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Independent 403b Financial Advisor In Massachusetts

Financial Advisor Tim Hayes CRPS®, AIF®, AWMA®, CFS™, CTS™, CES™, APMA®, CAS® 

Since 1990, I’ve been a 403b financial advisor specializing in helping educators set up, invest in, and service their 403(b) plans.

I have accumulated a reservoir of knowledge on the retirement system, the social security offset/windfall elimination, 403(b) plans, and other financial issues specific to public employees.

Because I am an independent 403b financial advisor who provides flexible payment options (fee-only, hourly rate, or commission), I can work with most companies in your school system’s 403(b) plan. A partial list of companies I work with includes Fidelity, American Funds, Putnam, MFS, Aspire, Security Benefit, Axa, and Invesco.

How Much Can You Contribute to a 403b?

Public school educators, including university professors and administrators, can save more pre-tax than any other public or private-sector employee.

That’s because educators are eligible for two retirement plans, both with unique catch-up options. A 403b, also known as a tax-sheltered annuity, is a tax-advanced retirement savings plan. It has tax treatment similar to a 401k plan; employee salary deferrals are invested before tax, and the account grows tax-deferred.

In 2021, educators can save $19,500 into a 403(b) and a 457 plan. Those 50 years of age or older can also contribute an additional $6,500 to one of the two programs.

The 403(b) catch-up allows educators with low 403(b) savings who have worked 15 years with the same employer to save an additional $3,000 per year for five years.

One problem with this catch-up is that any contributions over $19,500 are credited first against the 15-year rule, so a teacher aged 50 or older could use up their 15-year catch-up without knowing it.

The 457 plan has a more considerable catch-up. It allows eligible employees to contribute $37,000 per year for three years before their “regular retirement date.”

The 403(b) catch-up can be used in conjunction with the age of 50 catch-ups and a 457 plan. However, the 457 plan catch-up cannot be used with the age of 50 catch-ups, although the employee could still contribute to a 403(b).

Not everyone can afford to save the maximum; however, it is good to know that educators have a well-deserved potential benefit.

Your school system provides you with a list of 403(b) companies. The 457 plan is different. The city/town usually provides one company. Both typically give you a broad range of investment options.

Book a 403b Phone, Zoom, or In-Person Appointment

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With So Many Investment Possibilities, How Do Uou Know What’s Best

Tim is a financial advisor with the experience and knowledge you can trust to know which investment vehicles may be right for you. Whether you’re an individual, small business, or company executive, he’ll set you up with a portfolio attuned to your unique needs.

FAQ

I am an Investment Adviser Representative at Cambridge Investment Research Advisors, Inc., a $44B RIA based in Fairfield, IA. I am also registered with Cambridge Investment Research, Inc., an independent broker-dealer with over 3,000 registered representatives nationwide.

I've held an industry securities registration for 30+ years and am subject to SEC and FINRA oversight.

Most clients pay fee-only or an hourly rate. The size and complexity of the client's wealth management and financial and retirement planning determine that fee.

Some clients pay a commission, mainly those with smaller accounts, i.e., Roth IRAs, some public-school teachers with 403b retirement accounts, or parents or grandparents who set up a 529 college savings plan.

The first introductory and fact-finding appointment can be in-person or by phone. The next meeting where I provide my recommendations should be in-person. (For the time being, telephone, Zoom, and email are replacing in-person meetings.)

Subsequent meetings during which we monitor your progress and investments can be done in-person or by phone, email, Zoom, or Skype - or, more likely, a combination of thee meeting types.

Book an appointment phone or in-person

Social Security and Public Employees In Massachusetts

Public employees in Massachusetts do not contribute to the Social Security system, but many of them contribute through other jobs. Some also have spouses who take part in the Social Security system. Both scenarios are affected by two federal laws.

  • The Windfall Elimination provision can reduce any Social Security benefits that a public employee earns by as much as 55%. For example, a retired teacher who receives a pension from MTRS and also qualifies for a monthly Social Security benefit of $1,000 might only receive $450 a month.
  • The Government Pension Offset provision affects the Social Security benefits of a spouse, widow, or widower. For example, if a married teacher receives a monthly pension from MTRS of $6,000, two-thirds of that amount ($4,000) will be credited against any benefit from their spouse’s Social Security.
    • Thus, if the spouse dies and the retired teacher is eligible for a $2,000 survivor benefit from Social Security, that teacher would receive none of it because the $4,000 would eat into all of it.
    • Very few married people who retire with a pension from MTRS will receive anything from their spouse’s Social Security.

Are There Any Workarounds?

There is a workaround for the Windfall Elimination Provision. Any public employee in Massachusetts with 30 or more years of ‘substantial earnings’ in a job where they paid into Social Security will receive their full benefits. In fact, after 25 years of such substantial earnings, any reduction in Social Security benefits begins to shrink.

Read More: Social Security When Should You Start Taking It?

403b Plans, Vendors, Public School Employees and Financial Advisors

A 403b, also known as a tax-sheltered annuity, is a tax-advanced retirement savings plan. It has tax treatment similar to a 401k plan; employee salary deferrals are invested before tax, and the account grows tax-deferred.

Written Plan

In 2009, the IRS began requiring a written plan for all employers with a 403b. The plan lays out the “rules of the road” to include the program’s loan policy, vendor exchange options, and withdrawal rules.

Vendor List

The plan lists what vendors the staff can use for their 403b. Each vendor in your plan will have its own fee structure, fund choices, and product features.

I Emphasize Education

Financial professionals working with public school employees need to be familiar with the 403b regulations, the plan, and the vendor list.

Third-Party Administrators (TPAs)

Many school systems now use a TPA or Third-Party Administrator to help run their plan. In Massachusetts, the most common TPAs are TSA Consulting/OMNI. Financial advisors process paperwork such as salary reduction forms, loan forms, and withdrawals through the TPA.

I work with TPAs and many vendors, including American Funds, Security Benefit, Invesco, Fidelity, Putnam, AXA. I have no sales quotas or financial incentives to sell a particular vendor. Moreover, I have over 30 years of experience working with educators.

Read More: All Services

Find Your Plan

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Sign Up for a 403b Today and Start Paying Fewer Taxes Tomorrow

I can meet you at work before, during, or after the school day, or we can email Zoom and process the paperwork virtually.

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