If you’re a teacher retirement is a little different for you than for most; especially if you’re retiring from the public sector. There are a few added considerations that need to be kept in mind that just aren’t common for private sector workers. If you’re a teacher who’s in or nearing retirement, look into these tips:
1. You have a pension, but you can still invest in other tax-qualified retirement accounts. It’s always better to have control over your retirement funds when you can rather than let your employer do it for you. It’s better to be able to control your own costs, investment strategy, and management. Make sure to take advantage of IRAs and Roth IRAs while contributing to your pension. You can contribute (for 2016 & 2017) a maximum of $5,500 a year to IRAs and $6,500 if you’re 50 or older.
2. Contribute to your 403(b) or 457(b) after maxing out IRA contributions if it’s offered. This is important because you should be able to contribute up to $18,000 a year and an extra 6,000 if you’re 50 or older. The 403(b) or 457(b) is especially important because…
3. You may not be contributing to Social Security. Many school districts do not pay into Social Security, which means teachers may not be eligible for Social Security benefits. Your pension alone may not provide all of the retirement benefits you’d like, so make sure to leverage other investment options.
4. Find an advisor who works with teachers. There may seem to be a shortage of advisors who can help retiring teachers because it’s not a typical 401(k) rollover to an IRA. We have helped many people retire from the public school system with dignity. We’d love to help you too.