Financial Advisor Tim Hayes
Massachusetts 403b Plan Financial Advisor • Tim Hayes
I am an Investment Adviser Representative at Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser (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.
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
I’ve held an industry securities registration for 30+ years and am subject to SEC and FINRA oversight.
A 403b or tax-sheltered annuity is a retirement program for public school employees that helps them accumulate money to supplement their state pension. You can start one with as little as $50 to $100 per paycheck, and just like your contribution to the state pension plan, the amount is pre-tax.
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,” including the program’s loan policy, vendor list, exchange options, and withdrawal rules.
Vendor List – The plan lists what vendors the staff can use for their tax-sheltered annuity (403b). Each vendor in your plan will have their fee structure, fund choices, and product features.
I emphasize education – Financial professionals working with public school employees must be familiar with the 403b regulations, the plan, and the vendor list.
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 and the OMNI Group. Financial professionals 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, Putnam Funds, MFS, Aspire Financial, AXA Equitable, and Fidelity Investments.
403b Plan Maximum Contribution Limits
Public school employees, including university professors and administrators, can save more money pre-tax than any other public or private-sector employee.
That’s because employees are eligible for two retirement plans with unique catch-up options.
In 2023, employees can save $22,500 into a 403(b) and a 457 plan. Those fifty years or older can also contribute an additional $7,500 to both.
The 403(b) catch-up allows employees who have low 403(b) savings and have worked fifteen 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 $22,500 are credited first against the 15-year rule. Employees aged fifty or above 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 $45,000 per year for three years before their “regular retirement date.”
The 403(b) catch-up can be used in conjunction with the age fifty catch-up and 457 plan. However, the 457 plan catch-up cannot be used with the age fifty catch-up, although the employee could still contribute to a 403(b).
Putting large amounts of money into a 403(b) and 457 plan does not reduce your income for the Massachusetts Retirement System calculations.
Not everyone can afford to save the maximum; however, it is good to know that employees 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.
- School systems should think about eliminating the fifteen-year catch-up from their 403(b) plan, especially if there is no tracking system in place when the catch-up contribution starts.
- Any employee saving the maximum in a 403(b) plan and wanting to save more money can usually open up a 457 plan.
- Remember, if you are eligible, you can use the 457 catch-ups with the 403(b) plan, plus the age fifty catch-up, making it an excellent option for any educator who wants to defer sick buybacks.
|Name of Retirement Plan||Basic Contribution Limit||Age 50 and up Catch-Up||Basic + Age Fifty|
|401(k) Retirement Plan||$22,500 per year deferral||$7,500 per year||$30,000|
|SIMPLE IRA Retirement Plan||$15,500 per year deferral||$3,500 per year||$19,000|
|SEP IRA Retirement Plan||Cannot exceed the lesser of: 25% of compensation, or $66,000 per year||N/A||N/A|
|403b Retirement Plan||$22,500 per year deferral||$7,500 per year||$30,000|
|457 Retirement Plan||$22,500 per year deferral||$7,500 per year||$30,000|
|Public School Employees Are Eligible for Both a 403b and 457||$45,000 per year deferral||$15,000 per year||$60,000|
New Rule from the SEC
Beginning June 30, 2020, broker-dealers (B/Ds) began operating under a new Regulation Best Interest standard. This requires them to better align their product recommendations and services with their clients’ best interests by eliminating conflicts of interest, such as proprietary product requirements, sales quotas, or sales contests.
Registered representatives will now be called financial professionals. Any advisors who are fiduciaries can continue calling themselves financial advisors. Some critics complain that the new standard does not meet the uniform standard’s original intent.
Financial professionals representing broker-dealers or a life insurance company provide most of the 403b plans in the public schools. So going forward, most purchases of 403b plans will fall under the Regulation Best Interest Standard.
Financial Advisor Tim Hayes Believes the DOL Got It Right
By striking a balance between new protections for consumers with additional burdens on the financial services industry, Financial Advisor Tim Hayes believes the Department of Labor (DOL) hit a home run with its new retirement advice rule.
