Liz Weston: Investing for retirement — Why you might want to reconsider that 403(b)

abcnews.go.com:

We often talk about 401(k)s and 403(b)s as if they’re the same, but they’re not

Like many other educators, high school science teacher Robert Curtiss of Dearborn, Michigan, thought he was doing the right thing by investing in his school district’s 403(b) retirement plan. Then federal regulators charged the company handling Curtiss’ investments with fraud.

In July 2022, the Securities and Exchange Commission said Equitable Financial Life Insurance Co. had misled investors — mostly public school employees — about what their investments cost. Equitable often issued quarterly statements showing $0 in fees, when in reality the expenses were much higher, according to the SEC. Equitable agreed to pay a $50 million civil penalty to harmed investors.

After hearing about the fine, Curtiss learned that his retirement investments were costing him two to three times what a typical 401(k) investor would pay. Getting his money out would cost even more: the investments, known as variable annuities, had surrender charges of 5% to 6%.

“I felt so frustrated,” Curtiss says. “If I would have known sooner, I would have never put my money there in the first place.”

NOT ALL RETIREMENT PLANS ARE CREATED EQUAL

Like 401(k)s, 403(b)s are employer-provided retirement plans that allow workers to make pretax contributions through payroll deduction. But 401(k)s are typically offered by private sector employers, while 403(b)s are sponsored by schools, universities, religious organizations and certain other charities. The type of 403(b) available to public school employees often has fewer consumer protections than private sector 401(k)s, says Dan Otter, a former schoolteacher and co-founder of 403bwise (, a nonprofit education and advocacy site.

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