Ever opened your 403(b) statement and thought, “Wait… where did all that money go?”

You’re not alone. Many teachers—public and private alike—trust that their 403(b) plans are helping them build a secure retirement. But beneath all the financial jargon and glossy brochures, some of these plans are doing more harm than good.

Let’s be real: educators pour their hearts into shaping futures. The last thing they should have to worry about is being misled about their own.

In this article, I’ll break down what’s really happening inside many 403(b) plans, why it matters to you, and what steps you can take to protect your retirement savings.

So grab a cup of coffee (you’ve earned it!), and let’s unravel this together.

The Big Question: Is Your 403(b) Helping—or Hurting—You?

Here’s a little secret most financial companies don’t talk about: not all retirement plans are created equal. While 403(b)s were designed for educators, many of them today are structured in ways that quietly benefit the companies managing them more than the teachers contributing to them.

So, how does that happen?

It usually boils down to one word: fees.

The Hidden Cost Nobody Talks About

Imagine your 403(b) as a leaky bucket. You pour water (your hard-earned money) into it every paycheck. But little by little, that bucket leaks—through administrative fees, management costs, and insurance charges.

Here’s the kicker: many teachers don’t even realize these leaks exist.

Let’s look at the usual suspects:

• Mortality and Expense Fees (M&E): The “insurance” cost just for owning the plan.

• Subaccount or Fund Fees: The mutual funds inside your annuity charge their own set of fees.

• Administrative Fees: The cost of maintaining the account.

• Rider Fees: Optional add-ons that often sound great but come at a steep price.

Add them all up, and you could be losing 2–3% of your total balance every single year.

That might not sound like much—but over 20 or 30 years? It could easily add up to tens of thousands of dollars.

Yikes.

Meet Sarah: A True-to-Life Story

Sarah is a sixth-grade science teacher. Like many of her colleagues, she signed up for a 403(b) when she started teaching. She figured it was a great idea—save automatically, grow her money, and relax later.

But years later, when she finally reviewed her account, she was shocked to find out she’d been paying nearly 3% in annual fees.

That means if she had $100,000 saved, $3,000 was disappearing every year—money that wasn’t going toward her future, but toward someone else’s commission.

She wasn’t alone.

Many educators across the country are unknowingly trapped in the same situation.

So, What Exactly Is a Variable Annuity?

Great question.

A variable annuity (VA) sounds fancy, but it’s basically an investment product wrapped in an insurance shell. You invest in “subaccounts” (kind of like mutual funds), and your returns depend on how those investments perform.

The catch? You pay layers of fees—for management, insurance guarantees, and other “benefits.”

And here’s the thing: you’re taking market risk anyway. So why pay more for the privilege?

Let’s simplify it:

• You invest your money.

• They take a cut.

• You take the risk.

• They keep earning—no matter what.

Makes you think, doesn’t it?

The Guidance Gap

Here’s another issue many educators face: lack of guidance.

At your school’s benefits fair, you probably met a “representative” who seemed friendly, confident, and eager to help you set up your retirement plan.

But what many teachers don’t realize is that those reps often represent specific insurance companies, not you. They can only recommend what they sell.

That means their “advice” might be less about what’s best for you—and more about what earns them a commission.

You deserve better.

How to Find Out If You’re Paying Too Much

Ready to see what’s really inside your 403(b)? Start by asking these questions:

1. What are my total fees? Ask for the mortality & expense (M&E), subaccount, and admin fees.

2. What investments am I in? Are they variable annuities, mutual funds, or something else?

3. Do I have surrender charges? This means penalties if you try to move your money out.

4. Is there a better option available? You might have alternatives like a 457 plan or IRA

Most importantly, don’t be afraid to ask questions. You’re not expected to be a financial expert—but you do deserve transparency.

Better Alternatives for Educators

If you’re realizing your current 403(b) might not be ideal, don’t panic. There are ways to improve your situation—starting today.

Here are a few options worth exploring:

1. Roth IRA

• Offers tax-free growth and withdrawals in retirement.

• You control where and how your money’s invested.

• Lower fees and no required distributions later on.
  
  

2. Fixed or Fixed-Indexed Annuities

• No market risk.

• Lower fees than variable annuities.

• Great if you want a predictable income.
  
  

3. 457 Plans (if available)

• Often available to public educators.

• Typically, lower fees and better investment options.

• In some states, like Ohio, they can be great alternatives to 403(b)s.
  
  

4. Cash Value Life Insurance (CVLI)

• No contribution limits.

• Offers tax-advantaged growth and living benefits.

• Can complement other retirement accounts.
  

The Emotional Side of It All

Let’s be honest—money isn’t just numbers on a page.

It’s about peace of mind. Security. Knowing that after years of teaching, grading papers, and helping students grow, you get to enjoy the rewards of your hard work.

That’s why this topic hits so close to home for so many educators. It’s not just about fees and funds—it’s about fairness.

You’ve spent decades investing in others. Now it’s time to make sure your investments are finally working for you.

FAQs

Q: Can I move my 403(b) to something better?
Yes, but timing matters. Some plans have surrender charges if you move your money too soon. Check with a trusted financial advisor before making any changes.

Q: How can I find out if I’m paying high fees?
Ask your plan provider directly for a “prospectus” or “fee disclosure.” If they hesitate or can’t explain clearly, that’s a red flag.

Q: What’s the main difference between a 403(b) and a 457 plan?
Both are tax-deferred, but 457 plans often have lower fees and no early withdrawal penalties if you leave your job.

Q: Should I stop contributing to my 403(b)?
Not necessarily. But you might consider reducing contributions until you’ve explored better options.

The Bottom Line

Something is always better than nothing—but that “something” should be working for you.

If your 403(b) is filled with hidden fees and limited investment choices, it’s time to take a closer look. The good news? You don’t have to figure it out alone. Talk to a licensed advisor who understands educators’ needs and can guide you toward smarter, low-cost options.

Because at the end of the day, your retirement shouldn’t be a mystery. It should be a reward.

Conclusive Summary

Let’s recap:

• Many 403(b)s come with hidden fees that can cost you thousands.

• Most are filled with variable annuities that benefit insurance companies more than educators.

• You can ask questions and explore better options like Roth IRAs, 457 plans, or CVLI.

• It’s never too late to take control of your financial future.

So here’s my challenge to you:

👉 This week, take 15 minutes to look at your 403(b) statement.
Find out what fees you’re paying and what investments you’re in.

Then share in the comments—what did you discover? Were you surprised?

Your story might just inspire another educator to take action, too.