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Broker Check

For Teachers and School Staff

It’s your money

While thinking about the fees you are charged in your 403(b) plan may not be at the top of your to-do list, there’s an important reason to pay attention.

403(b) plans are not free; in fact, you pay fees every day.

Over the course of time, higher fees can erode your supplemental retirement nest egg.1 For example, let’s assume:

You made annual contributions of $2000 a year ($166.67 per month) earning 8% a year compounded monthly

Over the course of 35 years, you would see your investment of $70,000 ($2000 x 35 years) grow to $382,321.

Now, let’s assume that fees, charges and expenses, estimated conservatively at 1% a year, were subtracted from your investment return:

In effect, you would be earning 7% a year, compounded monthly for the same time period, with all other assumptions being equal.

The result: over the course of 35 years, the impact on your return of an additional 1% in fees, charges and expenses would lower your return by $82,140.
For most of us, $82,140 represents a significant amount of money that is too big to overlook. To avoid the scenario above, it is important to know what you are being charged.

Ask yourself…

…Why your school district constantly looks for the best value for all of their other benefit programs. Yet, when it comes to the district’s 403(b) plan, it does not undertake any fee or plan design comparisons.

Through its buying power, your district can negotiate lower fees, better plan designs and more diverse investment options – for the benefit of all concerned.

The Wise Choice for Educators® 403(b)/457(b) can possibly deliver lower fees, eliminates surrender penalties and increase investment options – all without costing the district any additional tax payer money.

We understand your retirement needs: The Illinois Public Pension Fund Association is made up of public sector employees like you. That’s why we built the plan to be in your best interests instead of the interests of insurance companies or sales people.

1Based on simple savings calculator from http://www.planningtips.com/cgi-bin/savings.pl