Educating the educators

Every so often, Cassandra R. Stiff receives a familiar distress call from a teacher.

“They will say, ‘I’ve had it: There’s too much paperwork. I’m not spending the time teaching the students. I’m leaving,’” recalled the three-year MDRT member from Marietta, Georgia, USA, whose 400 clients are 95% educators and 80% women. “That’s a very emotionally charged decision, and we have to understand the financial impact on that emotional choice.”

It’s no secret that many teachers are overworked and underpaid. But Stiff has seen how educators considering a new profession typically aren’t asking all the necessary questions about a possible career change, even if they feel it will be less frustrating, more rewarding and more lucrative.

In this situation, Stiff starts by looking at current and hypothetical retirement accounts, making sure that the clients don’t take money from their teacher pension plan. If they did take the money out and decided to return to teaching later, they must start vesting in another pension from ground zero. But if they’re vested and don’t withdraw those funds and return, their vested years of service pick up from where they left off. Without this conversation, she says, a client might regret overlooking the tradeoffs because they focused on the higher salary in the business world without understanding that the school system’s defined pension plan is often superior.

We spend a lot of time partnering with schools, so we stay top of mind whenever there is a retirement or investment need.

Continuing education

In fact, a big part of Stiff’s work with educators — a niche she targeted after leaving a corporate sales role because of her interest in helping women, who compose a high percentage of Atlanta-area public school teachers — involves educating them about their pension and retirement possibilities. She discusses retirement accounts, such as 403(b) plans and Roth IRAs, with school principals and faculty during staff meetings, then follows up by meeting with individuals who are interested in further discussion and planning. Stiff also often loops in the teachers’ spouses, who frequently aren’t informed about the teacher pension plan either.

“We spend a lot of time partnering with schools, so we stay top of mind whenever there is a retirement or investment need,” she said.

Expertise and empathy

If another advisor wanted to follow her lead, Stiff says her approach requires expertise and empathy. The former, of course, comes from thoroughly understanding teachers’ retirement benefits, including the providers of 403(b) plans — tax-sheltered retirement accounts offered to employees of tax-exempt and nonprofit organizations — and any other relevant products being offered. Stiff has seen that many educators don’t take the time to learn about retirement planning on their own, and there usually isn’t anyone else providing this information for them. If teachers don’t receive this guidance until near the end of their career, it’s a passive approach to retirement rather than a proactive one.

“If you can provide assistance along the way throughout their career, you become a valuable asset, and that word spreads quickly,” Stiff said.

The empathy component is driven by the recognition that personal emotional decisions don’t exist in a vacuum. They come with financial ramifications as well. These discussions often lead to highly emotionally charged moments, and Stiff emphasizes that advisors must be active listeners while delivering suggestions with compassion.

“They could be making what I perceive as a bad decision, and I’m very mindful of how I share that,” she said. “I don’t want my tone to be anything other than compassionate or understanding.”

For example, a school administrator who had purchased a home with a partner to whom she was not legally married was concerned about how the end of that relationship would impact her finances and her stake in the property. Stiff explained that because they weren’t married, the client’s former partner had no legal claim to her retirement fund, but she would need to be bought out of the house because the property was in both of their names. Stiff referred the client to an attorney, who assisted with the legal aspects of the home asset.

“I often share with women that if you’re living with your partner, it’s very dicey to purchase assets together if there’s no legal marriage,” Stiff said. 

This, of course, can vary on a case-by-case basis. But in many instances, Stiff has seen a great opportunity to work with women, who are underserved in the financial world regardless of their profession. While she has never had a male client brought to tears during a meeting, it has happened several times with female clients.

Like the educator married with two children under 10 years old who prided herself on managing the family’s financial decisions and spending. With Stiff’s help, the client, who had little money available to set up the retirement account she wanted, discovered that she didn’t know where her family’s money was going or the degree to which they were overspending. 

“I obviously didn’t take pride in bringing her to tears, but I took pride in arming her with more skills and resources, so she stays on track or has the know-how to stay on track with her goals,” Stiff said. “It was a revelation for her, and those experiences make me feel really good about what I do.

“Money in general is very emotional.”