Fixing the Law
By eliminating a 1975 rule, made when retirement plans were much different than they are today, the Department of Labor rectifies the contradiction that financial advisors with conflicts of interest are providing financial advice to retirement accounts even though ERISA, the law governing these accounts, prohibits this from happening.
What does the new rule mean for consumers? “If you have a 401(k) or 403b, the advisor fees might come down. If you roll over the 401(k) or 403b to an IRA, the fees in the IRA should be competitive to what they were in the 401(k).
Sign Up Today for a 403b Retirement Plan and Start Paying Fewer Taxes Tomorrow
Since 1990, I’ve been a personal financial advisor specializing in helping employees set up, invest, and service their 403(b) plans (tax-sheltered annuity plans).
During this time, I have accumulated a reservoir of knowledge on your retirement system, the social security offset/windfall elimination, 403(b) plans, and other personal financial issues specific to educators.
Because I am an independent 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 Oppenheimer.
Due Diligence Mutual Funds and Exchange-Traded Funds (ETFs)
I provide a due diligence selection process using the Fiduciary Focus Toolkit™. It screens, 10,000+ mutual funds and EFTs down to a couple hundred eligible for use in your portfolio. The process screens for manager tenure, fees, performance, and style.
I cross-reference my results with their fi360 Fiduciary Score™. That score is an easy-to-use and easy-to-understand way to objectively compare peer investments and determine their overall appropriateness. It is a ready-made due diligence solution that can help advisors demonstrate a careful investment selection and monitoring process.
These are the opinions of Financial Advisor Tim Hayes and not necessarily those of Cambridge Investment Research. They are for informational purposes only and should not be construed or acted upon as individualized investment advice.
My Professional Designations
Individuals who hold the AIF® designation have:
- Completed the AIF® Designation Training;
- Passed the AIF® designation exam;
- Met the designation’s prerequisites and qualification and conduct standards;
- Accrued a minimum of six hours of continuing professional education, with at least four hours coming from fi360-produced sources;
- Attested to a code of ethics.
Individuals who hold the CRPS® designation have:
- Completed a course of study encompassing design, installation, maintenance and administration of retirement plans;
- Passed an end-of-course examination that tests their ability to synthesize complex concepts and to apply theoretical principles to life situations;
- Pledged adherence to the CRPS® Standards of Professional Conduct, and are subject to a disciplinary process in that regard.
CRPS® designees renew their designation every two years by completing 16 hours of continuing education, reaffirming adherence to the Standards of Professional Conduct, and complying with self-disclosure requirements.
Individuals who hold the AWMA® designation have:
- Completed a course of study encompassing wealth strategies, equity-based compensation plans, tax-reduction alternatives, and asset-protection alternatives;
- Passed an end-of-course examination that tests their ability to synthesize complex concepts and apply theoretical concepts to real-life situations;
- Agreed to adhere to the AWMA® Standards of Professional Conduct, and are subject to a disciplinary process in that regard.
AWMA® designees renew their designation every two years by completing 16 hours of continuing education, reaffirming adherence to the Standards of Professional Conduct, and complying with self-disclosure requirements.
CFS designation is awarded upon passing an examination on mutual funds, ETS, REIT’s, closed-end funds, and similar investments. Advanced studies on topics include:
- Fund analysis and selection;
- Asset allocation;
- Portfolio construction;
- Sophisticated investment strategies for risk management, taxes, and estate planning.
San Diego, CA, November 13, 2020 – The Institute of Business & Finance (IBF) recently awarded Tim Hayes with the only nationally recognized tax designation, CTS™ (Certified Tax Specialist™). This graduate-level designation is conferred upon candidates who complete an 135+ hour educational program focusing on personal income taxes and methods to reduce tax liability. The combined top state and federal bracket can easily exceed 40%.
San Diego, CA, September 1, 2020 – The Institute of Business & Finance (IBF) recently awarded Tim Hayes with the estate planning designation, CES™ (Certified Estate and Trust Specialist™).
