Author Topic: teacher retirement options  (Read 3037 times)

mhovancsek

  • 5 O'Clock Shadow
  • *
  • Posts: 3
teacher retirement options
« on: February 17, 2015, 11:06:17 AM »
My fiancee is a teacher. His employer offers several retirement plans- all which are annuities- which have high fees. His employer doesn't match contributions. We have a IRA through Vanguard but we can't contribute more than 5,500 a year to that. 

Since we don't want to put our money in the employer sponsored 403b annuity plan, what is the best option for two stock market novices that want a low maintenance long term account for retirement savings?

terran

  • Handlebar Stache
  • *****
  • Posts: 2136
Re: teacher retirement options
« Reply #1 on: February 17, 2015, 11:13:44 AM »
You can each have an IRA for a total of $11,000.

Do you have access to a retirement account?

Frugal716

  • 5 O'Clock Shadow
  • *
  • Posts: 10
Re: teacher retirement options
« Reply #2 on: February 17, 2015, 11:29:46 AM »
You may also want to try lobbying his district to have different 403b providers added. There are a few low cost 403b options out there.

I thought I had the same issue with my wife who is a public school teacher. However I eventually discovered that their plan had 2 Fidelity options: the first option was an expensive program only sold through advisers, the second option was a trust type account where we pay a $50/yr annual fee and have open access to Fidelity's Spartan line of low cost funds with no additional fees.



clarkm04

  • Stubble
  • **
  • Posts: 182
Re: teacher retirement options
« Reply #3 on: February 17, 2015, 12:24:44 PM »
My suggestion is to find a different district or private school if at all possible as soon as possible.  Like this upcoming hiring season.

Those retirement vitals are terrible.

I've worked for a public district and now work at a private school and both were light years better than what you are describing.

mhovancsek

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: teacher retirement options
« Reply #4 on: February 17, 2015, 12:50:39 PM »
Thanks everyone!

We do both have IRA's but want to save more than 11,000 a year for retirement. My fiancee's job is great in many ways, so he's not about to jump ship.

Does it make sense to go out on our own and open a mutual fund or index fund account to save for retirement there- even if its not billed as a traditional IRA?  Is it possible to open a 403b(7) on our own?  Anyone have accounts to recommend? Vanguard?

terran

  • Handlebar Stache
  • *****
  • Posts: 2136
Re: teacher retirement options
« Reply #5 on: February 17, 2015, 05:06:23 PM »
Unless one of you is self employed then you're pretty much stuck with the two IRAs and whatever retirement account your employers offer. You certainly could open a non-tax-advantaged account -- at vanguard would be a good option -- and invest there. You don't get to write off the contributions on your taxes and you'll have to pay taxes on capital gains along the way. If you're in the 15% marginal bracket then you don't pay on long term capital gains though.

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3519
Re: teacher retirement options
« Reply #6 on: February 17, 2015, 06:06:48 PM »
Is a pension part of his compensation?  That's my most valuable benefit by far.  Most of my other retirement money is in mutual funds, which have done pretty well over the years.   My husband's choices are completely different -- and differentiation is a strength as a couple. 

One unrelated detail:  If you're going to marry a man, he is a fiance, not a fiancee.  A fiancee is a woman who is engaged to be married. 

nirvines88

  • 5 O'Clock Shadow
  • *
  • Posts: 79
Re: teacher retirement options
« Reply #7 on: February 17, 2015, 06:33:26 PM »
You might find some useful information about advocating for change in your school system here: http://www.403bwise.com/

Does your state offer a 401k for employees?  I'm a teacher and the 403b available to me is less than desirable, but I qualify to contribute to my state's 401k plan.    The 401k, despite not offering a match of any kind, is much more preferable than the 403b because of lower cost fund options, including index funds.

As MrsPete said, the pension may be a good deal too depending on which state you live in.  Do you have to pay into social security?  Between social security, a pension, IRAs, and taxable investments you may be good to go depending on your financial needs.

Grateful Stache

  • Stubble
  • **
  • Posts: 196
Re: teacher retirement options
« Reply #8 on: February 17, 2015, 07:59:59 PM »
+3 for lobbying the district. Mine had crappy options until I bugged HR. Now we have access to a 401k and a 457. Sometimes it just takes a squeaky wheel.

Cheers,

- Grateful