Jump to content

All Activity

This stream auto-updates     

  1. Yesterday
  2. MNGopher, I absolutely agree!!! Because you would no longer be employed, you could roll your entire 403b into an IRA. You could then supplement your Option A ($4050/mo. for life) with withdrawals from your IRA. At the same time, once a year compute your most favorable amount for a Roth conversion. Perhaps you could do this until age 70 and then take your maximum SSA benefit. Everybody's arithmetic is different but, personally, I prefer to pay the tax and take advantage of compounding on a tax-free basis. I like what you're doing. Bob
  3. You didn't say why you want to do this? Do you think you are going to get a higher return in the market by reinvesting the added benefit? I would stick with your benefit plan. The vast majority of so-called non-fiduciary financial advisers would highly recommend that you accelerate because we all know why! They want to manage that fund for you. Also, the benefit decreases to about half for option A and about 2/3 for option C! That's a huge decrease. Here is where it might make sense for someone with a lucrative pension benefit such as an administrator. If you had 40 years service and had a lucrative pension benefit, acceleration might be a way to lower your income taxes in the future by converting the accelerated money into a backdoor Roth. But this is assuming your benefit is tax-deferred (mine is) and you can convert that money into a Roth (not sure of the regulations).
  4. So you’re going to be retired and NOT receive a pension for several years? I think I’d basically ignore what is or isn’t actuarially neutral for them and think entirely about my circumstances. The most naive approach is to estimate when you’ll die and calculate (in inflation adjusted terms) which payout gave you more money. Of course this is incomplete because you’d have to model opportunity cost. Delaying will lower your taxes now, but increase them later. Delaying might mean that you can’t take the early pension payouts and invest them for a nice return. I’m sure there are more opportunity costs. If you want to be precise you’d have to build them all into a model and see what looks better. Of course at that point you’d want to tweak your assumptions (like life expectancy) to see how much they affect the end result...that’ll allow you to better account for risk/uncertainty. For example it probably wouldn’t be worth delaying to get an extra dollar if your assumptions are right, but risk 100k if your assumptions are wrong.
  5. yea , same here, they now pay much more in and get much less out. Eventually, educational pensions may be a thing of the past. Maybe maybe not.
  6. It's not as good for younger teachers. I was fortunate to start paying in to the pension fund when I did. People who started teaching just a few months after me will have to work many years longer to get the same benefit.
  7. Last week
  8. Life is certainly unpredictable and no decision looking into the future is ever 100%,but you and me are in agreement. Your state pension is much more generous than Virginia's.
  9. Personally, I can't imagine anyone missing work in any profession unless it was stress free and full of perks. As a retired educator, all I can say is my blood pressure is way down now and I'm 12 pounds thinner too. I don't miss the stress and my doctor telling me I need to be on anti -deppressent which I refused And i don't have an identity crisis. But we are all different. https://www.marketwatch.com/story/these-are-the-bad-things-about-early-retirement-that-no-one-talks-about-2018-09-26?siteid=yhoof2&yptr=yahoo
  10. Thanks Tony, I'm not a math whiz either, but my thinking is much the same as my social security thinking, that being that if a person is healthy and doesn't need the extra money right away, well, you might as well let it sit and get a higher lifetime benefit by delaying. We don't have a lump sum option in Minnesota, and there are a bunch a different options on survivorship % payout for the beneficiary. If I just look at the No Refund (no survivor benefit) as a baseline it's basically...Option A: 4,050/mo. for life, Option B: 6,350/mo. until age 62 and 3,100/mo. beyond 62, Option C : 5,800/mo. until 67 and 2,100/mo. there after. I'm rounding numbers off, and all 3 of these projections assume retirement at age 57 with 33 years teaching. The beneficiary options are also good and the monthly amount only drops off about $100-200/month depending on if you choose 100%, 75%, or 50% survivor payout. There is also a "bounce back" so that if your spouse/beneficiary dies first, you automatically bounce back to the highest amount. I'm leaning towards not accelerating the pension. I want some low income years between age 57 and Social Security, where I might be able to take capital gains at 0% and do some Roth conversions from my 403b.
