Best Retirement Plans for Teachers

The curriculum is so much necessary raw material, but warmth is the vital element for the growing plant and for the soul of the child.” (Carl Jung)

A person instilling norms of morality and confidence to face the world is called a teacher. However, this is not really the definition of a teacher as nobody can really define the role of a teacher in a child’s life. The teaching profession is one of the most adored and respected professions in the world.

Having said that, it has been seen that there are many teachers who do not have the resources or the acumen to plan for their retirement. Financial planning is very important for you, no matter what profession you are in. There are many retirement plans available in the market for teachers. Some of them are:

• Tax Sheltered Annuities (TSAs): These plans are available with different insurance companies. Teachers can easily avail these plans after they have analyzed its pros and cons. Generally, these plans are available in the form of variable or fixed annuities. After paying these plans for a fixed time period, you get a certain amount for a designated time frame from the insurance company. The returns might a bit low, but these are very safe in nature. Even if the insurance company is liquidated or goes bankrupt, the state will compensate with $100,000 of the money that have been invested.

• 403(b): These plans are not only available with the school district payroll department, but also with different financial institutions. Whatever money is contributed to these plans is deducted from the paycheck of the teacher every month before the deducting the taxes. Therefore, federal and state tax is not applicable on these plans. Most teachers give high importance to this plan, as even if the teacher changes his or her job, then the plan continues without any interruption. 403(b) plans function on their own; therefore, teachers do not need to keep checking on their deposits.

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• Deferred Compensation plans: There are no fees or commission charged on these plans. Therefore, these plans have a huge demand among different teachers. They can easily ask their school district to deduct money from their pay and deposit it in a bank or credit union. The money accumulated in this bank or credit union multiplies with time as the bank will be reinvesting this money in the market. Teachers can directly contact the most reliable bank or credit union to get this plan, which means that there is no need to go through a salesperson.

• Mutual Funds: Being linked directly to the financial market, these plans give you the benefit of reaping profits when the market gets better. Teachers can easily invest in these plans for a long term as the ups and downs of the market will affect the mutual funds. The government or the company that you are taking the plans from will never guarantee the kind of returns you get on mutual funds.

• Teacher’s pension plan: This plan is available with almost all government organizations and is known to have served more than 89,000 active and retired members. Known for its reliability and stability, this plan has been holding assets of more than $18 Billion in the market. This plan is also known for providing a steady and durable income to the retirees.

All the above mentioned plans provide teachers with the opportunity to save and reap benefits of their investments after they retire. Apart from this, these plans also provide a regular income for people who are responsible for shaping the future of our nation.