Why do so many 403(b) plans get a bad reputation?

In this episode of the Washington State Retirement Planning Podcast, we break down some of the biggest problems to watch for when choosing a 403(b) plan as a Washington State employee, especially if you're a teacher or work for a school district.

We discuss why some 403(b) plans are built around annuities, how surrender charges can lock up your money for years, and how limited investment choices, proprietary funds, and additional fees can impact your retirement savings. We also explain why simply seeing a provider on your employer's approved list doesn't necessarily tell you whether the plan is a good fit.

Then we shift to the other side of the equation: how to maximize your Plan 3 defined contribution account. We walk through the investment options available, including the Washington State Investment Board funds, self-directed options, cash and bond funds, large-cap, small-cap, and international investments.

Finally, we discuss the importance of balancing growth and protection as you approach retirement—and why taking too much investment risk with money you'll soon depend on for income can have a major impact on your retirement plans.

00:00 Why 403(b) Plans Can Suck

01:53 Common 403(b) Problems

03:41 Annuities & Surrender Charges

05:48 How to Maximize Your Plan 3

07:33 Your Investment Options

09:07 Choosing the Right Funds

12:42 Protecting Your Money Near Retirement

13:18 Final Thoughts

Links

1. ⁠⁠Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

Free Washington Retirement Planning Community and Courses

Should you use a Roth 403(b) instead of a traditional pre-tax 403(b)?

In this episode of the Washington State Retirement Planning Podcast, we break down how a Roth 403(b) works and why it can be one of the most underutilized retirement benefits available to Washington State employees.

We explain the difference between contributing pre-tax and after-tax money, why a Roth 403(b) can provide tax-free growth and tax-free qualified withdrawals, and why it's important to evaluate your tax situation each year instead of automatically choosing pre-tax contributions.

We also cover an important distinction that many employees overlook: the Roth 403(b) is just the account structure - what you invest in inside the account matters too. Different plans can have very different investment choices, fees, annuities, and levels of flexibility.

Later in the episode, we answer a listener question about how many years of service you should have before retiring. We explain why 27 years doesn't automatically qualify you for full benefits, why 30 years can be an important milestone, and the tradeoffs that come with retiring early, including permanent pension reductions, healthcare costs, and the need to make your retirement savings last longer.

If you're a Washington State employee trying to decide between Roth and pre-tax retirement savings or wondering when you can realistically retire, this episode will help you understand the key considerations.

00:00 Roth 403(b) explained

02:14 How a Roth 403(b) works

03:08 Roth 403(b) contribution limits and income rules

04:07 Why the investment inside your Roth 403(b) matters

05:09 Listener question: How many years should you work before retiring?

06:28 The tradeoffs of retiring early

07:29 Why 30 years is an important milestone

08:14 Should you keep working after 30 years?

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🙋🏽‍♀️ Need help? Schedule A Meeting :

https://calendly.com/scenicfinancial

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🎯Get TRS 3, PERS 3 & DCP Investment Advice Here:

💥💥 https://scenicfinancial.net/scenic-plan-confidence1/💥💥

The Only Place To Receive Ongoing, Personalized Investment Advice, So You Can Confidently Invest In Your TRS 3, PERS 3 & DCP Retirement Plans!

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🕸 Visit Us Online:

Scenicfinancial.com

WATRSPERS.com

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DISCLAIMER

**Advisory Services offered through Intirety, LLC a registered investment adviser. Intirety LLC and Scenic Financial are not associated with the Washington State Department of Retirement in any way. Scenic Financial makes content available as a service to its clients and other visitors, to be used for informational purposes only. While our best intentions are to provide accurate and timely information, you should always consult with retirement, tax, and legal professionals prior to taking any action. 🕸️

Free Washington Retirement Planning Community and Courses

What is a Roth IRA, how does it work, and why might you want one as part of your retirement strategy?

In this episode of the Washington State Retirement Planning Podcast, we break down the Roth concept in simple terms, including how Roth IRAs differ from pretax retirement accounts and why paying taxes today can potentially give you tax-free growth and withdrawals in retirement.

We use a simple example to explain the difference between paying taxes now versus paying them later, then cover Roth IRA contribution limits, Roth conversions, and why having both pretax and Roth money can provide valuable tax diversification in retirement.

We also answer a listener question about whether you should move money out of the market because of concerns about an imminent crash. We discuss why trying to time the market is so difficult, how diversification can help, and why having rules and indicators can be better than making investment decisions based on fear or gut feelings.

Finally, we look at why market risk becomes especially important as you approach retirement and why trying to double your portfolio in your final years before retirement can create unnecessary risk.

00:00 What Is a Roth IRA?

03:08 Roth IRA income limits and Roth conversions

04:06 Why tax diversification matters in retirement

05:01 Should you move your money because of a market crash?

08:16 The danger of taking too much risk before retirement

▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬

🙋🏽‍♀️ Need help? Schedule A Meeting :

https://calendly.com/scenicfinancial

▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬

🎯Get TRS 3, PERS 3 & DCP Investment Advice Here:

💥💥 https://scenicfinancial.net/scenic-plan-confidence1/💥💥

The Only Place To Receive Ongoing, Personalized Investment Advice, So You Can Confidently Invest In Your TRS 3, PERS 3 & DCP Retirement Plans!

▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬

🕸 Visit Us Online:

Scenicfinancial.com

WATRSPERS.com

▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬

DISCLAIMER

**Advisory Services offered through Intirety, LLC a registered investment adviser. Intirety LLC and Scenic Financial are not associated with the Washington State Department of Retirement in any way. Scenic Financial makes content available as a service to its clients and other visitors, to be used for informational purposes only. While our best intentions are to provide accurate and timely information, you should always consult with retirement, tax, and legal professionals prior to taking any action. 🕸️