Can Irony Explain the 403(b)/TSA “Safe Money” Guarantees?
For 65 years, insurance companies have sold Tax-Sheltered Annuities (TSAs) to public school educators as the safe and responsible choice for retirement savings. The sales pitch worked so well, for so long, that the TSA became institutional culture—as ordinary and unquestioned as staff meetings, attendance rosters, and lunch duty.
But here’s the irony:
The very product teachers are encouraged to trust with their retirement is one of the most expensive, restrictive, and least effective ways to save for that retirement. No fiduciary financial adviser would ever recommend a fixed, variable, or indexed annuity to a young 20-something teacher! (nor older teachers too).
And yet, annuity sales continue at full speed — despite the fact that low-cost mutual funds have been available in the 403(b) since 1974, and that many school districts now offer far better 457(b) plans.
So why, after 65 years, does the same costly product still dominate our profession?
Because this system was built to keep teachers uninformed.
And insurance companies have spent decades perfecting how to exploit that.
- How the TSA Became “The Default” in Public Schools
This didn’t happen by accident. It happened by design.
- From 1961–1974, TSAs Were the Only Option
The TSA was the only 403(b) product available for 13 years — long enough to burn the product into the culture.
Once something becomes “the way things are done,” it stops being questioned.
- Insurance Agents Embedded Themselves Into School Culture
They didn’t just sell products — they made friends with:
- Teachers
- Office managers
- Principals
- Coaches
- Union reps
- Custodians
- School board members!
They joined us at staff lounges, PD days, hallways, parking lots, and even classrooms.
They weren’t just selling retirement products. They were building trust networks.
To be very clear, there is nothing illegal, except for massive conflicts of interest where the salesperson receives benefits and the teacher is offered a subpar retirement product. Again, all is perfectly legal!
Once the signature is collected?
The agents disappear like a meteor burning out in the night sky, always searching for the next victim.
- Convenience Is a Powerful Sales Tool
Retirement meetings didn’t take place at investment firms — they took place:
- In the cafeteria
- In your classroom during recess or lunch
- Next to your car in the parking lot
- At PD days and curriculum trainings
- At your home
- In the union hall
Convenience substituted for quality.
- “Safety” Became a Psychological Hook
Teachers were told:
“You won’t lose money.”
But they weren’t told:
“Your nest egg also won’t keep up with inflation, miss out on genuine stock and bond investments, and your future self will pay the price.”
Fear sells.
And the fear of losing money is one of the strongest emotional triggers in human psychology.
Stronger than the desire for growth. Stronger than logic. Stronger than math.
- The Illusion of Trust Was Manufactured
Many TSA salespeople are:
- Former teachers
- Family members of educators
- Colleagues moonlighting
That’s not an accident.
That’s strategic infiltration.
You don’t sell a bad and inappropriate product by walking in as a stranger.
You sell it by walking in as someone who “understands teachers.”
The Result
The TSA didn’t become dominant because it is good.
It became dominant because it is:
- Familiar
- Convenient
- Emotionally comforting
- Aggressively marketed
- Never openly challenged (The unions have been totally silent forever! And that is not right for their members!)
And the system has remained unchallenged for 62 years because:
- Districts don’t provide investment education.
- Unions avoid the issue, calling it a “private decision.”
- Teachers assume their colleagues know what they’re doing.
- No one who profits is going to speak up.
This is not an accident.
This is a business model.
Steve’s Bio
Stephen A. Schullo, Ph.D. didn’t set out to become a retirement-plan advocate. He was just trying to be a good teacher.
Steve taught in the Los Angeles Unified School District for 24 years and, like so many educators, he trusted that the retirement plans offered at work were designed to help him retire with dignity. Instead, he discovered something very different: layers of high fees, sales commissions, confusing products, and a system that seemed to benefit everyone except the teachers it was supposed to serve.
That discovery changed the direction of his professional life.
Working in the classroom by day, Steve began learning everything he could about investing at night, eventually earning a Ph.D. from UCLA in 1996. He started writing retirement articles for the United Teacher newspaper, helping colleagues untangle the maze of Tax-Sheltered Annuities and 403(b) vendors. Over 13 years, his writing reached tens of thousands of educators across Los Angeles.
