The question posed to me was, "as a teacher, should I consider other forms of retirement savings in addition to State Teachers Retirement?" Now if your not a teacher this post is still for you because everyone should save for retirement both through their employer and on their own using a Roth IRA.
Ah, but I'm getting ahead of myself. Before you start thinking about saving for retirement, You must establish an Emergency Fund. Start with $1,000 in savings. Next, you need to pay off all you consumer debt. Attack it! Kill it. When it's zero, now it's time to start saving for retirement.
Here's what I do.
- I contribute 3% into NewPointe's retirement plan. Why 3%? Because the church matchs 100% up to that amount. I've just made a 100% return on my investment. That's way cool.
- Next, I fund my Roth IRA as much as possible. The limit for 2008 is $5,000 / $6,000 if you are 50 or older. If your married, then double these amounts. (Hands down, the outside of company matching funds, the Roth IRA is the greatest retirement vehicle ever.) Why? Because 100% of the growth, and that's where the wealth comes from is TAX FREE when you take it out at retirement age.
relientk008, I hope you and everyone found this post helpful.
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1 comment:
Thank you for the post! It was helpful. I don't have any debt (and won't when i graduate from college either) so i think i'm fine in that area. However STRF is 85% of your three highest years of income (not matter where they were) if you teach 30 years (administration included) but 90& if you teach for 35 years.
Is a Roth IRA even nessecary? And for all of us people who are stupid when it comes to money what is a Roth IRA?
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