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Gina NY

choosing a 403b plan

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19 hours ago, Gina NY said:

I have the form but thought I would wait until Aspire approves everything.

Gina, that makes sense. Good Luck. Once your in, it will be your duty to spread this knowledge to others you know in education who have also been confused by the often confusing 403b trap!! We all need to spread the truth to others so the crap going on in 403b land comes to an end and teachers and other employees are not cheated any further. You can rest assured you are not being taken advantage of invested with Vanguard.

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Gina,

Send the form over now so you don't forget. Just include a note that it's in the works now. That could even be part of the 'approval' process.

Congratulations- you should be very proud, I agree!

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3 hours ago, Gina NY said:

We also received this notice form our union president. Do you know what it means? 

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A 457 plan is very similar to a 403b with slightly different rules on when you can take out the money for retirement.

When he or she wrote: "This will remove any obstacle or concerns members may have about retiring with limited time." Sounds like a "catch-up feature." Catch up is already allowed by the IRS you can shelter more than the max allowed if you are over 50, but offering an addition plan would increase it big time. You are allowed to participate in both and invest the max in each plan. I had two plans for the last couple of years at my district, but I never used the 457b because I could not afford to save using both the 457b plan and the 403b. In fact, I could not afford the max just in the 403b! 

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It looks like your district is offering a “25% retirement incentive” to their employees who qualify for it. This is sometimes referred to as a “golden handshake”. The union and the superintendent have set up a 457 plan that can receive that 25% as well as cashed out sick leave. Otherwise the retirees would have to pay income tax on these moneys. Ouch! It could be a 457 plan available to all employees, although I think it’s more likely one set up for just this one purpose. The justification for encouraging employees to retire is to reduce the number of the most expensive employees, replacing them with young  inexpensive employees.

My district didn’t offer an incentive, just lowered the number of years employment required to retire to 15, and the minimum age to 50. The offer only existed for a year. I took it and went sailing!

You should ask your union about the NY state 457 plan! It’s outrageous that it’s not available to all district employees!

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3 hours ago, krow36 said:

You should ask your union about the NY state 457 plan! It’s outrageous that it’s not available to all district employees!

Thats my thought exactly. 

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