Kevin, age 30
Kevin teaches math at an alternative school for students who meet at-risk factors. He loves his school's small class sizes which allows him to know each student deeply, and his biggest challenge is that students come to school with a history of trauma and stress both in their lives and in their school experience. Most are well behind in math (3rd to 6th grade level usually). He says it can be a challenge to get them to care about math.
We asked Kevin some questions about what he knows or wants to know about the 403(b) and saving for retirement, and this is what he said.
On a scale of 1 to 10, with 10 being total understanding, how well do you understand saving for retirement? Why did you pick this number?
I picked 10 because I have been on the path to financial independence for over a year now, and I have done extensive research on my retirement accounts, pension options, savings goals, and investment options.
What is your biggest money worry?
My wife is on a pay-freeze at the worst possible time. She was going to get a $5,500 raise next year, but that is no longer happening. It doesn't stress us, but it is upsetting. Plus we are planning to have kids.
Do you have a 403(b)? If yes, are you satisfied with your investment? If you do not have a 403(b), why not?
No, because I had one back before I understood it. As most teachers, I just understood that it's my retirement option as a teacher. I actually sought out the salesperson (who I thought was an advisor) to open one. Neither the district, nor this salesperson, ever told me that I had both a 401(k) AND a 457(b) available to me. When I changed districts, I rolled my 403(b) over to an IRA, and both my wife and I are using our 457(b)s and 401(k)s, and now HSAs (just started).
Did you ever hear about the 403(b) in your teacher preparation program?
No, there was no discussion of any retirement preparation.
Do you know what a fiduciary financial advisor is? If yes, how would you describe a fiduciary to a colleague?
Yes. Someone who has a legal obligation to act in your best interest when it comes to selling investment products, which means they will try to keep your fees as low as possible while matching the asset allocation you'd like.
If you could ask a financial advisor one question what would it be?
I've done so much research on my own that I'm not sure what I would ask. I try to answer my own questions. It would probably be something that I didn't know that I didn't know. Any tricks of the trade that I may be overlooking.
Anything else you would like to share with us?
My story is one about early retirement. I discovered the FIRE (Financially Independent Retired Early) movement through podcasts, and have worked very hard at it since then. My wife is on board too (she's a teacher as well). We travel hack with credit cards, utilize our 457(b)/401(k)/HSA/IRAs to control our tax rate and save. We just closed on our first investment property a few months ago, and I am starting a side hustle as a financial coach because I enjoy finances and teaching. We are working very hard and working smart to reach our goals. Note: Kevin blogs about finance at pocketbookprofessor.com.