Student Loan Workshop
Town 403b Handout
Enrolling in Your 403b: June 2021
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 62.
- 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 or Vanguard 403b Retirement Plan
- 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. (If you have a question, please refer to my completed enrollment form.)
- “Choose Investments:” Option #1 – Help me manage my investments: Select Target Date fund, a mutual fund that is based on your projected retirement year. If you’re 30, the enrollment form default will be the Fidelity Freedom 2050 Target Date Fund. The other option is select I’ll manage my own and 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 or increasing your contribution
TSA Consulting Group
Follow Instructions for “Online Enrollment Process”
Bob Miller: BEU Financial Consultant – firstname.lastname@example.org
Much Ado About Finances: PSLF
A follow-up to the Finance Article from the March 2019 BEU Newsletter:
Much Ado about Finances
The PSLF Formula for Loan Forgiveness or How to Join the 1% – At first glance, who wouldn’t be discouraged from applying to a loan forgiveness program that’s so “exclusive” it only accepts 1% of the applicants. That’s exactly what happened when the first cohort of borrowers became eligible for PSLF in 2017. Only 1% or 99 of the approximately 28,000 borrowers who applied managed to get their loans discharged. (See MarketWatch article; https://www.marketwatch.com/story/this-government-loan-forgiveness-program-has-rejected-99-of-borrowers-so-far-2018-09-20)
Yes, the process for PSLF loan forgiveness is about as straightforward as a labyrinth and, unlike the labyrinth in Greek mythology, there’s no Ariadne thread to guide you to the exit. It’s an admittedly complex and confusing 10- year- long journey with a long list of specific requirements.
Keys to Successfully Navigate the PSLF Labyrinth
“…they just sort of have this vague understanding that after ten years my loans go away. They haven’t done the research to see that it’s an actual program.” Betsy Mayotte, president of the Institute of Student Loan Advisors.
If there’s one common denominator for the 1% whose loans were discharged, it’s their detailed and systematic approach. This cohort of borrowers did their “research” about the program, verified their eligibility, didn’t rely on their loan servicers for information and kept ridiculously detailed records. (I’ve recommended storing all records for ten years in a fire proof box!)
- Is Your Employer Eligible – If you’re a full-time, PSB educator, you’re eligible!
- Do You have Direct Loan(s)? – You must either have a Direct Loan or a Direct Consolidation loan. (You can use the NSLDS website to verify your loan type.)
- Are You Enrolled in an Income-Driven Plan? – You must be enrolled in an income-driven plan with a 20 – 25 year repayment schedule.
- Have You Made 120 Payments – You must make 120 on-time payments over 10 years!
- Have You Submitted an Employment Certification Form? If there’s one key to success in obtaining PSLF loan forgiveness, this is it! When you file this form, you can confirm that you’re both on the correct path for loan forgiveness and the exact number of qualifying payments.
(Keep copies of all submitted Employer Certification Forms and the Response letter.)
- Have you dotted your ‘i’s and crossed your PSLF ‘t’s? – An unconscionable 28% of PSLF applicants were rejected due to an incomplete application.
Ariadne at your service – If you have any questions or concerns about your PSLF application, I encourage you to contact me: email@example.com
Market Rebound in 2019 –
If you can keep your head about you when all about you are losing
Are losing theirs and blaming you……
Nice to see the portfolio, which closed the year at 954K, ended the month of January at 992K capturing some of the losses from the steep December downturn. When examining the NorthStar end of the year numbers, it’s important to realize that in December the market was on track for the worst start since the Great Depression! (The S&P was actually down 9% for the month!)
Taxes in 2019
* The PSLF program was initiated in 2007 and required eligible borrowers to submit 10 years or 120 payments under an income-driven repayment plan.
David Bowie – Changes
Turn and face the strange