A provision of the U.S. tax code

(called 403(b)) permits teachers to make tax-deferred investments for their retirement.
But insurance salespeople (usually calling themselves "financial planners" and sometimes endorsed by teacher unions) "con" teachers into paying large sales commissions and high on-going fees to pay for the same deferrals provided "free" by the tax code!
Unless a teacher is independently wealthy and therefore working only for personal satisfaction, an annuity is probably a very bad "investment" -- and may reduce the teacher's potential retirement nest egg by 25% or more.

Why would any financial planner

recommend a tax-deferred investment (such as an annuity) for an investment that is already tax-deferred? The answer is simple -- to line the pockets of the insurance companies and their sales staff -- with money that should be invested and growing for the teacher.

These insurance company "scams"

are promulgated by 1) ignorant and/or lazy personnel department staff, 2) uncaring school board members and 3) greedy teachers unions being "paid off" with large advertising budgets.

A 'Hold Harmless' Agreement

could be restricting your participation in the best of tax-advantaged retirement plans. Learn how insurance companies hoodwink school 'benefits' department staff with so-called 'Hold Harmless Agreements'.

Many are concerned

Some teachers (and others interested in this subject) are participating in the development of web sites to help colleagues avoid high cost retirement programs. In December of 1997 we posted this web page to help others make good decisions. Tell any participant how you like it. We hope you will feel free to join us if you believe you have something to offer.

To learn more about this situation

read these articles Fighting for 403(b) Funds in the September 1997 edition of Kiplinger's Personal Finance Magazine. Much of the information therein was provided to Kiplinger's by Grant MacLaren (webmaster of this site).

The mission of a site (run by Dan Otter and John Moore, two school teachers in southern California) is to help teachers about 403b investment decisions. This is it: www.403bwise.com

For Teachers, Object Lessons From the 401(k) by Richard Oppel
in the June 13, 1999 edition of The New York Times. Not very hard-hitting, so your webmaster has added his 'two bits' as clearly-marked comments.

Costly lesson for teachers by Kathleen Lynn
In a November, 1999 edition of The Record (Hackensack, NJ), the author describes the major problems most teachers face when trying to get a good 403(b) retirement plan.

Other excellent information:

Are we making progress? - - - Maybe!
"Bad Taste" appeared in the July 10, 2000 issue of
U.S. News and World Report.
"Shark Attack" appeared in the June, 2000 issue of AFT's
American Teacher
and
Scott Burns of The Dallas Morning News wrote this on 11 July 2000.

Dilbert knows what's going on! Check it out!

The Great Annuity Rip-off by Carolyn T. Geer in a recent Forbes pulls no punches. It's Forbes' February 9 cover story. "Don't be a sucker! Variable annuities are a lousy investment." is the cover's lead in. (We've posted it HERE.)

Jane Bryant Quinn's January 1998 "403(b) fees" article from the Washington Post. (We've posted it HERE.)

Jane Bryant Quinn's May 1998 "retirement planning information" article from the Washington Post. (We've posted it HERE.)

Andrea Rock's article in the December, 1997 issue of Money magazine.

Guy Halverson's article in the December 8, 1997 issue of Christain Science Monitor. (We've posted it HERE.)

Jason Zweig's article about TIAA-CREF in the January, 1998 issue of Money Magazine. (We've posted it HERE.)

Scott Burns writes for The Dallas Morning News. He's visited this page, and he knows the score on 'Variable Annuities.' Here's a link to his home page, a 'working collection of columns by Scott.

See the July 20, '98 Time magazine article reporting on a study by the U.S. Dept. of Labor confirming what we've been saying here for years.

Vincent D. Tate e-mailed us in December of '99, saying (in part): I taught in the public school system for over 25 years. I hold a Master's Degree in both education and finance. As a union representative in my district, I, too had become disillusioned and angered by the strategies of insurance companies trying to "steal" precious retirement money from unknowing teachers by attempting to sell them loaded annuities, etc. Those attempts, coupled with unwilling, unknowing, stubborn school personnel, motivated me to write a book on the subject of teacher retirement.

Janet Novak wrote in the Sept. 8, 1997 Forbes

''Be very skeptical of tax-deferred annuities. The capital gains cut (of 1997) makes what is often a borderline investment into a downright stupid one. Yes, annuities defer taxes. But they convert capital gains that would have been taxed at 20% into ordinary income taxed at up to double the rate.''

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