Along the way, he co-founded 403bAware, a teacher self-help group where colleagues met after school, asked questions, compared statements, and learned how to recognize high-cost products. He became part of an online community of thoughtful investors, contributing more than 7,500 posts since 1997. His advocacy has been featured in the Los Angeles Times, The New York Times, U.S. News & World Report, and he has testified at California legislative hearings. His union honored him with its “Unsung Hero” award for retirement-plan advocacy.
Steve’s personal financial journey is also a love story. Together with his late spouse, Dan Robertson, he wrote the book Late Bloomer Millionaires, a candid account of how two ordinary public educators, after years of being sold high-cost annuities, finally discovered low-cost index investing and built financial independence later in life. The book is part memoir, part roadmap, and fully a testament to partnership, perseverance, learning, and grace. Dan’s optimism, wit, and steady presence remain at the heart of Steve’s work today.
For the past thirteen years, Steve has served as a volunteer “Member-at-Large” (and former co-chair) on LAUSD’s Investment Advisory Committee, which oversees the district’s 403(b) and 457(b) plans for more than 55,000 current and former employees. Today, those plans hold over $2.8 billion in assets, and the committee continues to push for transparency, responsible stewardship, and low-cost investment access for all employees.
Steve launched this blog in 2012 to share what he learned the hard way:
• Teachers are not “bad with money.”
• The system was built to confuse us.
• When educators help educators, we change the outcome.
He is part of a small but spirited national network of teacher-advocates who gather at 403bwise.org, where we support each other, share resources, and work toward reform.
Because every educator deserves a retirement plan that honors the work of a lifetime.
Stephen A. Schullo, Ph.D. didn’t set out to become a retirement-plan advocate. He was just trying to be a good teacher.
Steve taught in the Los Angeles Unified School District for 24 years and, like so many educators, he trusted that the retirement plans offered at work were designed to help him retire with dignity. Instead, he discovered something very different: layers of high fees, sales commissions, confusing products, and a system that seemed to benefit everyone except the teachers it was supposed to serve.
That discovery changed the direction of his professional life.
Working in the classroom by day, Steve began learning everything he could about investing at night, eventually earning a Ph.D. from UCLA in 1996. He started writing retirement articles for the United Teacher newspaper, helping colleagues untangle the maze of Tax-Sheltered Annuities and 403(b) vendors. Over 13 years, his writing reached tens of thousands of educators across Los Angeles.
Along the way, he co-founded 403bAware, a teacher self-help group where colleagues met after school, asked questions, compared statements, and learned how to recognize high-cost products. He became part of an online community of thoughtful investors, contributing more than 7,500 posts since 1997. His advocacy has been featured in the Los Angeles Times, The New York Times, U.S. News & World Report, and he has testified at California legislative hearings. His union honored him with its “Unsung Hero” award for retirement-plan advocacy.
Steve’s personal financial journey is also a love story. Together with his late spouse, Dan Robertson, they wrote the book Late Bloomer Millionaires, a candid account of how two ordinary public educators, after years of being sold high-cost annuities, finally discovered low-cost index investing and built financial independence later in life. The book is part memoir, part roadmap, and fully a testament to partnership, perseverance, learning, and grace. Dan’s optimism, wit, and steady presence remain at the heart of Steve’s work today.
For the past thirteen years, Steve has served as a volunteer “Member-at-Large” (and former co-chair) on LAUSD’s Investment Advisory Committee, which oversees the district’s 403(b) and 457(b) plans for more than 55,000 current and former employees. Today, those plans hold over $2.8 billion in assets, and the committee continues to push for transparency, responsible stewardship, and low-cost investment access for all employees.
Steve launched this blog in 2012 to share what he learned the hard way:
• Teachers are not “bad with money.”
• The system was built to confuse us.
• When educators help educators, we change the outcome.
He is part of a small but spirited national network of teacher advocates who gather at 403bwise.org, where we support one another, share resources, and work toward reform.
Because every educator deserves a retirement plan that honors the work of a lifetime.