403b Account?

Discussion in 'General Education' started by YoungTeacherGuy, Jan 4, 2018.

  1. YoungTeacherGuy

    YoungTeacherGuy Aficionado

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    Jan 4, 2018

    So...I turn 36 next month and will be wrapping up year #12 (yikes!) in my district. Whew. Time has flown by so incredibly fast.

    Anyway, I finally decided to open up a 403(b) account! My CalSTRS (California State Teachers' Retirement System) account may or may not be enough to live on once I'm ready to throw in the towel, so I figured I'll need a supplemental pot of $ to dip into.

    Has anyone else opened up an account such as an IRA or 403b? Just curious.
     
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  3. miss-m

    miss-m Habitué

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    Yup! I opened one last year when our building financial advisor person came to visit. I was able to contribute quite a bit per month, too, since my monthly expenses were fairly low. I’m not so lucky this year because I’m in a different position (making less for now) and my rent is higher, but it should pick back up next year when I transition back into a salaried position.

    Our state has a retirement system as well, but I doubt the 6% contribution is enough to hold me over when I retire, even though that’s still a long way off (almost 40 more years).
     
  4. gr3teacher

    gr3teacher Phenom

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    I'm going to open it up when I move into administration (hopefully 2-3 years).
     
  5. teacherintexas

    teacherintexas Maven

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    I have a 403b. It’s pretty painless savings.

    I did hear of something better than 403b that I want to start next year but I can’t remember the number/letter combination at this minute. It’s in paperwork at school.
     
  6. readingrules12

    readingrules12 Fanatic

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    A Roth IRA is better as all the $$ is tax free. 403b is good, but $$$ is tax deferred--good but not as good. Unless you get a match on the 403b (then the free $$$ makes it worth it), I'd go with the ROTH.
     
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  7. futuremathsprof

    futuremathsprof Groupie

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    I opened up a Roth IRA when I turned 24. It currently has $10,000 in it and will have over $1,000,000 once I reach retirement age. If I withdraw the recommended 4% each year I will never touch the principal and have $40,000/year in income along with my other investments.
     
  8. jadorelafrance

    jadorelafrance Cohort

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    How much do you contribute per paycheck?

    I want to open one in the next couple of years. I currently am contributing to a 403b but want to have a tax-free withdrawal option.
     
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  9. TeacherNY

    TeacherNY Aficionado

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    I work in a private school so we have a 403b which my employer contributes to. I also put $$ per paycheck. Right now I put in only 3% of my paycheck I think but eventually I will increase it. There's a really helpful guy who comes to our school a few times a year to help us if we want information or to change something with our account.
     
  10. Zelda~*

    Zelda~* Devotee

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    Love my 403b. Money is taken out of my pay before taxes. My employer does not contribute, I had no idea that was even a thing, lol.
     
  11. MsMar

    MsMar Fanatic

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    I have a 403b and have been contributing for a while. Hubby has a 401k with a small employer added contribution.
     
  12. NewTeacher2016

    NewTeacher2016 Companion

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    set up an automatic contribution of $450 per month.
     
  13. nklauste

    nklauste Comrade

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    I have a 403b and have since my first year teaching. I always contribute what my employer will match. My first year was about $25/month, second year (different school) was $80/month, years 3-5 no match (so I didn't contribute), and now last year and this year have had matches of $900-$950/year. I figure at least I'll have a bit more than the TRA that Minnesota has for teachers currently.
     
  14. TrademarkTer

    TrademarkTer Habitué

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    I contribute 600 per month. Unfortunately no match here : (. I am up to around 34-35,000 and growing, which is a nice little extra stash. I might lower my contribution soon though, and switch some into a Roth starting next year.
     
  15. NewTeacher2016

    NewTeacher2016 Companion

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    I use Roth and HSA only because of tax advantages

    Max annual contribution for Roth = $5500
    Max annual contribution for HSA (single) = $3450

    I leave my pension alone, I don't touch that one.
     
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  16. Tyler B.

    Tyler B. Devotee

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    Fund your Roth to the max first. When you pull money out of the Roth at retirement, it comes out tax free, so when you withdraw a dollar, you pay no taxes on that dollar. Put your Roth into Index Funds or ETFs to get the lowest fees. I use Vanguard Funds.

    Fund your 403b to the max after you make sure your Roth is funded, but when you pull a dollar out, you'll pay 40 cents in taxes (in my state), but it's still a screaming deal.

    To find a good 403b plan, look at expenses. Some come loaded with fees to contribute, fees to manage, and even fees to withdraw. These fees can cause you a huge loss. My current 403b contributions go to a Custodial 403b and into a super low fee Index 500 fund.

    This is a topic all teachers should study, especially if your state has a shaky or non-existent pension fund.
     
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  17. futuremathsprof

    futuremathsprof Groupie

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    I recommend you contribute $5,500/12 or $458.33/month if you have a 12-month contract or $5,500/10 or $550/month if you are paid on a 10-month contract.
     
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  18. allaphoristic

    allaphoristic Rookie

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    I've had a Roth IRA since I graduated college. I contribute 10% of my income in addition to my CalSTRS.
     
  19. YoungTeacherGuy

    YoungTeacherGuy Aficionado

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    I knew this thread would stir up great conversation! Y’all are among the smartest people I know (yet interestingly enough, I’ve never met a single one of you)! ;)
     
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  20. Rockguykev

    Rockguykev Connoisseur

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    My 403b has the worst returns of any investment I've ever made. I made more in a market index fund in a year than I've made in any of the 10 in my 403b.
     
  21. futuremathsprof

    futuremathsprof Groupie

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    Yeah, don’t go with Valic and other investment firms with high fees. You’ve lost quite a bit in retirement over those 10 years...
     

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