  11. MN GOPHER Good to hear from you. I am just offering my two cents not based on math or logic so I may be off because I am not familiar with accelerated payment concept. In Virginia, you can take a lump sum payment upfront upon retirement with a lower pay out through the life of your pension. Many teachers do that.I assume those that do don't have much retirement savings . And some make unwise decisions with it like buying new flashy expensive cars or taking expensive vacations with it.. I think they are rolling the dice.But if it were me I would not accelerate your pension if you are healthy and are taking good care of yourself through exercise and good nutrition and regular doctor visits. I guess if you truly plan to call it quits at a fairly young age of 57, you will possibly need more money to live on but since you have saved money in retirement accounts you could count on that or work part time. Also if you are married or have a partner that might be extra support. I bet if I had math skills the numbers would clearly show that an accelerated payout is not a good deal for you.But i will let the math gurus on this site correct me if i am wrong. You seem well covered with social security (you can take it early at 62) and retirement accounts and a pension so whatever you chose I think you are going to be O.K. I would hope you will have medical coverage through your school system at a group rate until you reach medicare age. That would also be a consideration. Now if you are in poor health, had to pay higher premiums for independent health insurance and didn't qualify for Social Security in your state than I might have a different opinion. I hope I understood your post correctly and I hope I have helped. Let us know what you decide. Tony
  12. Although I'm still 3-4 years from retirement (when I will be 57-58), I recently met with a counselor from the Minnesota Teacher's Retirement Association, so that I could weigh some options. One area that I could use some feedback on is the option to accelerate my pension. I will have the option to accelerate my pension pay out to 62 or 67 (or anywhere in between), and then for the rest of my life the payout would be lower. They ran several projections, and I assume the numbers are actuarially neutral, for normal life expectancy. I am leaning towards not accelerating, because a.) I am in in good health and have a longer than average life expectancy based on my relatives, and b.) I have enough saved between my taxable and tax advantaged accounts that I don't need the extra pension income for my life style. Is there any good reason to accelerate in my situation? Has anyone else had this decision to make? Of the two retirees that I have talked to that did accelerate, one was happy with it and one regretted it, but they didn't explain further. The stats say that only about 1/3 of Minnesota retirees choose the to accelerate their payout. Anything I'm not thinking of? I will probably wait to take SS until at least my full retirement age.
  13. Ed, unless you have actually taught over time in a K-12 classroom., it would be very difficult for you to accurately ascertain what it's like today to teach and the changes that are occurring because of technology overuse, bad parenting, poverty, and bad student behavior . Also , the issues mentioned may be more prominent and /or specific to certain school environments and communities than others. Now that I know where she taught, same place I also taught, I get where she is coming from. It could very well be though that she simply did not have the temperament to be a teacher in the first place but I do know my past school system presented and still presents some serious challenges.
  14. I suspect I’ll hold the minority opinion here, I didn’t find the 5 listed arguments to be particularly persuasive: 1. This argument is as old as time and I’m tired of hearing it. Every generation gets labeled as inferior to the last, yet somehow when you look through the volatility, civilization manages to improve rather than regress. In this case, I guess she is arguing that this generation of parents/society is getting it all wrong relative to older generations. I’m not buying it. 2. She didn’t even provide evidence that relationship building is hindered by preferring teachers with a basic understanding of technology or giving children one to one access to technology. She just states it as fact, a fact that I suspect isn’t actually true. The access I had to technology as a student changed my life and prepared me for my career as a Software Engineer. 3. She seems to be arguing that training diminishes quality instruction rather than adding to. Obviously that isn’t generally true. It would be reasonable to ask for better training or the ability to “test out” of training that is beneath you, but to argue that training hurts quality instruction conflicts with every experience I’ve ever had with training/education. It’s an investment that generally pays off because you’re able to stand on the knowledge and experience of so many people who are probably smarter than you. 4. I have no idea how she proposes we hold parents accountable. While I sympathize with the annoyances that the general public (in this case parents) can often provide...that’s part of the job of a teacher. 5. It isn’t clear what she needed for the kids that was being withheld. I guess dealing with all of the sad aspects of society (poverty, disability, etc) and seeing that show up in children had a negative affect on her mental state, which then affected her physical state. That’s fine, I sympathize. There are lots of jobs I’m not emotionally capable of holding, but it is because of who I am, not a defect in the job.
