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Teacher Story: Annie, age 25, uses AXA - has 3 low cost choices available

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Hey All,

We are launching a new feature called "Teacher Stories." We just went live with our first one. Annie is 25 and teaches in San Francisco. You can read her "story" here. Fiduciary advisor Scott Dauenhauer, CFP® has posted his feedback below.

If you would like to share your "Teacher Story" click here.

We look forward to your comments and participation. - Dan

Note: If you are new to the Discussion Board and would like to post a comment, you can register to post at the top right. 


Scott Dauenhauer, CFP® responds to Annie's "Teacher Story"

First, congratulations on saving in a 403(b). Believe it or not, the vast majority of teachers are not currently saving in a retirement account. The rate of teachers under 30 who are savings is even lower. You are building a great money habit.

I understand that you work in the San Francisco Unified School District. In checking 403bCompare.com, a website run by the state of California, I see  that your school district offers three high-quality vendors: CalSTRS Pension2, Vanguard and Fidelity

One thing you can do to improve your current and future financial circumstances is to upgrade your current 403(b). Unlike an upgrade at a el or an airline, you don’t need any special status, you just need to fill out some paperwork. Companies like the one you currently have your money in charge high fees, which are often hidden. By upgrading to a high quality vendor, your account balance could be 60% larger over your career than if you stay where you. I encourage you to research those three companies. CalSTRS Pension 2 is run by the state of California. It was created to ensure that California teachers have access to at least one low cost vendor. You can learn more about CalSTRS Pension here. You can learn more about Fidelity's 403(b) here. You can learn more about Vanguard here.

All three high-quality vendors offer target date or target risk funds that will manage your money for you at a low cost. 403bwise has information on asset allocation and target date funds which you can access here https://403bwise.org/education/investment. If you need financial advice, you should get one from an advisor who is a fee-only fiduciary. Here is some general information on working with an advisor. Here are three resources for finding fee-only Certified Financial Planners XY Planning Network, Garrett Planning Network, and the Fee Only Network. Always get in writing from your advisor that they are a fiduciary 100% of the time and they will always work to put your interest ahead of their own. You can use the 403(b)wise Fiduciary Pledge.

I know you have student loans, look into the PSLF program and keep up your payments, but always put something into that 403(b) (even if it’s just $25 per paycheck). You might also consider starting a Roth IRA. Here's is some general information from Nerd Wallet on the Roth IRA.



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