Skip to main content

Educator Investments

We're in the process of getting our first house, and as we get closer and closer to crunch time, we have to secure the money for our down payment. As we are going through this process, I'm learning that home buying comes with its own particular language! It's crazy. It feels like we're taking a mortgage literacy course because we're hit with a new word every day!

Anyway, most people miss out on a home because they don't have the funds for the down payment. I'm looking at the few resources that I have to pull from, and since I'm an educator, I've been asked to look at my retirement funds as a source for the down payment.

I live in Georgia. Georgia educators use the Teacher's Retirement System (TRS), and you can learn more about it here. Here's the good part, "A defined benefit retirement plan (401A) relieves its members of the burden of making investment decisions and assuming the risk associated with those decisions. TRS assumes this risk for its members. Therefore, the retirement benefit offered by TRS is secure." (2017).

Sounds good right! I've been teaching for seven years and I've never questioned the wisdom of this plan until recently. I like that it's not affected by the stock market! That's awesome. It's consistent. It's dependable. But can I use this money for this house?! Can I make a withdrawal from it?  Here's the rub, "While you are employed in a TRS covered position, as stated in Georgia law, you cannot make withdrawals or borrow funds from your account. If you terminate your TRS covered employment you may apply for a refund of contributions and interest. However, you are not eligible for a refund after you accept other TRS covered employment." (2017).

Not cool right?! I can't use my hard earned money to help finance my first house?! It sux!  😒 . I have to quit teaching or cancel my TRS contributions, withdraw the funds and get hit with a 20% tax???!!! It's easy to build a nice little cushion with this program too! So I've learned that I can avoid the penalty and rollover this account into a Traditional IRA or a Roth IRA, and then use up to $10,000 towards my down payment,

Ok. Sounds like we're on the right track right? So now the question is, which one should I use? The Traditional IRA or the Roth IRA? Also, which company should I work with? Should I sit down with my banks (Bank of America, SunTrust, Delta Credit Union, Chase, etc...) or should I see the folks over at Charles Swab? Or should I cut out the middle-man and make the plunge at E-trade? Lol. Too many options.

Schools don't do a very good job of teaching people how to invest. Especially, for a person of color, we don't typically have these conversations with our families, with our friends, or even with our colleagues. It seems to be an acquired language spoken by people who are much more proficient at using it than we are. It feels like I've arrived at the party too late, but better late than never right?

I read a great article from Bankrate about whether or not I should use retirement funds. I read another great article here about the differences between a Traditional and Roth IRA.

Doing some more digging, this is a good article from NerdWallet highlighting the pros and cons of each investment company. So, I think I'm going to go with TD Ameritrade. I really like the educational resources they have available so you can't go wrong with a company that wants to educate its' customers. I'll give em a call and we'll see how things go from here!




Comments

Popular posts from this blog

Georgia Educators Technology Conference 2016

I went to #GaETC for the 1st time this week. It was a great experience! Learn more about it here: http://www.gaetc.org/

I learned a bunch of new things. @coolcatteacher told everyone to focus on 3 things. All the technology, apps, and hardware can be overwhelming. She reminded us to just hone in on a few key takeaways and let the chips fall where they may!

This year, I will focus on Google Cardboard, Google Sites, and Google Drive Add-ons & Extensions.

Google Cardboard: Great session from@TeamBorders and @SuzanneLaisney. Google Cardboard = VR learning for students. The expensive sets don't do anything different compared to the inexpensive sets. I fund raised through our parents and purchased a class set of kits from https://www.unofficialcardboard.com/ and they seem to be working just fine. Some great apps to use with Cardboard are the New York Times Virtual Reality App, Bubbli, Nearpod VR, YouTube 360 and Google Expeditions. I'm going to tinker with Google Expeditions and …

1st Father's Day

This was my first Father's Day as an actual father! Prestin is a little over 3 months old now, so we're starting to be more adventurous and taking him out to different restaurants and so far he's been awesome! I'm thankful that I have a great son, a great wife and a great family (on both sides) to support us!

When I pause to reflect on things, I can't imagine a father not wanting to be involved with his son or daughter. It doesn't make sense to me, and yet SO many people do it. Absent fathers and absent mothers just don't make any sense. My son has grown so much these past 3 months and I can't imagine not being a part of it. The math part in me wants to survey absentee parents and try to get to an understanding of why they behave the way that they do.

Then the other part in me kicks in and realizes that MY understanding of THEIR behavior won't change them! I can do case study after case study but I don't really see the benefit of understanding t…