Think Your Retirement Plan Is Bad? Talk to a Teacher - The New York Times

Think Your Retirement Plan Is Bad? Talk to a Teacher - The New York Times:

Think Your Retirement Plan Is Bad? Talk to a Teacher

Schoolteachers and others who pursue careers of service in exchange for modest paychecks get lightly regulated retirement plans that often charge excessive fees.

Margaret Jusinski first got to know her investment broker through the breakfasts he provided when he visited her public school in the leafy suburbs of New Jersey, where she teaches middle-school children computer coding and how to build robots made of Legos.

After the bagels, muffins and coffee, the broker made his sales pitch — and Ms. Jusinski bought it. So did many of her colleagues.

The teachers only recently learned how much those meals actually cost them.

Had she been able to choose a simpler, less expensive plan instead of the broker’s costly offering, Ms. Jusinski would have approximately 20 percent more in savings, according to an analysis performed for The New York Times. One colleague would have a balance 50 percent fatter. The list goes on.

“It is a heartbreaking situation for everyone,” said Ms. Jusinski, a mother of two girls who turns 50 on Sunday. “Especially for the staff members who were looking to retire within the next few years.”

Most Americans who save for retirement at work have 401(k) plans, which are generally offered by companies and must by law provide a mix of prudent investment options. But millions of Americans — public school teachers, clergy members, employees of religious institutions or nonprofits, and some charities — are not offered 401(k)’s. Instead they typically must rely on what are known as 403(b) plans, many of which are Think Your Retirement Plan Is Bad? Talk to a Teacher - The New York Times: