A few weeks ago I had the honor of presenting to a class at a local university. The class was for students who had just finished their student teaching, so this was their last class before heading out into the "real world". I had met the professor while I was mentoring a student teacher, and she asked me if I would come for an hour and give a presentation on Minnesota TRA and teacher pension/retirement in general. There were a few key points I shared that I wanted to point out to anyone entering the profession. These points are things that most teaching class do not cover since they don't impact the classroom, but they will impact your life and your future.
1. SET UP YOUR RETIREMENT ACCOUNTS
As a new teacher, you must get into your business office right away and get your 403(b) or 457(b) accounts set up. This is so important. Many districts offer a 403(b) and not getting this set up will cost you money because the longer you are in the market, the more time your investments have to grow. Time is your friend when investing. Most districts will give you the information, but it will be up to you to learn about these accounts on your own. Talk to other teachers in your district as often there are one or two teachers in districts that are the "go-to" people for these things. Do NOT trust the financial "advisors" that come into your building to present their products. That is exactly what they are, PRODUCTS! Many are designed to slowly drain large chunks of your money and take it from your accounts, and put it into their accounts. Think of Matthew McConaughey's character as he was talking to Leonardo DiCaprio in The Wolf of Wall Street, "The name of the game, moving the money from the client's pocket to your pocket." This is how most of these products are designed. Make sure to research the vendors your school provides and ask a LOT of questions, especially what their fees are!
Typical 403(b) reps
2. SET UP YOUR HEALTH CARE ACCOUNTS
Learn about your school's health care accounts and what your options are. Like retirement accounts, most schools will not offer any advice on what health care plan you should select or the benefits of each one. With this, check into whether or not your school does an HCSP or HSA plan because YOU will have to go in to elect what those investments should be. Unfortunately we had career teachers in our district that did not do this early in their careers and they lost out on thousands of dollars in gains over the years.
3. BE PICKY!
Teachers coming into the profession today have a much more wide open job market. When I applied to my current job 25 years ago, I was one of 300 applicants for the position. Today, most schools are lucky to get a handful of applicants, if any! This means that new teachers can be more picky in the jobs that they look for. I strongly recommend looking for jobs in communities that are growing. A growing community usually means a growing school district. This means more money coming into the district and it also means you are less likely to be "cut", or laid off, due to declining enrollment, cutting of programs, or lack of funding. This is a huge concern in many rural schools in the state.
4. BE WILLING TO TALK ABOUT MONEY
Even in today's age of information where you can find out anything about anyone, it is still taboo to talk about money. It's one of those unwritten rules that everyone seems to follow. You know who does talk about money? Wealthy people! I think it stems from the fact that many people are embarrassed that they make poor money decisions or they don't make as much money or have as much saved as someone else. Don't be embarrassed about the money you do or don't have and don't be jealous of others that may have more than you. Be willing to talk about money and ways of saving and even earning more money. I finally learned at almost age 50 that everyone needs to start an LLC because you can write off a crazy amount of expenses and save on your taxes, all perfectly legally!
These are just some of the tasks that you will need to complete as you enter the profession. Take care of them right away because as soon as the students show up on day one, you are going to be swamped with the day-to-day job of teaching. Before you know it, your first year will be over and you'll realize that you forgot to get these accounts set up. Don't let that happen to you. Be proactive and prepare for your future.
I want to leave you with the final thought I gave to those college students. Nobody will care about your money or retirement as much as you do. Don't let ANYONE tell you otherwise, and as always, KEEP STACKIN!!!