Brookline Educators Union

Town 403b Handout

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To Be or Not To 403b – Town Hall

Part I: Why You Need to Enroll in a 403b

  1. 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.
  2. Your 403b investment grows tax free: All earnings, dividends and capital gains grow tax free until age 70.5!
  3. 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!
  4. Pensions don’t come with a lifetime warranty: Three out of five retirees will outlive their pension assets.
  5. 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

  1. Go to the Fidelity Retirement Plan website: https://nbacctopen.fidelity.com/
  2. 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.)
  3. “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.
  4. 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.

  1. Go to MidAmerica website: http://www.spokeskids.com/photos/d6f37618.pdf
  2. Fill in the personal information and check the “Bi-weekly box.”
  3. 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.)
  4. 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 – odysseus7@comcast.net

November 15, 2018

Much Ado About Finances: PSLF

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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.

https://studentaid.ed.gov/sa/sites/default/files/public-service-employment-certification-form.pdf

(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: odysseus7@comcast.net

 

 

 

 

 

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

Ch-ch-ch-ch-changes
Turn and face the strange
Ch-ch-changes

 

Roth IRA Workshop, April 26th

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Roth IRA Enrollment Workshop: Thursday, April 26 at 3:00 pm in the Pierce Faculty Room

Reasons for Establishing a Roth IRA:

  • Portability – If you choose to leave the PSB for another school district or even change careers, you can continue contributing to the Roth from anywhere in the world.
  • Profitability – A 30 year old who contributes $3,000.00 each for thirty years will amass the tidy sum $340,000.00 by age 60, assuming an 8% rate of return.
  • Tax-free stream of income – You don’t pay a penny in taxes when you withdraw money from your Roth in retirement and it never impacts your tax bracket.
  • Flexibility – You can withdraw funds for a home down payment and make penalty-free withdrawals for postsecondary education expenses

Cut to chase enrollment: You can fill out Roth IRA enrollment form for either Vanguard or Fidelity before coming to the workshop to speed up the process. I’ll walk you through the investment choices and answer any questions.

https://vanguard.com/pdf/0071.pdf

https://accountopening.fidelity.com/ftgw/aong/aongapp/accountSelectorEntry#1524433605649

Bob Miller, BEU Financial Consultant: odysseus7@comcast.net

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