December 28, 2025 • 26 mins
403(b) plans confuse a lot of people - and so do the mysterious 457 plans. If you're lucky enough to have access to one (or both), you'll thank yourself later.
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Episode Transcript
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SPEAKER_00 (00:00):
The following podcast is for educational and
entertainment purposes only.
Remember to seek competent tax,legal, and investment advice
that is unique to your personalsituation.
(00:32):
Welcome to the uh Pink Bunnypodcast, where we talk about all
things related to money from aqueer perspective.
I'm your host, Jerry Williams.
And, you know, a lot of myconversations when I run into
people, they often drift offinto financial topics and
questions, or, you know, we justnaturally bring up things that,
you know, are related to both ofus.
(00:53):
And one of those things thathappened to me was I was walking
my dog, Pickles, and we ran intoa neighbor of mine, and she's a
teacher.
And we just struck up aconversation and it drifted,
like I said, into these arenas.
And one thing, a couple ofthings that she mentioned, and
we talked about it briefly, andI thought, you know, maybe this
is something other people don'tknow, or maybe, you know, they
(01:14):
might benefit from learning alittle bit about it.
And that's the reason for thispodcast, because we talked about
things like savings, and we alsotalked about things like uh 403B
and 457 plans.
So they're really, of course,all things separate, but the one
thing they have in common issaving, right?
(01:35):
Saving money, saving money forlater, saving money for
emergencies, or saving money forretirement.
And the name of the game alwaysis saving as much money as you
can and making it work for youas hard as possible, because you
don't want to leave cash sittingaround and not doing anything.
But, you know, a lot of peoplefeel very comfortable having a
(01:57):
certain amount of cash lyingaround.
In fact, what she told me was,you know, I'd like to see my
cash.
And that's good and bad, right?
I mean, if it's in, let's say,your safe or lockbox or what
have you, you can open that upand you can count it, you can,
you know, obviously see it, youknow, you can run it through
(02:19):
your fingers, etc., etc.
And that's all great.
And I would say that's all greatfor a relatively small amount of
money.
And small means, of course,different things to different
people, but let's say you haveanywhere from two to three
hundred dollars, maybe fivehundred to a thousand.
And I don't know really whatwould the dictate using that
(02:43):
cash to pay for something.
I mean, uh, there's all kinds ofcircumstances, I guess, that can
crop up, maybe just things Ihaven't thought about.
But anyway, I would think thatbeyond that, you'd want to put
that money into a high-holdsavings account because that's
really where it's gonna earnsome interest.
And right now, interest ratesare pretty high.
And as long as your account isFDIC insured through any
(03:06):
national bank, you know, WellsFargo, whatever, again, if that
bank were to go under, then thegovernment's gonna help you get
your money back, you know, up to$250,000.
And there's different ways tostructure your accounts so you
can increase that limit.
And there's, you know, justvarious ways.
I don't want to talk about allthat because it's very complex
in terms of how you canmanipulate your registrations on
(03:29):
your accounts to make sure thatthey're all covered.
Plus, you have other options togo to other banks.
Credit unions, I always leavethem out as well.
I don't know why I do that, butcredit unions are also covered
by the same type of insurance.
So again, if your credit unionwere to go bust, you would
similarly be able to get yourmoney back.
But nevertheless, savingsaccounts right now and just
savings in general, the ratesare pretty high.
(03:51):
So I've seen them anywhere fromyou know one and a half, two
percent all the way up to fourpercent.
I don't know if I've seen five,but it doesn't matter.
Just do your research and Iwould say put that cash away
into something that's reallygoing to benefit you.
The other thing that reallybenefits teachers in
particularly is often, you know,when let's say you go out, party
(04:16):
a bar or whatever, and somebodymentions their 401k.
So a lot of people brag abouttheir 401k and dah-da-da-da-da,
and how much money they have,blah, blah, blah, blah, blah,
and all their investmentchoices, blah, blah, blah.
And I don't know.
It could be right, it could bewrong, who knows, right?
A lot of people talk a lot ofshit, but you have the ability
if you work for, let's say, astate government, some
(04:38):
nonprofits, again, if you're ateacher, educator, you know, in
the public school system, maybeuniversities, et cetera, then
you will usually have access toa 403B, sometimes a 457 plan.
So a 403B, for all intents andpurposes, is your 401k.
It's just that you, again, workin this nonprofit arena.
(04:58):
So you also have contributionlimits, and you also have uh
limits on who you can investyour money with and what choices
you have to invest your money.
So, what that means is when yougo to your plan administrator,
your HR, whomever, they're gonnapoint you to the typically the
plan administrator, and thenthey're gonna give you your
(05:19):
little packet, or sometimes I'veheard many school districts do
like these open meetings wherethey invite the investment
company in and they kind of runyou through the whole 403B from
beginning to end, how it works,what you can invest in,
da-da-da.
And then, you know, you take itfrom there, you can sign up, all
that good stuff.
Usually you have to work withyour school district, and they
(05:42):
have to be able to tell youexactly how much you contribute
because there's a formula thatthey follow, and then they will
tell you how much you cancontribute.
So that's obviously going to bekey because you need to put just
what you can aside for yourself,saying you want to, you know,
max it out to the greatestdegree that you can.
If you can't, you can't, but ifyou can, you can.
Because in the 403B land, youknow, you can put in a
(06:09):
significant amount of moneyright now for 2026.
I mean you can talk about 2025because that's basically over.
Here we are a week before thenew year, so bye-bye 25.
Anyway, so if you have 401k, a403B, and or a 457 plan, then
you can put up to 24,500.
(06:30):
If you're age 50 and above, thenyou have what are called
catch-up contributions, oryou're able to put more money
in, and that can go up to$8,000.
So you could put a total of$32,500.
However, there is a provisionthat if you're age 60 to 63, you
can have a higher catch up limitup to$11,250.
