Author Topic: Which way to invest?  (Read 1960 times)

bradb

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Which way to invest?
« on: November 26, 2013, 05:46:22 PM »
I am a 47 year old teacher. In four years, Iíll have the required minimum 30 years in my pension plan to retire at 4K per month. That figure tops out at about 6K per month if I were to continue teaching until I turn 58. Hereís the crux; Iím not really sure if I want to work past 30 years just boost my pension fund if I could retire earlier and backfill with my other funds. My wife is also a teacher, but is about 10 years away from reaching her 30 years. We have two children that will be nearing college age at the time I would like to retire.

Recently converting to Mustachianism, Iíve been lowering monthly expenses. I recently switched to a cheaper phone plan, found lower car insurance, started biking to work on nice days, and have found other ways to cut back. Our only debt is $250,000 on our home that is worth about $550K. Our assets are nearing $800,000 including all retirement plans and the equity in our home. After all expenses, we have about an extra $2000 to pump into savings a month.

Hereís my question. Should we put that $2000 into our current 403b tax-deferred plans or invest in Vanguard Index Funds or some other plan that is more flexible? In our two 403b accounts we currently have balances of 90K and 60K. Would it make sense to boost those accounts? Those accounts are not accessible without penalty for another 12 years or so.

I would really like to retire from teaching in the next 4-5 years, even if it means part-time work following that. Any advice from my fellow Mustachians?

Lans Holman

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Re: Which way to invest?
« Reply #1 on: November 26, 2013, 05:49:29 PM »
This is a situation where it would be really helpful to know your expected expenses after retirement.  A lot of the decision making process will be based on that number and how it compares to your pension.

bradb

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Re: Which way to invest?
« Reply #2 on: November 26, 2013, 06:30:38 PM »
Ideally, we sell our house early in retirement and pay cash for something smaller. That would lower expenses significantly as we would have no debt.

ShortInSeattle

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Re: Which way to invest?
« Reply #3 on: November 26, 2013, 06:38:20 PM »
This is a situation where it would be really helpful to know your expected expenses after retirement.  A lot of the decision making process will be based on that number and how it compares to your pension.

+1