  15. Yes I apologize if I caused confusion Ed. I read Moe's resignation comment and soon after ran into this teacher's facebook post from my school system that also resigned on Yahoo news. I did not know at the time how close to home this teacher actually was LOL! Both resignations were similar( somewhat) in sentiment. The local paper here picked up on her facebook post which has gone viral throughout the country which struck a nerve. I admire the candor she expressed in teacher frustration. And she is not wrong unfortunately. The 403b arena is only one area that needs improvement in Education. Other obstacles seem just as insurmountable unfortunately.
  16. I’m confused. The Facebook post author is a different person than MoeMoney, right?
  17. FYI I realized today that the young lady teacher who wrote the above post I posted earlier is from my school system I retired from after 30 years teaching there and her comments have caused quite a reaction here. Didn't know that when I posted it. https://www.yahoo.com/lifestyle/teacher-shares-why-she-just-120000511.html
  18. That should certainly create uncertainty on their end, but such is the nature of predictions. For most professions, the employer absolutely has immense control. To add to that general topic, I’ve argued (to companies) that making certain changes to directly benefit employees would provide an indirect, but significant benefit to the company. They disagreed because they viewed everything as a zero sum game; if the employee benefits, it can only be at the expense of the company. Naturally they came to view me as their opposition.
  19. Moe I ran into this article right after reading your post. I still think in an ideal situation teachers have it pretty good but the leadership is not where it should be and there is so much bias toward academic learning over CTE learning which might not be appropriate for a growing number of students.. I have found so many of my past administrators lacking in employee management skills. I think most folks in education that are in leadership roles need to be made to take intensive human /employee management skills. They also need to spend more time in classrooms. Some don't have a clue. "Still, that only chips away at part of the problem. As for the rest of it, well, we've clearly got some work to do. https://www.yahoo.com/lifestyle/teacher-shares-why-she-just-120000511.html In Virginia, if you quit, you can usually retrieve a current cash value of your pension based on past contributions. Do you have that option?
  20. You should give them a final exam before cutting them loose. Chances are though many will come back for additional advice .
  21. Ed, I agree with you 100% as I manage my own account on Fidelity and could teach a primate how to set up an index portfolio or target date fund in less than a half hour. However, the idea of managing their own finances scares some teachers to death. They want an “expert” managing their account and in the absence of ethical advisors, they stay with their annuity Shark. I would never pay an advisor any fee as it is an unnecessary charge..for me. However, an advisor charging .6% AUM and investing wisely is much better than an annuity shark charging over 3% and unknowingly selling the teacher Equivest 3.0 with a 60% surrender fee. As noted, I even hope to have my clients fire me when they finally feel comfortable.
  22. 2) I recognize it’s walking away from “a massive amount of money” and most people would not do that, therefore they were surprised that I did. The golden handcuffs. I suppose that should not surprise me. But the employer changed the terms of employment so would they not consider the employee would choose not to accept it? That is what surprised me. I know it all comes down to the same thing - finances. But there comes a day, or a dollar amount saved, that makes someone realize they have enough. (Or reach a magic number of years, or a certain age, or should have enough.) Some people don’t know what enough is so they are afraid to walk away. Some people do, and walk away no matter what’s still on the table. 1) Loving what I do also means I can do it anywhere else. Some people wouldn’t do that but some would embrace the opportunity. It surprises and saddens me to think that employers have, or think they have, so much control and that employees feel they have no control (or responsibility) over their life or career decisions. Here’s the tie-in to this forum - if I hadn’t taken control of my deferred compensation plans and learned how to do that here (thereby taking responsibility of my money/future). I’d have to accept their terms.
  23. It’s true that the income taxes are being paid, but as long as the money remains in the Roth account, the heir isn’t paying taxes on distributions. I’m fully in support of any policy that prevents generational wealth and dynasties.
  24. That’s right, it was proposed and not passed yet. Thanks Ed. the Roth IRA rmd makes no sense to me. Why does it matter if the taxes have been paid? I wonder what Alexander Hamilton would think of our system today?!
  25. Why were you surprised that your decision to quit caught them off guard? If I were them, I would have predicted that you’d stay put (possibly finding a way to earn the other half credit through sub-ing or whatever) for two reasons: 1. You love the work and want to continue working even after having quit. 2. It would have doubled your pension, which is of course equivalent to earning a massive sum of money. The blog kind of reads like there may be some unstated reasons for being unhappy.
  1. Load more activity
  • Create New...