When should you think about & plan for your retirement?
Illustration based on my article by ChatGPT
Something else they never told me in college...
Basic Investment Advice for New Teachers:
Start Now, Even If It’s Hard As a teacher, you’ll likely never be paid what you’re truly worth — and saving money may always feel difficult. But one of the most important things you can do at the very beginning of your career is to start saving for retirement.
You can’t count on pensions. You can’t count on Social Security. You can’t even always count on a spouse — 40 to 50% of marriages end in divorce. But you can count on yourself. So make sure your future self is taken care of.
I’m Not a Financial Advisor — But I’ve Learned Some Hard Lessons.
Nobody ever sat me down in college and said, “Hey, start saving now.” I didn’t begin until my 30s — and that delay cost me 10 years of growth. My biggest regret? Not starting in my 20s.
So here’s what I wish someone had told me:
1. Open a Roth IRA — As Soon As Possible. A Roth IRA is a retirement account you fund with money you’ve already paid taxes on. When you retire, you withdraw that money — and all its growth — tax-free.
If you start early, your Roth IRA can grow into $1 million or more by retirement. (The annual contribution limit is around $7,000 — but do what you can.) Even saving a little is better than nothing. Try to live below your means. If you have a partner, try living on one income and investing the other perhaps.
2. Where Should You Invest That Roth IRA? A Roth IRA is just the account — you also have to decide where the money goes.
3. Be Careful of HOT Online Advice.
You’ll see flashy “hot stock” tips online. Many are scams — what’s called a “pump and dump.” People hype a stock they own so others buy in, then they sell and leave you holding the losses. Stick to long-term investing, not gambling.
4. When You’ve Maxed Out Your Roth, Open a 403(b)
A 403(b) is like a 401(k), but for public educators.
5. If You Inherit Money, Treat It with Respect.
If a parent or relative passes and leaves you money, don’t blow it on a vacation, car, or luxury items.
Instead:
6. Eventually, You Might Work with a Financial Advisor.
If investing overwhelms you:
7. Should You Pay Off Your House Early?
As I approach retirement, I think about paying off my mortgage. But here’s the math:
8. Cars Are Not Investments
Cars lose value the second you drive them off the lot. Buy used if you can, and drive it until the wheels fall off. I created a small investment account with $20,000 years ago, and it doubled. I’ll use that money to buy a car with cash when I retire — no car payment, no interest.
In Summary: Take Care of Future You
*Postscript: Vanguard 500 Index Fund (VFIAX) has an expense ratio of 0.04% and aims to closely match the performance of the S&P 500. Fidelity 500 Index Fund (FXAIX) With an expense ratio of 0.015%. Schwab S&P 500 Index Fund (SWPPX) a low expense ratio 0.02%. Fidelity ZERO Large Cap Index (FNILX) This fund has a 0.00% expense ratio. The expense ratios may have changed since the publication of this article.
Basic Investment Advice for New Teachers:
Start Now, Even If It’s Hard As a teacher, you’ll likely never be paid what you’re truly worth — and saving money may always feel difficult. But one of the most important things you can do at the very beginning of your career is to start saving for retirement.
You can’t count on pensions. You can’t count on Social Security. You can’t even always count on a spouse — 40 to 50% of marriages end in divorce. But you can count on yourself. So make sure your future self is taken care of.
I’m Not a Financial Advisor — But I’ve Learned Some Hard Lessons.
Nobody ever sat me down in college and said, “Hey, start saving now.” I didn’t begin until my 30s — and that delay cost me 10 years of growth. My biggest regret? Not starting in my 20s.
So here’s what I wish someone had told me:
1. Open a Roth IRA — As Soon As Possible. A Roth IRA is a retirement account you fund with money you’ve already paid taxes on. When you retire, you withdraw that money — and all its growth — tax-free.
If you start early, your Roth IRA can grow into $1 million or more by retirement. (The annual contribution limit is around $7,000 — but do what you can.) Even saving a little is better than nothing. Try to live below your means. If you have a partner, try living on one income and investing the other perhaps.
2. Where Should You Invest That Roth IRA? A Roth IRA is just the account — you also have to decide where the money goes.
- Avoid individual stocks. Too risky.
- Choose diversified mutual funds or ETFs, especially those tied to the S&P 500.
- Look for low-fee index funds (e.g., Vanguard, Fidelity, Schwab). *see postscript.
- Mix it up: U.S. funds, international funds, large-cap and small-cap funds — this spreads the risk.
3. Be Careful of HOT Online Advice.
You’ll see flashy “hot stock” tips online. Many are scams — what’s called a “pump and dump.” People hype a stock they own so others buy in, then they sell and leave you holding the losses. Stick to long-term investing, not gambling.
4. When You’ve Maxed Out Your Roth, Open a 403(b)
A 403(b) is like a 401(k), but for public educators.
- Contributions lower your taxable income (you’ll owe less in taxes).
- Some school districts match contributions — free money!
- You won’t likely max it out (limit is over $20K), but contribute what you can.
5. If You Inherit Money, Treat It with Respect.
If a parent or relative passes and leaves you money, don’t blow it on a vacation, car, or luxury items.
Instead:
- Roll it into an inherited IRA.
- Use it to boost your Roth IRA or start a brokerage account for additional investing
6. Eventually, You Might Work with a Financial Advisor.
If investing overwhelms you:
- Look for advisors who charge around 1% or less of what they manage.
- Avoid anyone pushing high-commission products or charging large fees.
7. Should You Pay Off Your House Early?
As I approach retirement, I think about paying off my mortgage. But here’s the math:
- My mortgage rate is 2.5%.
- Long-term investment returns can be 7–12%.
8. Cars Are Not Investments
Cars lose value the second you drive them off the lot. Buy used if you can, and drive it until the wheels fall off. I created a small investment account with $20,000 years ago, and it doubled. I’ll use that money to buy a car with cash when I retire — no car payment, no interest.
In Summary: Take Care of Future You
- Start early — even if it’s $50 a month.
- Use a Roth IRA first, then a 403(b).
- Invest in low-cost mutual funds, not individual stocks.
- Be cautious with inheritance and online “advice.”
- Don’t waste money on depreciating assets.
- And above all: Put yourself first financially.
*Postscript: Vanguard 500 Index Fund (VFIAX) has an expense ratio of 0.04% and aims to closely match the performance of the S&P 500. Fidelity 500 Index Fund (FXAIX) With an expense ratio of 0.015%. Schwab S&P 500 Index Fund (SWPPX) a low expense ratio 0.02%. Fidelity ZERO Large Cap Index (FNILX) This fund has a 0.00% expense ratio. The expense ratios may have changed since the publication of this article.
Other Opportunities:
Investing may not be enough to allow you to live comfortably in retirement. If you are single, or perhaps started late, you may want to consider other "streams" of income.
Summer camp brought 15-20K (I ran it in my home's 4-car garage)
Publishing books and resources took me 10 years to get to a point where that brings in about 10 - 15K per year.
Online sales bring in about 5-6K annually.
I use to sell my art, but that's minimal now.
I also itemize business deductions and operate an LLC.
Investing may not be enough to allow you to live comfortably in retirement. If you are single, or perhaps started late, you may want to consider other "streams" of income.
Summer camp brought 15-20K (I ran it in my home's 4-car garage)
Publishing books and resources took me 10 years to get to a point where that brings in about 10 - 15K per year.
Online sales bring in about 5-6K annually.
I use to sell my art, but that's minimal now.
I also itemize business deductions and operate an LLC.
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