(06:51):
$11,250.
So your total would be then$35,750.
And that's again if your planallows it.
That does not prevent you,however, from having a IRA if
you choose to.
You could have a Roth, you couldhave a traditional IRA.
There's a couple caveats tothose IRAs, however.
(07:13):
So one is deductibility and oneis the ability to contribute.
So just because you're a teacherand often, you know, your salary
is rather low, but you could bemarried and your husband, your
wife, whomever, has a very highsalary.
So your combined joint incomecould be significant.
That may really impinge on yourability to make a deductible
(07:37):
contribution to your traditionalIRA, as well as if your husband
contributes to a 401k or youcontribute to your 403B, you
have these deferred compensationplans where it's going to again
impinge on your ability to takea deduction, write it off on
your taxes on what youcontribute.
So you can make yourcontribution, but you may not be
(07:59):
able to deduct it.
On the Roth IRA hand, you maynot be able to contribute at
all.
But you can sometimes do aconversion from a traditional to
a Roth and pay your taxes nowand then leave that money
sitting in the Roth.
And then again, as it's as longas it's in there at least five
years and you're over 59 and ahalf before you take it out,
then everything comes outcompletely tax-free.
(08:19):
You definitely want to work withyour tax advisor.
You know, if you want exploringthese limits to a much greater
degree, I'm giving you kind ofthe high-level look here.
But anyway, back to the 403B.
So there's also just one littlecaveat.
Some institutions offer it, somedon't.
If you have 15 years of servicewith your qualifying employer,
(08:39):
there is a special catch-upprovision that may apply where
you can put in up to$3,000 extraper year, up to a$15,000
lifetime cap.
So there's some other limits,etc.
And that's again why you want towork with your school district
just to find out exactly whatyou can do.
You don't want to overcontributeto any of these.
But again, the whole idea hereis for you to put as much money
(09:01):
as you can aside, and it's therefor retirement when you need it.
Now, as I mentioned, you want totalk to the actual investment
company because your schooldistrict will pick the company
that they choose to work with.
And there's just a wide varietyof them.
And it could be some company youknow, it could be some company
(09:21):
you've never heard of, but itdoesn't matter.
So you will work with thatcompany and you also will want
to find out if you have a 403B,a strict 403B, or you have a
what's called a 403BA.
So if you have just your regular403B, then that really means
that you're really stuck intothe land of annuities.
(09:44):
You can only contribute to anannuity.
And there's pluses and minusesabout that.
If you have a 403B7, thengenerally you can invest in a
wide range of mutual funds.
So it doesn't mean you caninvest in everything like you
could with your IRA, right?
You have a really unlimitedamount of choices to a large
(10:04):
degree, uh, which you can investin with that.
But you will have your limitedchoices.
Often it's more than enough toat least allow you to create a
good solid foundation base foryour account.
And if you look at the totalityof all your accounts with your
financial advisor or yourself orwhomever, you know, gives you
advice and guidance or howeveryou decide, then you don't want
(10:26):
to be overweighted in any onething.
You don't want to beoverweighted in large caps, you
don't want to be overweighted insmall caps or whatever.
You know, you want to make itharmony, right?
Everything needs to worktogether.
And you really want to look ateverything so it makes sense.
Because you can shift some stuffaround, you can lower your
contributions in this andredirect this to that, and you
(10:50):
know, move money from A to B.
There's all sorts of things thatyou can do.
There's also the fees that gointo all of this, and you really
want to pay close attention tothat because those fees are just
taken away from your savings,your how much is setting aside
for yourself.
So, especially when you'retalking about the land of
annuities, you really need toask a lot of questions.
They need to really carve thatout so you know what the fees
(11:12):
are, right?
Shouldn't be a surprise.
They should be able to tell you,show you.
Similarly, if you have your403B7, your mutual fund land,
and you want to, again, askquestions about the fees, not
only if there's management fees,if there are underlying fees,
what the expense ratios are,they should be able to tell you
all that as well.
(11:32):
Because these are just commoneveryday questions, and they
will be very they can easilyanswer these questions for you.
That's what I'm trying to say.
So it's it's no big deal.
You should ask away, ask away,ask away until you get all your
questions answered.
But again, you know, work withsomebody if you really feel like
it's out of your league and youreally rather, you know, at
(11:55):
least get some good advice andguidance, and nothing wrong with
that.
But the thing again, just totransition back to deductibility
real quickly, but for 2026, thephase-out limits for uh
deductibility for traditionalIRA contributions when you're
covered by an employer-sponsoredplan.
Then if you're single and coverby plan, then the phase-out
(12:17):
limits go from 81,000 to 91,000.
And married filing jointly,cover by plan, the limits go
from 129 to 149.
So what that means is you'reunder that, usually you can make
a full contribution.
If you're somewhere in that$10,000 middle range, then your
contributions get lower andlower.
And if you're over that, let'ssay$91,000 cap or$149 cap, then
(12:40):
no contributions.
So you don't want to makecontributions to an IRA again,
willy-nilly, either, becauseeverything should work together,
everything should make sense,everything should be according
to plan.
Plans are adjusted, yes, they gooff course, yes, but you know,
course corrections happen, nobig deal.
But you don't want to makeexcess contributions to an IRA
(13:01):
and then be subject to an excesscontribution penalty.
You don't want to do that.
And certainly in some lands of,let's say, four or three B
annuity lands, moving money inand out of that thing is not
likely.
So once you're in that, you'reprobably gonna be in it for the
long haul.
So you really want to beconscientious and cautious about
you know what you're gonnainvest your money in because as
(13:22):
you're sitting here todaythinking, well, that sounds
fantastic.
I don't mind doing it.
I think that's I'm gonna goahead.
That's fine.
What if you leave your schooldistrict, right?
Because then a lot changes.
Everything might change.
You may be able to just simplyroll your 403B from one to
another, fine.
You may not be able to do that.
You may be able to roll it,let's say you quit teaching
(13:43):
altogether and you are becomestay-at-home dad, stay-at-home
mom, whatever.
Um, you go from the nonprofit tothe corporate world, then you
would probably want to roll thatinto an IRA, a rollover IRA.
And there are all sorts of youknow ways that you can do that.
So all I'm saying is you have tolook ahead to your greatest
(14:05):
degree.
Don't lock yourself in if youcan help it, and be very
conscientious about what you putyour money in, and certainly ask
as many questions as you canabout fees.
So not everybody gets access toa 457 plan, especially let's say
if you're at that cocktail partyand you know, this blowhard is
you know bragging about, youknow, his 401k, and you can just
(14:27):
simply chime in and say, yeah,you know, I've got a fantastic
403B, plus I have my 457 planthat's really doing well.
And leave it at that.
That will probably shut him upbecause he has no idea what
you're talking about.
I almost guarantee you.
Unless you're talking to afellow educator, right, that has
some knowledge of that, thenthat's a different story.
(14:48):
But you guys can swap stories.
But if this is somebody in thecorporate world, my guess is
they don't even know what a 403Bplan is, and they have no idea
what a 457 plan is.
So one is qualified, one is nonnon-qualified.
And non-qualified rules, theyapply on a 457 plan.
They're different from the 403B.
So it's not anything you have toget into the weeds about.
(15:12):
You certainly don't want to, inmy opinion, just speak out of
your range because then you kindof look like a fool.
So you just want to say, yeah,my 403B is doing great.
I have also a 457 plan that Ithink I've done really well in,
and so far so good.
I'm happy with it, and I havereally great advice from an
advisor I work with.
(15:33):
I think I'm gonna go get adrink.
Uh, would you like one?
Boom, that's it, right?
Walk away.
Anyway, I think that's about itthat I want to say about that.
There's a lot more you could doin terms of again having an
overall plan, which I wouldhighly recommend.
And just circling back to thecash, don't forget, you can put
(15:54):
your money in various buckets ifyou want to, however, you want
to do that.
Whatever cash is at home, justmake sure it's secured because
if there's a fire, that's theend of that.
And generally the insurancecompanies are gonna be very
stingy in terms of repaying youon the cash you have at hand,
unless you can prove it.
And that's gonna be kind oftricky to prove.
(16:15):
So I don't usually recommendkeeping a big amount of money at
the house.
Plus, what if you get robbed,right?
That could happen.
Someone could come in and takeall your money, take all your
jewelry, etc., etc.
You know, uh just speaking aboutjewelry, just reminding me, you
know, my mother's insurancecompany contacted us and said
(16:35):
that we've had this insurancepolicy for it's called a
valuable personal property for along time.
And I think she only used it onetime for a claim because she
went to a wedding and she lefther watch in the hotel room, and
that was the end of the watch.
And it was a gold watch.
And luckily we had a I think wehad the receipt for it, and they
(16:58):
weren't able to replace exactbecause it just didn't make they
didn't make that model anymore,and they gave her the closest
equivalent.
And so that was that.
But now what they were tellingus is we need to take photos of
everything and submit it to thembecause they want to know what
they're insuring, where beforeit was like blanket coverage,
but now they're getting a lotmore specific.
(17:19):
Of course, I don't know aboutyour insurance company, but you
know, they want to be a lot morespecific about what they're
covering.
And they also told us generally,depending on the item, it will
need an appraisal.
So you usually have to have anappraisal that you pay for.
You go to the jewel, whoever,whomever does the appraisal, and
they have to be qualified, andthen you pay whatever you pay.
(17:39):
And then you will have your copyand you want to send that.
You definitely want to keep thatcopy on hand, and it might be a
good idea just to ship it toyour insurance company as well,
if you have that kind ofcoverage.
If you're unsure what kind ofinsurance coverage you have
regarding your valuable personalproperty, you know, because that
covers a wide range of things.
It could be paintings, it couldbe, you know, antiques, it could
(18:02):
be, of course, jewelry, like Isaid, it could be, you know,
some Faberger egg, I don't know.
But you really want to make surethat you're fully insured for
whatever property you want tohave replaced, and make sure
that to the greatest degree,like I just said, that you have
knowledge of what it's worth.
You know, you go to the youwatch any of those antique
(18:22):
roadshows, right?
And people have, oh, this hasbeen on my white on my wall for
years, you know, my grandma hadit, and da-da-da.
And the next thing you know,they tell you it's like a a
hundred thousand dollar paintingor a very unique, valuable vase
or vase or you know, ring, whathave you.
It doesn't matter.
All I'm saying is it's a goodidea for you to just have those
(18:42):
things insured.
If you have to take out aseparate policy, so be it.
Generally they're prettyinexpensive in the grand scheme
of things.
And like really everything thatyou have in your house, you
should take pictures ofeverything.
Because when the fire happens,tornado, earthquake, whatever it
is, it's really, really hard foryou to probably remember every
(19:04):
single thing that you have.
And it's gonna be thousands andthousands of dollars that
they're gonna, you know, you'regonna try to get from the
insurance company, which isgonna be more difficult.
So at least if you have somephotos, this is what the inside
of my house looks like.
These are some of the items thatI had, and da-da-da-da-da.
You know, it's a lot easier.
You know, years and years ago,I'll just tell you a quick
story.
(19:25):
I was living in this um gardenlevel uh apartment, and I went
out and came back, and the doorhad been kicked in, and the
frame was all busted out, and Iwent in and looked around just
to see if anybody was there.
Nobody was there, but everythinghad been pulled out.
So they ransacked the apartment,and this was way back when, you
(19:47):
know, when you used to have CDs,that was your primary source of
listening to music, except forthe radio, and they had taken a
whole bunch of CDs.
I don't even remember what theywere, it was just a bunch were
gone, and they had taken myStereo equipment and they took
my uh VCR.
This is before before DVDplayers, and they had used uh my
(20:07):
own pillowcases to haul thestuff away.
Anyway, so I called the police.
The police came and they didtheir little investigation,
trying to, you know, figure outwhat's what, asking me
questions, and one of thequestions they asked me, they
said, Well, do you have theserial numbers for any of the
equipment that was taken?
I said, Oh my gosh, you know, Iwas supposed to, I remember I
(20:28):
had these registration papers, Ihad the serial numbers sort of,
you know, attached to them, andI was supposed to write that
down, da-da-da.
Well, lo and behold, I go overwhere they were supposed to be,
and there they were, rightthere.
So I had slipped them underneaththe equipment with the intention
of filling them out, which Inever did, but the whole point
was I had the serial numbers,which I gave to them.
(20:50):
Then they they told me, theysaid, Well, that's great, you
know, blah, blah, blah.
And just to let you know, you'reprobably gonna get robbed again.
I said, What?
Why?
He said, Because they know thatyou're gonna replace the things
that they stole.
He said, That happens a lot.
And I was like, holy cow, thatis crazy.
I ended up moving from thisapartment anyway.
(21:12):
But it was a very surprise tome.
But anyway, back to my story,when we talked to the insurance
company, they were they wereprobably they're probably a lot
more strict now than they werethen, but they gave us, I don't
remember how much, like ten ortwelve dollars per CD, and we
just came up with some numberbecause I had no idea how many
it was.
It was a lot, that's all I know.
But um, one day I was sitting atwork and I get a call from this
(21:35):
detective, and he detectivesays, Hey, do you have any
midgets in your family?
That's it, that was his word,not mine.
Small person, I guess.
Is that what it is today?
Dwarf.
I'm not really sure.
Sorry if I'm offending anybodyshort of short stature.
Anyway, so I said, No, I have uhthough an uncle who's a jockey.
(21:56):
And he's like, No, no.
He's like, the reason I'm askingyou is because he came into a
pawn shop with your VCR andtried to pawn it.
And because of course they hadthe serial number, he's like, we
found it and we arrested him.
And he said, So I just wonderedif he it could be anybody you
knew because you guys have thesame last name.
(22:17):
I was like, wow, no, no, uh,it's no one I know, and glad I
don't know this person becausethat sucks.
But anyway, there's just a goodexample to carry renter's
insurance.
So renter's insurance can comein very handy and it's very,
very inexpensive.
So if you're a renter, make surethat you take out renter's
insurance.
(22:37):
Anyway, I really think that'sabout it.
We are closing out the 2025,like I said, and moving into
2026.
Hopefully, that's gonna be areally great year for you, for
me, for the country.
I'm really hoping.
And I'm gonna continue my seasonsix for I think it's gonna stop
(23:01):
in February, March time frame.
And then we're gonna go intoseason seven.
So I can't believe it's been solong, but hey, it's growing,
building, everything's goingwell.
One thing that I want to remindeverybody about is to go to the
pinkmoneypodcast.com website.
There's a lot of things that areout there.
(23:21):
Oftentimes when I'm talkingabout things like 403B, 403B7s,
that has a lot of information.
I'll create a companion post soI can be more detailed about the
information.
I've also created what arecalled postcards.
Postcards are kind of, as Idescribe them, like a 30-second
elevator pitch.
So you get just the highlights,just enough to be dangerous
(23:44):
with, just enough for you,again, to hold a very brief
conversation with somebody, notenough to get into the weeds.
If you really want to go intothe weeds about any topic, ask
ChatGPT, go do your own researchor whatever you want to do, so
you can go as deep as you want.
But again, these are just somehigh-level points you can latch
on to and go, oh, okay, at leasthave a brief understanding of
(24:05):
what this means, and you can goabout your day.
I think there's about six orseven of them out there right
now, and it just depends.
I keep adding as I come up withideas or things that come to me.
And there's a resources pagewhere there's a lot of
information on there as well,and there's some links that you
can go to, especially as we'retalking about the IRS and regard
(24:28):
to some of the new changes forthe tax law in terms of no tax
on tips, no tax on overtime,which doesn't mean that really
at all.
But I won't get into thatbecause you can read about that
online or listen to the episode.
And speaking of episodes, I madethem so that you should be able
to click on them very easily andget to whatever you want.
(24:48):
They're also categorized.
So if you want to listen tosomething specific about, let's
say, retirement or taxes, etcetera, then you can click on
that and it'll show you theepisodes that are categorized
that way.
And of course, there's a pagethat I also like and I put out
there called Heroes.
And I like that page becausethere's people that I think are
significant in the LGBTQ world.
(25:11):
They've either done something uhextremely significant or they
have a very high profile andthey set themselves up on a
high-level bar, which I think isgreat, and we should all aspire
to be as great as they are, ordo some of the things that
they've done.
And I just I think that there'sa lot of people we could add, a
(25:31):
lot of people I want to add, andI just keep adding them as I go.
But I try to make it broad aspossible and cover as many
people because there's just alot of people doing a lot of
great things and have done a lotof fantastic things.
So kudos to all them.
And then there's my playlist.
Uh, Jerry's playlist is outthere, which has a bunch of
(25:51):
songs I've pulled from a widevariety of genres, just ones
that I like.
Generally, they're all upbeat,happy ones.
I don't really go down the pathof the Patsy Klein uh with
everybody, but you know, if Ineed to, I will.
But uh anyway, another story foranother time.
But I created one for Christmas,another one for New Year's Eve,
and there's a couple videos outthere that are really fun.
(26:13):
I like Kylie Minogue did herXmas song, which I think is the
number one Christmas song rightnow, and also Patty Brooks her
disco cracking Christmas Carol,which is just um one of my
favorite videos.
I just love it.
Anyway, I'm rambling.
You guys got better things todo, and that's about it for me.
(26:33):
And I will talk to you nexttime.
Have a happy new year.
The following podcast is for educational and
entertainment purposes only.
Remember to seek competent tax,legal, and investment advice
that is unique to your personalsituation.
(00:32):
Welcome to the uh Pink Bunnypodcast, where we talk about all
things related to money from aqueer perspective.
I'm your host, Jerry Williams.
And, you know, a lot of myconversations when I run into
people, they often drift offinto financial topics and
questions, or, you know, we justnaturally bring up things that,
you know, are related to both ofus.
(00:53):
And one of those things thathappened to me was I was walking
my dog, Pickles, and we ran intoa neighbor of mine, and she's a
teacher.
And we just struck up aconversation and it drifted,
like I said, into these arenas.
And one thing, a couple ofthings that she mentioned, and
we talked about it briefly, andI thought, you know, maybe this
is something other people don'tknow, or maybe, you know, they
(01:14):
might benefit from learning alittle bit about it.
And that's the reason for thispodcast, because we talked about
things like savings, and we alsotalked about things like uh 403B
and 457 plans.
So they're really, of course,all things separate, but the one
thing they have in common issaving, right?
(01:35):
Saving money, saving money forlater, saving money for
emergencies, or saving money forretirement.
And the name of the game alwaysis saving as much money as you
can and making it work for youas hard as possible, because you
don't want to leave cash sittingaround and not doing anything.
But, you know, a lot of peoplefeel very comfortable having a
(01:57):
certain amount of cash lyingaround.
In fact, what she told me was,you know, I'd like to see my
cash.
And that's good and bad, right?
I mean, if it's in, let's say,your safe or lockbox or what
have you, you can open that upand you can count it, you can,
you know, obviously see it, youknow, you can run it through
(02:19):
your fingers, etc., etc.
And that's all great.
And I would say that's all greatfor a relatively small amount of
money.
And small means, of course,different things to different
people, but let's say you haveanywhere from two to three
hundred dollars, maybe fivehundred to a thousand.
And I don't know really whatwould the dictate using that
(02:43):
cash to pay for something.
I mean, uh, there's all kinds ofcircumstances, I guess, that can
crop up, maybe just things Ihaven't thought about.
But anyway, I would think thatbeyond that, you'd want to put
that money into a high-holdsavings account because that's
really where it's gonna earnsome interest.
And right now, interest ratesare pretty high.
And as long as your account isFDIC insured through any
(03:06):
national bank, you know, WellsFargo, whatever, again, if that
bank were to go under, then thegovernment's gonna help you get
your money back, you know, up to$250,000.
And there's different ways tostructure your accounts so you
can increase that limit.
And there's, you know, justvarious ways.
I don't want to talk about allthat because it's very complex
in terms of how you canmanipulate your registrations on
(03:29):
your accounts to make sure thatthey're all covered.
Plus, you have other options togo to other banks.
Credit unions, I always leavethem out as well.
I don't know why I do that, butcredit unions are also covered
by the same type of insurance.
So again, if your credit unionwere to go bust, you would
similarly be able to get yourmoney back.
But nevertheless, savingsaccounts right now and just
savings in general, the ratesare pretty high.
(03:51):
So I've seen them anywhere fromyou know one and a half, two
percent all the way up to fourpercent.
I don't know if I've seen five,but it doesn't matter.
Just do your research and Iwould say put that cash away
into something that's reallygoing to benefit you.
The other thing that reallybenefits teachers in
particularly is often, you know,when let's say you go out, party
(04:16):
a bar or whatever, and somebodymentions their 401k.
So a lot of people brag abouttheir 401k and dah-da-da-da-da,
and how much money they have,blah, blah, blah, blah, blah,
and all their investmentchoices, blah, blah, blah.
And I don't know.
It could be right, it could bewrong, who knows, right?
A lot of people talk a lot ofshit, but you have the ability
if you work for, let's say, astate government, some
(04:38):
nonprofits, again, if you're ateacher, educator, you know, in
the public school system, maybeuniversities, et cetera, then
you will usually have access toa 403B, sometimes a 457 plan.
So a 403B, for all intents andpurposes, is your 401k.
It's just that you, again, workin this nonprofit arena.
(04:58):
So you also have contributionlimits, and you also have uh
limits on who you can investyour money with and what choices
you have to invest your money.
So, what that means is when yougo to your plan administrator,
your HR, whomever, they're gonnapoint you to the typically the
plan administrator, and thenthey're gonna give you your
(05:19):
little packet, or sometimes I'veheard many school districts do
like these open meetings wherethey invite the investment
company in and they kind of runyou through the whole 403B from
beginning to end, how it works,what you can invest in,
da-da-da.
And then, you know, you take itfrom there, you can sign up, all
that good stuff.
Usually you have to work withyour school district, and they
(05:42):
have to be able to tell youexactly how much you contribute
because there's a formula thatthey follow, and then they will
tell you how much you cancontribute.
So that's obviously going to bekey because you need to put just
what you can aside for yourself,saying you want to, you know,
max it out to the greatestdegree that you can.
If you can't, you can't, but ifyou can, you can.
Because in the 403B land, youknow, you can put in a
(06:09):
significant amount of moneyright now for 2026.
I mean you can talk about 2025because that's basically over.
Here we are a week before thenew year, so bye-bye 25.
Anyway, so if you have 401k, a403B, and or a 457 plan, then
you can put up to 24,500.
(06:30):
If you're age 50 and above, thenyou have what are called
catch-up contributions, oryou're able to put more money
in, and that can go up to$8,000.
So you could put a total of$32,500.
However, there is a provisionthat if you're age 60 to 63, you
can have a higher catch up limitup to$11,250.
(06:51):
$11,250.
So your total would be then$35,750.
And that's again if your planallows it.
That does not prevent you,however, from having a IRA if
you choose to.
You could have a Roth, you couldhave a traditional IRA.
There's a couple caveats tothose IRAs, however.
(07:13):
So one is deductibility and oneis the ability to contribute.
So just because you're a teacherand often, you know, your salary
is rather low, but you could bemarried and your husband, your
wife, whomever, has a very highsalary.
So your combined joint incomecould be significant.
That may really impinge on yourability to make a deductible
(07:37):
contribution to your traditionalIRA, as well as if your husband
contributes to a 401k or youcontribute to your 403B, you
have these deferred compensationplans where it's going to again
impinge on your ability to takea deduction, write it off on
your taxes on what youcontribute.
So you can make yourcontribution, but you may not be
(07:59):
able to deduct it.
On the Roth IRA hand, you maynot be able to contribute at
all.
But you can sometimes do aconversion from a traditional to
a Roth and pay your taxes nowand then leave that money
sitting in the Roth.
And then again, as it's as longas it's in there at least five
years and you're over 59 and ahalf before you take it out,
then everything comes outcompletely tax-free.
(08:19):
You definitely want to work withyour tax advisor.
You know, if you want exploringthese limits to a much greater
degree, I'm giving you kind ofthe high-level look here.
But anyway, back to the 403B.
So there's also just one littlecaveat.
Some institutions offer it, somedon't.
If you have 15 years of servicewith your qualifying employer,
(08:39):
there is a special catch-upprovision that may apply where
you can put in up to$3,000 extraper year, up to a$15,000
lifetime cap.
So there's some other limits,etc.
And that's again why you want towork with your school district
just to find out exactly whatyou can do.
You don't want to overcontributeto any of these.
But again, the whole idea hereis for you to put as much money
(09:01):
as you can aside, and it's therefor retirement when you need it.
Now, as I mentioned, you want totalk to the actual investment
company because your schooldistrict will pick the company
that they choose to work with.
And there's just a wide varietyof them.
And it could be some company youknow, it could be some company
(09:21):
you've never heard of, but itdoesn't matter.
So you will work with thatcompany and you also will want
to find out if you have a 403B,a strict 403B, or you have a
what's called a 403BA.
So if you have just your regular403B, then that really means
that you're really stuck intothe land of annuities.
(09:44):
You can only contribute to anannuity.
And there's pluses and minusesabout that.
If you have a 403B7, thengenerally you can invest in a
wide range of mutual funds.
So it doesn't mean you caninvest in everything like you
could with your IRA, right?
You have a really unlimitedamount of choices to a large
(10:04):
degree, uh, which you can investin with that.
But you will have your limitedchoices.
Often it's more than enough toat least allow you to create a
good solid foundation base foryour account.
And if you look at the totalityof all your accounts with your
financial advisor or yourself orwhomever, you know, gives you
advice and guidance or howeveryou decide, then you don't want
(10:26):
to be overweighted in any onething.
You don't want to beoverweighted in large caps, you
don't want to be overweighted insmall caps or whatever.
You know, you want to make itharmony, right?
Everything needs to worktogether.
And you really want to look ateverything so it makes sense.
Because you can shift some stuffaround, you can lower your
contributions in this andredirect this to that, and you
(10:50):
know, move money from A to B.
There's all sorts of things thatyou can do.
There's also the fees that gointo all of this, and you really
want to pay close attention tothat because those fees are just
taken away from your savings,your how much is setting aside
for yourself.
So, especially when you'retalking about the land of
annuities, you really need toask a lot of questions.
They need to really carve thatout so you know what the fees
(11:12):
are, right?
Shouldn't be a surprise.
They should be able to tell you,show you.
Similarly, if you have your403B7, your mutual fund land,
and you want to, again, askquestions about the fees, not
only if there's management fees,if there are underlying fees,
what the expense ratios are,they should be able to tell you
all that as well.
(11:32):
Because these are just commoneveryday questions, and they
will be very they can easilyanswer these questions for you.
That's what I'm trying to say.
So it's it's no big deal.
You should ask away, ask away,ask away until you get all your
questions answered.
But again, you know, work withsomebody if you really feel like
it's out of your league and youreally rather, you know, at
(11:55):
least get some good advice andguidance, and nothing wrong with
that.
But the thing again, just totransition back to deductibility
real quickly, but for 2026, thephase-out limits for uh
deductibility for traditionalIRA contributions when you're
covered by an employer-sponsoredplan.
Then if you're single and coverby plan, then the phase-out
(12:17):
limits go from 81,000 to 91,000.
And married filing jointly,cover by plan, the limits go
from 129 to 149.
So what that means is you'reunder that, usually you can make
a full contribution.
If you're somewhere in that$10,000 middle range, then your
contributions get lower andlower.
And if you're over that, let'ssay$91,000 cap or$149 cap, then
(12:40):
no contributions.
So you don't want to makecontributions to an IRA again,
willy-nilly, either, becauseeverything should work together,
everything should make sense,everything should be according
to plan.
Plans are adjusted, yes, they gooff course, yes, but you know,
course corrections happen, nobig deal.
But you don't want to makeexcess contributions to an IRA
(13:01):
and then be subject to an excesscontribution penalty.
You don't want to do that.
And certainly in some lands of,let's say, four or three B
annuity lands, moving money inand out of that thing is not
likely.
So once you're in that, you'reprobably gonna be in it for the
long haul.
So you really want to beconscientious and cautious about
you know what you're gonnainvest your money in because as
(13:22):
you're sitting here todaythinking, well, that sounds
fantastic.
I don't mind doing it.
I think that's I'm gonna goahead.
That's fine.
What if you leave your schooldistrict, right?
Because then a lot changes.
Everything might change.
You may be able to just simplyroll your 403B from one to
another, fine.
You may not be able to do that.
You may be able to roll it,let's say you quit teaching
(13:43):
altogether and you are becomestay-at-home dad, stay-at-home
mom, whatever.
