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Retiring Teachers in 2018? Here’s Big Idea #1

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Over the next five weeks we will share the “BIG FIVE” retirement planning ideas for teachers in Delaware, Chester, and Montgomery Counties. If you are thinking of retiring in 2018 you might want to listen up and learn how you can maximize your retirement benefits.

BIG IDEA #1

Since the financial markets have gone haywire this past week, let’s address the PSERS lump-sum first. Usually retirees need a 6.5% average return over time to make what they would have received in additional pension benefit payments had they left the money in the retirement system. That’s a very reasonable break-even percentage for a moderately allocated investor over time. In addition, the money becomes available for your heirs when you die. For these reasons the vast majority of retirees pull out their lump sum. However, the mistake that we see teachers make is to invest the lump sum into high expense products like annuities and managed accounts through endorsed providers of 403b’s. You need to understand that the handcuffs come off at retirement and that you can look beyond the school districts endorsed provider list and choose any company you wish which could save you tens of thousands of dollars in fees during your retirement. Money that you could otherwise enjoy!

Don’t make the mistake of going too conservative with your investment selections or assuming that the recent volatility will continue. Market corrections come and go. Diversify and don’t react emotionally and sell when the markets go crazy. Instead, use the downturns as opportunities to invest! Fiduciary advisors can help you develop a sound investment strategy and help you avoid bad decisions when the going gets tough.

Click here if you would like to arrange a Complimentary, no obligation DISCOVERY meeting with Chip Addis of Addis & Hill to see if we can help you make smart retirement decisions.

Next week: Why you want to try to choose the maximum option from PSERS!

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