #3 in the 403b SLP blog series, to learn more about how to advocate for better 403(b) options. (*Coming Soon!*)