Um, you go from the nonprofit tothe corporate world, then you
would probably want to roll thatinto an IRA, a rollover IRA.
And there are all sorts of youknow ways that you can do that.
So all I'm saying is you have tolook ahead to your greatest
(14:05):
degree.
Don't lock yourself in if youcan help it, and be very
conscientious about what you putyour money in, and certainly ask
as many questions as you canabout fees.
So not everybody gets access toa 457 plan, especially let's say
if you're at that cocktail partyand you know, this blowhard is
you know bragging about, youknow, his 401k, and you can just
(14:27):
simply chime in and say, yeah,you know, I've got a fantastic
403B, plus I have my 457 planthat's really doing well.
And leave it at that.
That will probably shut him upbecause he has no idea what
you're talking about.
I almost guarantee you.
Unless you're talking to afellow educator, right, that has
some knowledge of that, thenthat's a different story.
(14:48):
But you guys can swap stories.
But if this is somebody in thecorporate world, my guess is
they don't even know what a 403Bplan is, and they have no idea
what a 457 plan is.
So one is qualified, one is nonnon-qualified.
And non-qualified rules, theyapply on a 457 plan.
They're different from the 403B.
So it's not anything you have toget into the weeds about.
(15:12):
You certainly don't want to, inmy opinion, just speak out of
your range because then you kindof look like a fool.
So you just want to say, yeah,my 403B is doing great.
I have also a 457 plan that Ithink I've done really well in,
and so far so good.
I'm happy with it, and I havereally great advice from an
advisor I work with.
(15:33):
I think I'm gonna go get adrink.
Uh, would you like one?
Boom, that's it, right?
Walk away.
Anyway, I think that's about itthat I want to say about that.
There's a lot more you could doin terms of again having an
overall plan, which I wouldhighly recommend.
And just circling back to thecash, don't forget, you can put
(15:54):
your money in various buckets ifyou want to, however, you want
to do that.
Whatever cash is at home, justmake sure it's secured because
if there's a fire, that's theend of that.
And generally the insurancecompanies are gonna be very
stingy in terms of repaying youon the cash you have at hand,
unless you can prove it.
And that's gonna be kind oftricky to prove.
(16:15):
So I don't usually recommendkeeping a big amount of money at
the house.
Plus, what if you get robbed,right?
That could happen.
Someone could come in and takeall your money, take all your
jewelry, etc., etc.
You know, uh just speaking aboutjewelry, just reminding me, you
know, my mother's insurancecompany contacted us and said
(16:35):
that we've had this insurancepolicy for it's called a
valuable personal property for along time.
And I think she only used it onetime for a claim because she
went to a wedding and she lefther watch in the hotel room, and
that was the end of the watch.
And it was a gold watch.
And luckily we had a I think wehad the receipt for it, and they
(16:58):
weren't able to replace exactbecause it just didn't make they
didn't make that model anymore,and they gave her the closest
equivalent.
And so that was that.
But now what they were tellingus is we need to take photos of
everything and submit it to thembecause they want to know what
they're insuring, where beforeit was like blanket coverage,
but now they're getting a lotmore specific.
(17:19):
Of course, I don't know aboutyour insurance company, but you
know, they want to be a lot morespecific about what they're
covering.
And they also told us generally,depending on the item, it will
need an appraisal.
So you usually have to have anappraisal that you pay for.
You go to the jewel, whoever,whomever does the appraisal, and
they have to be qualified, andthen you pay whatever you pay.
(17:39):
And then you will have your copyand you want to send that.
You definitely want to keep thatcopy on hand, and it might be a
good idea just to ship it toyour insurance company as well,
if you have that kind ofcoverage.
If you're unsure what kind ofinsurance coverage you have
regarding your valuable personalproperty, you know, because that
covers a wide range of things.
It could be paintings, it couldbe, you know, antiques, it could
(18:02):
be, of course, jewelry, like Isaid, it could be, you know,
some Faberger egg, I don't know.
But you really want to make surethat you're fully insured for
whatever property you want tohave replaced, and make sure
that to the greatest degree,like I just said, that you have
knowledge of what it's worth.
You know, you go to the youwatch any of those antique
(18:22):
roadshows, right?
And people have, oh, this hasbeen on my white on my wall for
years, you know, my grandma hadit, and da-da-da.
And the next thing you know,they tell you it's like a a
hundred thousand dollar paintingor a very unique, valuable vase
or vase or you know, ring, whathave you.
It doesn't matter.
All I'm saying is it's a goodidea for you to just have those
(18:42):
things insured.
If you have to take out aseparate policy, so be it.
Generally they're prettyinexpensive in the grand scheme
of things.
And like really everything thatyou have in your house, you
should take pictures ofeverything.
Because when the fire happens,tornado, earthquake, whatever it
is, it's really, really hard foryou to probably remember every
(19:04):
single thing that you have.
And it's gonna be thousands andthousands of dollars that
they're gonna, you know, you'regonna try to get from the
insurance company, which isgonna be more difficult.
So at least if you have somephotos, this is what the inside
of my house looks like.
These are some of the items thatI had, and da-da-da-da-da.
You know, it's a lot easier.
You know, years and years ago,I'll just tell you a quick
story.
(19:25):
I was living in this um gardenlevel uh apartment, and I went
out and came back, and the doorhad been kicked in, and the
frame was all busted out, and Iwent in and looked around just
to see if anybody was there.
Nobody was there, but everythinghad been pulled out.
So they ransacked the apartment,and this was way back when, you
(19:47):
know, when you used to have CDs,that was your primary source of
listening to music, except forthe radio, and they had taken a
whole bunch of CDs.
I don't even remember what theywere, it was just a bunch were
gone, and they had taken myStereo equipment and they took
my uh VCR.