This graduate-level designation is conferred upon candidates who complete a 135+ hour educational program focusing on trusts, wills, probate, retirement benefits, caring for children, and what should be done after the death of a loved one. Over $50 trillion is expected to pass from one generation to another during the next half-century.
The Accredited Portfolio Management AdvisorSM, or APMA® program, is a designation program for financial professionals. The program educates advisors on the finer points of portfolio creation, augmentation, and maintenance. Students will gain hands-on practice in analyzing investment policy statements, building portfolios, and making asset allocation decisions.
San Diego, CA, May 12, 2020 – The Institute of Business & Finance (IBF) recently awarded Timothy Hayes with the only nationally recognized annuity designation, CAS® (Certified Annuity Specialist®).
This graduate-level designation is conferred upon candidates who complete a 135+ hour educational program focusing on fixed-rate and variable annuities. Several trillion dollars are invested in annuities; it is estimated that at least one-third of all annuity contracts are not titled correctly.
Where I Can Help You Set Up Your 403b Plan
M – 403b Plans for Employees
- Malden Public Schools
- Manchester Essex Regional School District
- Mansfield Public Schools
- Martha’s Vineyard Regional High School
- Marshfield Public Schools
- Masconomet Regional School District
- Maynard Public Schools
- Melrose Public Schools
- Methuen Public Schools
- Middleborough Public Schools
- Milton Public Schools
- Minutemen Regional
N – 403b Plans for Employees
- Natick Public Schools
- Needham Public Schools
- Newburyport Public Schools
- Newton Public Schools
- North Andover Public Schools
- North Attleborough Public Schools
- Northborough Southborough Regional School District
- North Reading Public Schools
- Norton Public Schools
- Norwood Public Schools
P – 403b Plans for Employees
R – 403b Plans for Employees
S – 403b Plans for Employees
- Sandwich Public Schools
- Saugus Public Schools
- Scituate Public Schools
- Sherborn Public Schools
- Somerville Public Schools
- South Shore Education Collaborative
- Stoneham Public Schools
- Stoughton Public Schools
- Sudbury Public Schools
T – 403b Plans for Employees
W – 403b Plans for Employees
- Wakefield Public Schools
- Waltham Public Schools
- Watertown Public Schools
- Wayland Public Schools
- Wellesley Public Schools
- Westford Public Schools
- Weston Public Schools
- Westport Public Schools
- Westwood Public Schools
- Weymouth Public Schools
- Whitman-Hanson Regional School District
- Wilmington Public Schools
- Winchester Public Schools
- Woburn Public Schools
A – 403b Plans for Employees
- Abington Public Schools
- Acton- Boxborough Regional School District
- Amesbury Public Schools
- Arlington Public Schools
- Ashland Public Schools
- Attleboro Public Schools
- Avon Public Schools
B -403b Plans for Employees
- Bedford Public Schools
- Bellingham Public Schools
- Belmont Public Schools
- Beverly Public Schools
- Billerica Public Schools
- Blue Hills Regional Technical School
- Boston Public Schools
- Boxford Public Schools
- Braintree Public Schools
- Brookline Public Schools
C -403b Plans for Employees
- Canton Public Schools
- Carlisle Public Schools
- Carver Public Schools
- Chelmsford Public Schools
- Cohasset Public Schools
- Concord Public Schools
- Concord-Carlisle Regional School District
D – 403b Plans for Employees
- Danvers Public Schools
- Dartmouth Public Schools
- Dedham Public Schools
- Dover Public Schools
- Dover Sherborn Regional School District
F – 403b Plans for Employees
- Fall River Public Schools
- Foxborough Public Schools
- Framingham Public Schools
- Freetown Lakeville Regional Schools
G – 403b Plans for Employees
H – 403b Plans for Employees
- Hanover Public Schools
- Harvard Public Schools
- Holliston Public Schools
- Hopkinton Public Schools
- Hudson Public Schools
I – 403b Plans for Employees
L – 403b Plans for Employees
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