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tony

Coulda-Shoulda-Woulda Retirement Story Blog

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Dustin I would say as a retiree , TRY to save as much as you can if you plan to stay in the profession. Its tough early on. I don't know how I spent 30 plus years in the field to be honest. It was tough. If you want to get out than do it while you are young because eventually as you get older you kind of get locked into the profession. To stay happy try and not totally involve yourself in the profession. Walk away each day once school is out and go work out at the gym or take a nap. If you go all in you will burn out. I was often criticized for not attending extracurrular activities and for leaving as soon as school ended but I did it anyway. Those that tried to be all things to all people burned out and did not last. I know this goes against the American work ethic but you must be true to yourself. You and your family deserve time away from your jobs. Time flies and life is short. No-one on their death bed asks themselves if they worked enough during their lifetime.

 

I think no matter what challenges come along you must make saving a priority. As I accumulated money It was very liberating knowing that if I had to quit my job, I would be alright. Having money saved gives you options and doesn't keep you beholden to your job.

 

Hope this answers your question. Its just my two cents

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Many of the comments in the blog are about the high taxes they are paying now because of the Required Minimum Distributions (RMD).

Right now, most of our retirement accounts are in my husbands 401ks (three from three different employers), my 403b, and a small amount in a 457b.

 

We don't qualify for a deductible Roth IRA...what could we do to avoiding the tax bite that the commenters in the blog complain about?

 

Thanks!

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To reduce the the RMDs on large deferred tax assets, you could quit work at say 60 and live at least partly on taxable savings with the result of low taxable income in the 10% and 15% tax brackets. During those years (before age 70.5), convert as much of the deferred assets to Roth IRAs as possible while remaining in 15% bracket. It would be best to postpone taking a pension, if that’s possible. If health care insurance is part of the pension, you may not want to delay taking the pension. If it's not, you could wait until age 65 and Medicare?

This assumes that the tax breaks for the 15% bracket (0% on LTCG) continue. Paying the RMD in the 15% bracket should probably be the goal. If you are still employed and contributing, you could switch to a Roth plan if you would remain in the 15% bracket. If you are already retired and the 15% bracket is already filled with taxable income, I don’t know what you can do to reduce your future RMDs. I think it’s a problem a lot of folks wish they had?

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I just wish they had a Roth 403b or 457b many years ago. I would not have gone tax deferred. The younger folks have it better now. More investing options and access to information on the internet. Unfortunately many start off their careers with high college debt now and can't save.

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Tony, that's great advice and its advice I give to many of the newbies I've mentored: make a plan for work life balance, be an adult outside of work, and you're probably spending too much time grading (an example of spending your time in a way that will provide the most powerful benefit to the students.)

 

I do have to say, if you were in my school, I would have questioned you leaving at the bell each day if you did not do any planning or feedback delivery at home. The fact of the matter is that resources are so scarce and children in concentrated areas of poverty (both rural and urban) today face so many challenges that to be proficient means that you're putting in extra. Or at least, I've not seen the teacher that can call themselves successful simply working to the rules of their contract and no more.

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Dustin.

 

Well I didn't mean I didn't work hard at home and on weekends, just that when I worked an 8 hour day, I needed to go home and take my shoes off. I know all about poverty. 65% of our students were on free lunch and spoke 45 different languages. Their parents were recent immigrants. Many were undocumented and came from some awful schools in their native countries. The high school I worked at was unique in its diversity . The challenges were many.Still. I have seen burn-out galore among teachers and its concerning. Some are driving cabs and working as waiters and waitresses because one day they just got up and quit their jobs leaving their students with unqualified subs for the remainder of the school year. Your students deserve a rested and unstressed teacher.

 

Tony

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