No where to turn for 403b/TSA help? We know the feeling! We had to do it ourselves; we’re sharing with you the fruits of our labor.
A. We are LAUSD teachers, educators, audiologists, counselors, psychologists and administrators; we are NOT financial planners nor investment counselors. B. We have learned some basics of investing and from experience about planning for our retirement. We have done a pretty good job managing our own 403b retirement planning and we want to show you how easy and fun this is. C. This brochure has been developed to help clarify and simplify the process for our colleagues.
WHY SHOULD I SET UP A 403B RETIREMENT ACCOUNT? 1. Unless you plan to teach until you die, you will have years to enjoy yourself after you retire. You will need money to pay on-going bills and maintain your current lifestyle. 2. The mass media has said it over and over again, that Social Security and pension plans will only provide us with a small amount of money to live on each month. As the cost of living increases (inflation), the money we will need to live on as comfortably as we do now will increase. We will need to supplement CalSTRS.
3. Most importantly, the money you contribute to your 403b account is money that is tax deferred. It is deducted from your paycheck before federal and state income taxes are withheld. We pay less in taxes and more money goes to work for you now. For example, you may be putting $500 into your retirement account with each paycheck, but the deduction in your net pay (money on your paycheck) may be about $450. DO I NEED A FINANCIAL PLANNER? You are a professional. You know how to make phone calls and decisions. You know how to obtain, fill out, and send in forms. Financial planning your 403b takes about as much time and effort as the planning and effort needed to purchase your home or your car. Remember we are only talking about 403b. Life and home insurance needs, estate planning, disability insurance, etc. do require the assistance of a financial, insurance or estate professional. The only people who say YOU need help with 403b are the expensive sales forces that are commission driven and all too often, selfserving. If you are paying for financial service and continue to use an adviser, that’s fine with us. It’s your money. Our concern is that the majority of educators truly feel that the nice TSA man or lady in the cafeteria or at the UTLA area meetings does this service for free. This is absolutely false! It is your right to know what you are paying in fees. HOW DO I BEGIN? 1. Call LAUSD’s deduction control a 213 633-7380. Ask them to send you the list of vendors to which LAUSD allows teachers to contribute their 403b retirement money. 2. Select one fund from that list (see the next section for hints on how to select the fund that is right for you). 3. Call the company (toll-free numbers may be available at 1-800-555-1212). Tell them you are a LAUSD employee and that you want to start a 403b account with them.
4. Follow directions carefully by sending some of the forms to the company and the others to LAUSD’s deduction control. HOW DO I SELECT A FUND? 1. Avoid the TSA and loaded (commissions charged) mutual funds absolutely. 2. All members of 403bAware use any of the following four companies that charge the lowest fees and no commissions (“no load”): 1. CALSTRS 403(b): 800-228-5453 2. USAA: 800-531-8183 3. Fidelity Investments: 800-343-0860 4. TIAA/CREF: 800-842-2888 Compare the costs of each fund on the just launched CalSTRS website http://www.403bcompare.com or at http://www.morningstar.com. 3. Select one company and call for the forms. LAUSD does not allow for you to invest in multiple companies. FILL OUT THE FORMS The company will send you the forms needed to establish your 403b retirement account. If you have any questions about filling out these forms, ask that company to help you. 403b Reform: OUR SUCCESSES TO DATE 1. Had the District designate “403b” on our paychecks instead of “TSA” so teachers are not mislead into buying only tax sheltered annuities. 2. Published articles in the United Teacher (UT) monthly newspaper (from a motion passed by our 403b Aware). 3. Established an on-going dialogue with a LAUSD Board member—David Tokofsky. 4. Established on-going dialogue with key UTLA leaders. 5. Shared information with LAUSD administrative and human services personnel for methods to improve our fund choices as well as to simplify the process to increase our annual contributions.
6. Present workshops throughout the year to help individuals establish their own retirement accounts (see contact information at the end of this brochure). 7. Lastly, we have a nest egg to supplement our CalSTRS retirement benefit. 2004-2005 GOALS - Volunteers needed! 1. We need to put pressure on the current UTLA leadership to adopt a “union approved” low fee, no load 403b vendor. (All “UTLA approved” vendors charge higher fees than the vendors listed on this brochure. Nothing illegal, but our members don’t know this seemly innocuous fact, and they should. Maybe they don’t want to pay those higher fees). 2. We need to simplify the paperwork needed to increase our contributions to our retirement 403b accounts annually. 3. We should look into establishing a 403b committee at UTLA. 4. We will continue to publish a 403b column in the UT newspaper. 5. We will present 403b workshops/dialogue, offer speakers at school sites, annual leadership conference in Palm Springs sponsored by UTLA. 6. We will provide stock counter display racks at LAUSD personnel offices and UTLA foyers for flyers and or brochures about 403b contributions and workshops. 7. We should write letters to UTLA candidates who are running for UTLA office positions. 8. And please attend one of our regularly scheduled 403b meetings. BOOKS WE’VE FOUND HELPFUL 1. Teach and Retire Rich, a new book by 403(b) wise founder Dan Otter. 2. Common Sense on Mutual Funds by John Bogle. 3. What Wall Street Doesn’t Want You to Know by Larry Swedrow. 4. The Riches Man in Babylon by George S. Clason.
WEBSITES WE’VE FOUND HELPFUL www.403bwise.com (the best 403b site in the country run by teachers Dan Otter and John Moore). Information/Q&A discussion forum. www.403bcompare.com (This website managed by CalSTRS was a result of a new state law AB 2506). Information about vendors. www.tiaa-cref.org LAUSD approved, non profit 403b vendor with a social responsible fund. www.fidelity.com LAUSD approved 403b vendor www.vanguard.com Non profit, Low Fee Vendor. Unfortunately, Vanguard is not on the LAUSD list of vendors. But you can transfer money from an approved LAUSD vendor to this great company. “Money Talk” RADIO SHOW each weekend. Bob Brinker - KABC (790 AM) Sat. & Sun. 4 - 7 p.m.
MORE MONEY FOR YOU AND ME!
403b
Retire in the manner to which you’ve become accustomed!
CONTACT INFORMATION about our monthly 403b Aware Group Informational Meetings: Steve Schullo: sschullo@lausd.k12.ca.us Steve’s Cell: 323-229-2365 Sandy Keaton: ksandy@lausd.k12.ca.us Joe McDonald: jh4md5@hotmail.com 2005 403b Aware Future Meetings
February 17th March 17th April 21st May 19th June 16th All 3rd Thursdays about 4:30pm Location TBA Email Steve, Sandy or Joe for details. NOTE: The information provided in this brochure does not represent or reflect the opinions of UTLA.
403B AWARE Group
is a group of LAUSD educators presenting objective 403b information to LAUSD educators to consider in planning for retirement.