New Teachers Beware
September 6, 2025
In fall 1992 I was a first-year teacher. I'll never forget the excitement, the nervousness, and the fear I felt. I couldn't wait to meet the students. I was nervous about the challenge of being a teacher, and I feared the challenge of taking on a 4th grade/5th grade combination class. The students were amazing. Teaching two grades anytime, especially for a first-year teacher, was brutal, but what I didn't expect was to be targeted by a billion dollar industry.
"Do You Care About Your Financial Future?"
I've told the story many times and I'll tell it again as a warning to new teachers. Several months into the job, the students had left for the day and I was at my desk desperately trying to get ready for the next day's instruction when a woman appeared at my classroom door. I'll never forget what she said: "Do you care about your financial future?" What a question. There is only one answer: Yes. She took that as an invitation to pitch financial products I had no idea about (high-cost investments) in a retirement vehicle (a 403(b) plan) I had never heard of. Luckily I didn't sign up. Most teachers aren't so lucky.
The "Financial Planner" in the Lounge
At countless schools across the country new and veteran teachers alike will be sold an illusion. They will think they are signing up with a financial advisor to ensure their financial future. Yes they will be putting money away. Yes it will most likely grow over time. But no they are not working with a financial advisor. They are working with (for?) a sales person peddling high-cost financial products that will lose thousands and thousands of dollars to unnecessary fees.
One Chart Says It All
Two percent in fees may not seem like a lot but a teacher who saves for 25 years in an investment charging 2% in fees will lose 40% of their returns to fees. Contrast that with the educator who pays only 0.05% in fees over the same time period. They lose only 1% to fees.
A Better Way
In a perfect world school districts would only offer one low-cost firm that employs salaried employees who educate staff about how best to save for retirement. We are not in that world. The next best thing to do is to self educate. I know that new teachers, indeed all teachers, are extremely busy right now. But your future self will thank you. At age 60, I am so glad that my 27-year-old self was wise enough to avoid the sales pitch and wise enough to self educate himself about saving for retirement. It has been a $1 million decision.
Checklist for Getting Wise
- Listen to Learned by Being Burned to find out how educators around the country got wise to saving for retirement
- Read through the 403bwise 403(b) Basics
- Get wise to the Basics of Investing
- Check out our School District Plan Rating Project to learn how we rate financial companies and if we have information about your specific district
- Join the 403bwise Facebook Group to be part of a twenty-thousand-member community working to help each other make wise savings decisions
Checklist for Getting Wiser
- Read the Psychology of Money by Morgan Housel
- Read Mind Your Money by Yanely Espinal
While not an exhaustive list, the teacher in me is certain you will find these learning materials highly engaging. Good luck. Embarking on the journey to get financially savvy will pay off in countless ways.
Stay wise and well and never stop learning. Your future self will thank you.
