Wise Information for K‑12 Employees

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Education
Advocacy

K-12 Story: Sold a TSA

It was a typical day of my first year of teaching. I was eating lunch in the teacher's lounge with my colleagues. I noticed a woman sitting in the center of the room offering snacks and retirement advice. Being a new teacher and quite young, at only 22, I was very interested to learn about investing. So I made an appointment to meet with her one-on-one. Needless to say I was very excited and feeling quite responsible and mature! During the meeting, she had me take a survey to measure my comfort with risk. At this point in time, I only knew two things about investing: starting young is awesome and young people can handle more risk. So I told her I was quite comfortable with higher risk. She went on to discuss the tax benefits of a TSA, we discussed how much I could afford to contribute, I signed some forms, and that was that. I was saving for retirement!

It was probably about two years later that my boyfriend started bragging about how wonderfully his 457(b) retirement savings were doing. I pulled out my account statements and was shocked to find that I was earning very little, right around 3%. I could not understand what I was doing wrong. After some internet research, we found an LAUSD group that discussed 403(b) issues spearheaded by Steve Schullo. I attended a meeting, shared my experience, and realized I was not alone. I also realized that there were good options for retirement savings out there, and I just had to look! I purchased books on investing, checked out websites like 403(b)wise and 403(b)compare and started to learn more about my options. I subsequently withdrew my money from the TSA, with a penalty of course, and started investing in mutual funds.

I later had the opportunity to share my story in an article for the Los Angeles Times.

Now 11 years later, I am quite happy with my retirement savings. I still have a lot to learn but I feel quite confident that I can do a better job than a sales representative. I also try to help inform any teachers I meet that have had similar experiences. The general consensus is that it is just too complicated and the advice of "professionals" is required to succeed. I have found that a little bit of knowledge goes a long way!

Crystal is a Los Angeles area teacher.