Teachers in top five to become millionaires

This is a good report on who becomes a millionaire.


One thing not mentioned in the story is that most public school teachers are required to participate in some sort of retirement plan.


There was mention that a lot of it is done with 401k.

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The article didn’t mention TIAA-CREF which teachers used to say did very well with their pension funds. I assume they are still doing their thing.


I think very few teachers use TIAA-CREF. In my experience, TIAA would only cover those institutions where they were the sole provider (like colleges) and where there were 1,000 or more employees. Additionally, up until about 10 years ago, schools would open their doors to just about any provider and TIAA won’t work in that sort of environment. I can speak from personal experience that even after that change, TIAA-CREF isn’t overly interested in public schools. I called them and tried to find out what it would take to switch my wife’s provider to TIAA and once I told them the number of employees (just under 800), they said they were not interested.


Simple. LBYM.

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My school system did not offer TIAA-CREF. It was a large enough employer but offered plans administered by dozens of investment and insurance companies.

Yep, that was the way of the wild west in teacher retirement plans up until about 15 years ago. Neither TIAA nor Vanguard (I tried them too) would come into a 403b marketplace unless the school signed an exclusive contract and I assume that was prohibited prior to some recent legal changes that allowed schools to sign such.

The easiest route to becoming a millionaire is to put all that money you would have blown on college tuition in a “skim-free” investment in the S&P 500 over the next 30 to 40 years. There are so many college-educated professionals that wouldn’t recommend their career to their kids – teachers being foremost among them.


It was not just Texas. 403b annuities (especially VALIC) were common throughout the country.

Before 2009, there was a definite distinction between a 403(b)(1) and a 403(b)(7) — there was no requirement for employers to have a plan, so employees signed either an annuity contract (403(b)(1)) or a custodial agreement (403(b)(7)).

Fast forward to today: now, the employer maintains a 403(b) plan where the investments either can be in an annuity contract (403(b)(1)) and/or in a custodial agreement (403(b)(7)) where the investments are in mutual funds.

The vast majority of 403b plans prior to 2009 were 403b(1) annuity plans. One of the first things I did when this law changed was to get my wife into a 403b7 plan. Expenses were still high but there was no longer a silly M&E fee of 1.3% onto of the already expensive mutual fund/separate account fees.

In summary, if teachers are retiring as millionaires, it absolutely is not because of their savings in expensive 403b plans (it is more likely their mandated pension plans).
My teacher wife serves on her negotiating committee so she gets access to all sorts of employee data. Less than 10 contract employees out of nearly 800 max their 403b every year (note Administration get their own plan and they are not privy to those details).


I was a teacher in IN and retired in 2011. I remember the big meeting where they got all the teachers together with the newly approved “investment advisors” a few years before I retired. The “F” word at those advisors tables was “fiduciary.” When I said that word it reminded me of that scene in Caddyshack where someone sees a Baby Ruth candy bar in the pool.


Some of us may remember the uproar when Congress was considering passing legislation that would hold retirement “investment advisors” to a fiduciary standard. The “advisor” industry had an apoplectic fit at the prospect of being forced to manage their client’s money for the best interests of the client, rather than using OPM to stuff their own pockets full.



Talk about a lesson in the benefits of a long time line … back in the early 70s when I taught at SUNY Albany, they had TIAA-CREF. At the time, one could put a maximum of 85% in CREF, so I did. Moreover, at the time Governor Rockefeller was contributing my share as well as the school’s share so the cost to me was $0. At the time, my salary was about $12,500 so I think the total contribution was about $6K. 10 years ago, it was worth in the neighborhood of a quarter million, when I used it for other purposes.


For the teaches if this link will work here. These are teachers.

My wife worked for a local college that had TIAA-CREF as their 403(b) fiduciary. Over the 12 years that she was contributing, she accumulated a nice chunk of change - this was even though the college, having some financial troubles most recently stopped their contributions into the fund. She retired this past June 30, and the college had announced that they were about to re-start their side of contributions. I guess timing in life is everything.

Once her last payroll deduction had been posted to her TIAA-CREF account, she closed it and did a rollover into her Fidelity IRA which has no fees and she has a plethora of investment options.