High-Fee 403(b)s Are a Losing bet

BOSTON (TheStreet) -- I'm generally not a gambling man, but I'll bet country singer Kenny Rogers was not thinking about retirement plans when he wrote the song The Gambler. Yet the popular lyrics -- "Know when to hold 'em, know when to fold 'em" -- make good financial advice for anyone who holds a 403(b) plan.

While a 403(b) plan can be an excellent way to save, it's important to play your cards right and take the time to review the specific investments offered in your plan to determine if it's the best option for your retirement savings.

While a 403(b) plan can be an excellent way to save, it's important to play your cards right.

A 403(b) plan is a tax-deferred retirement plan available to employees of educational institutions and certain nonprofit organizations such as hospitals, public foundations and churches, as determined by section 501(c)(3) of the IRS. Like a 401(k) plan, savers may elect to defer up to $16,500 of their salary into a 403(b) plan this year, or $22,000 if they are 50 or older. Employers also may make matching or discretionary contributions into an account.

The plans are sometimes referred to as tax-shelters annuity plans, or TDAs. This is because when they began back in 1958, it was as annuity contracts with insurance companies. Today, a vast majority of 403(b) plans are still dominated by these types of investment structures, from fixed annuities in which an insurance company may guarantee a minimum rate of interest during an account's growth to variable annuities in which savers have some choice over investment options.