To Be or Not To 403b – Town Hall
Part I: Why You Need to Enroll in a 403b
- Save almost $500,000: A 25 year old teacher who invests $100.00 per paycheck for 35 years, and assuming an 8% return, will accumulate almost $500,000 by age 60.
- Your 403b investment grows tax free: All earnings, dividends and capital gains grow tax free until age 70.5!
- It lowers your taxable income: If you earn $50,000 per year and contribute $5,000, you only pay taxes on $45,000, a possible savings of $1,000 a year!
- Pensions don’t come with a lifetime warranty: Three out of five retirees will outlive their pension assets.
- You need a back-up plan: Over 40% of teachers leave the profession before becoming eligible for a full pension.
Part II: Enrolling in a Fidelity 403b Retirement Plan Today
- Go to the Fidelity Retirement Plan website: https://nbacctopen.fidelity.com/
- Fill in the personal information including Brookline’s Plan #, 50049, and establish an account Log On. (If you have a question, please refer to my completed enrollment form.)
- “Choose Investments:” Option #1: A Target Date fund, FFFHX, is a mutual fund that is based on your projected retirement year. If you’re 30, you might select Fidelity Freedom 2050. The other option is to select a balanced fund, FBALX, an all-purpose investment fund that contains stocks, bonds and cash.
- Keep a copy of your completed enrollment form for your records.
Part III: Completing a Salary Reduction Agreement
The PSB employs the services of a MidAmerica, a TPA (Third Party Administrator) who processes your salary withdrawals. You will need to complete a one page Salary Reduction Form and indicate how much you want deducted from each paycheck.
- Go to MidAmerica website: http://www.spokeskids.com/photos/d6f37618.pdf
- Fill in the personal information and check the “Bi-weekly box.”
- Fill in your investment provider, Fidelity, your desired salary reduction and Brookline’s Plan #50049 in the Account# column. (If you have questions, refer to my sample form.)
- Fax the completed form to MidAmerica: 863-688-4466. Keep your own copy, wait three days and contact them to verify that they received the completed form.
Bob Miller: BEU Financial Consultant – firstname.lastname@example.org
November 15, 2018