Teachers Are Learning a Hard Lesson. Their Retirement Plans Cost a Fortune.
By Janna Herron
July 12, 2025
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Teachers and school staffers depend on their 403(b) plans to save for retirement just as other workers depend on their 401(k) retirement plans.
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The problem is that many investment options in 403(b) plans often come with big fees—often above 1% annually—eroding what teachers can save by tens or hundreds of thousands of dollars over their careers. By contrast, fees in 401(k) plans have plummeted in recent decades.
Legislation making its way through Congress aims to add more low-cost options to 403(b)s. But a lack of financial sophistication, aggressive selling tactics from vendors, and lax oversight still leave the 3.8 million public school teachers and a similar number of nonteaching school staff susceptible to investments with higher fees.
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