Joe4majors retirement question had me thinking. I see he was also in a 403b plan… my daughter just started teaching kindergarten in Tuscaloosa is the 403b good for her to also invest in or maybe a Roth IRA. She hasn’t even gotten her first check but I would like her to start early. Thanks

Either one is good if she’s in kindergarten.

Geez, I screwed that post up. I edited the post. She is teaching kindergarten. 🙄

If its a public school she will start getting mandatory state retirement which is not enough to retire on. She can opt out of it if she wants but that is usually not a good idea. A Roth, under a self directed plan, may be more flexible at her age, because it will go wherever she goes without being tied to the employer. Also with a self directed Roth she can contribute to it as she see's fit. Sometimes when you are young you need extra money one month then maybe not the other. I always top mine off in January but there were some years where I had to split it between January and February.

I believe the 403b allows you to defer taxes until you retire. The train of thought is you should be in a lower tax bracket when a person retires. It’s my understanding, you pay the Roth IRA taxes up front and that’s it. Both are good and as young as she is, there is a high probability she will be in great shape when her retirement day comes forth.

Best advice I can offer: Forget all the stock options and buy land. It worked for me.

Fund both fully when she is able.

The RSA1 option is another one. It’s a deferred compensation plan that you start drawing from when you retire. It is pretax money that grows tax deferred. You can begin pulling money out when you are no longer working for a state agency, not normal retirement age. It could help fill the gap if somebody retires early and needs funds prior to being able to pull it off other retirement accounts. This disadvantage to this is the you are limited to 3 options to invest in. The stock option is the most aggressive and it is an s&p 500 fund.

The 403b is like a 401k. More investment options but you would be penalized if you pulled out prior to retirement age.

Either is probably ok. I went with the Roth personally.

Ehhh that seems really foolish.
I own and have done well with land/real estate but a well sorted portfolio is diversified.

Example: Bought a condo at the beach 4 years ago. Loved to visit and enjoy family time there. Sold this year for twice what we paid. Match that return with anything a retirement is offering. May not be feasible for everyone, but I want investments I can put my hands on.

I think real estate is great but had this post been in 2009 it would be the reverse circumstance. It’s been a good run.

Very true! Timing has everything to do with the outcome of a rain dance!

Yeah I still haven’t gotten over our portfolio losses that year

That would apply to the stock market as well.

A. Can a brand new Kindergarten teacher can afford to buy a beach condo?
F’ no!
B. Let’s further back that concept up, do you think a brand new kindergarten teacher can afford to buy ANY real estate in the Tuscaloosa area that’s not A in the ghetto or B in BFE?
Not too likely.

Getting a few thousand into a Fidelity Roth IRA is a much more obtainable/realistic goal given current real estate prices and interest rates.

Investing should be a crawl, walk, run approach.
You effectively recommended/gave an example that a toddler who is still learning to walk take up marathon running because you like running marathons

Start early if you’re investing in the stock market. It’s amazing what 40 plus years can do. I wished I’d listened long long ago.

I wish it was common knowledge to open a Roth IRA when kids get their first real jobs.
I didn’t know about Roth IRAs until I was 25.

Im not familar with state retirement but I would do both. When you retire you can draw the money that is taxed up to the taxable threshold which now is $12,500. After that you use your roth and you theoretically pay no federal Income tax.

I like the self directed Roth especially at an early age for several reasons.
It can be contributed to whenever you want however you want at times that work for you.
It is not tied to the employer. If you move or job status changes there is no waiting or extra crap you have to do with the former employer.
Its relatively easy to roll other investment plans into a Roth.
You have control over what it is invested in. You are not just hoping that whoever the people are that makes the investments are working in your favor.
Low penalties for early withdrawal if you really have to, and no taxes on it when you retire. But I bet if given the chance the democrats will change that in the future.