This is before before DVDplayers, and they had used uh my
(20:07):
own pillowcases to haul thestuff away.
Anyway, so I called the police.
The police came and they didtheir little investigation,
trying to, you know, figure outwhat's what, asking me
questions, and one of thequestions they asked me, they
said, Well, do you have theserial numbers for any of the
equipment that was taken?
I said, Oh my gosh, you know, Iwas supposed to, I remember I
(20:28):
had these registration papers, Ihad the serial numbers sort of,
you know, attached to them, andI was supposed to write that
down, da-da-da.
Well, lo and behold, I go overwhere they were supposed to be,
and there they were, rightthere.
So I had slipped them underneaththe equipment with the intention
of filling them out, which Inever did, but the whole point
was I had the serial numbers,which I gave to them.
(20:50):
Then they they told me, theysaid, Well, that's great, you
know, blah, blah, blah.
And just to let you know, you'reprobably gonna get robbed again.
I said, What?
Why?
He said, Because they know thatyou're gonna replace the things
that they stole.
He said, That happens a lot.
And I was like, holy cow, thatis crazy.
I ended up moving from thisapartment anyway.
(21:12):
But it was a very surprise tome.
But anyway, back to my story,when we talked to the insurance
company, they were they wereprobably they're probably a lot
more strict now than they werethen, but they gave us, I don't
remember how much, like ten ortwelve dollars per CD, and we
just came up with some numberbecause I had no idea how many
it was.
It was a lot, that's all I know.
But um, one day I was sitting atwork and I get a call from this
(21:35):
detective, and he detectivesays, Hey, do you have any
midgets in your family?
That's it, that was his word,not mine.
Small person, I guess.
Is that what it is today?
Dwarf.
I'm not really sure.
Sorry if I'm offending anybodyshort of short stature.
Anyway, so I said, No, I have uhthough an uncle who's a jockey.
(21:56):
And he's like, No, no.
He's like, the reason I'm askingyou is because he came into a
pawn shop with your VCR andtried to pawn it.
And because of course they hadthe serial number, he's like, we
found it and we arrested him.
And he said, So I just wonderedif he it could be anybody you
knew because you guys have thesame last name.
(22:17):
I was like, wow, no, no, uh,it's no one I know, and glad I
don't know this person becausethat sucks.
But anyway, there's just a goodexample to carry renter's
insurance.
So renter's insurance can comein very handy and it's very,
very inexpensive.
So if you're a renter, make surethat you take out renter's
insurance.
(22:37):
Anyway, I really think that'sabout it.
We are closing out the 2025,like I said, and moving into
2026.
Hopefully, that's gonna be areally great year for you, for
me, for the country.
I'm really hoping.
And I'm gonna continue my seasonsix for I think it's gonna stop
(23:01):
in February, March time frame.
And then we're gonna go intoseason seven.
So I can't believe it's been solong, but hey, it's growing,
building, everything's goingwell.
One thing that I want to remindeverybody about is to go to the
pinkmoneypodcast.com website.
There's a lot of things that areout there.
(23:21):
Oftentimes when I'm talkingabout things like 403B, 403B7s,
that has a lot of information.
I'll create a companion post soI can be more detailed about the
information.
I've also created what arecalled postcards.
Postcards are kind of, as Idescribe them, like a 30-second
elevator pitch.
So you get just the highlights,just enough to be dangerous
(23:44):
with, just enough for you,again, to hold a very brief
conversation with somebody, notenough to get into the weeds.
If you really want to go intothe weeds about any topic, ask
ChatGPT, go do your own researchor whatever you want to do, so
you can go as deep as you want.
But again, these are just somehigh-level points you can latch
on to and go, oh, okay, at leasthave a brief understanding of
(24:05):
what this means, and you can goabout your day.
I think there's about six orseven of them out there right
now, and it just depends.
I keep adding as I come up withideas or things that come to me.
And there's a resources pagewhere there's a lot of
information on there as well,and there's some links that you
can go to, especially as we'retalking about the IRS and regard
(24:28):
to some of the new changes forthe tax law in terms of no tax
on tips, no tax on overtime,which doesn't mean that really
at all.
But I won't get into thatbecause you can read about that
online or listen to the episode.
And speaking of episodes, I madethem so that you should be able
to click on them very easily andget to whatever you want.
(24:48):
They're also categorized.
So if you want to listen tosomething specific about, let's
say, retirement or taxes, etcetera, then you can click on
that and it'll show you theepisodes that are categorized
that way.
And of course, there's a pagethat I also like and I put out
there called Heroes.
And I like that page becausethere's people that I think are
significant in the LGBTQ world.
(25:11):
They've either done something uhextremely significant or they
have a very high profile andthey set themselves up on a
high-level bar, which I think isgreat, and we should all aspire
to be as great as they are, ordo some of the things that
they've done.
And I just I think that there'sa lot of people we could add, a
(25:31):
lot of people I want to add, andI just keep adding them as I go.
But I try to make it broad aspossible and cover as many
people because there's just alot of people doing a lot of
great things and have done a lotof fantastic things.
So kudos to all them.
And then there's my playlist.
Uh, Jerry's playlist is outthere, which has a bunch of
(25:51):
songs I've pulled from a widevariety of genres, just ones
that I like.
Generally, they're all upbeat,happy ones.
I don't really go down the pathof the Patsy Klein uh with
everybody, but you know, if Ineed to, I will.
But uh anyway, another story foranother time.
But I created one for Christmas,another one for New Year's Eve,
and there's a couple videos outthere that are really fun.
(26:13):
I like Kylie Minogue did herXmas song, which I think is the
number one Christmas song rightnow, and also Patty Brooks her
disco cracking Christmas Carol,which is just um one of my
favorite videos.
I just love it.
Anyway, I'm rambling.
You guys got better things todo, and that's about it for me.
(26:33):
And I will talk to you nexttime.
Have a happy new year.
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