celticmoon Thank you so much for the plan outline. I have been thinking along these lines but never really put it on paper and crunched the numbers. I think your plan is as good as you can possibly make it with out a crystal ball. You are right about the unknown. How much will they reduce SS based on income? And how much we will have to pay for Medicare again based on income. We will have to use Medicare and buy a supplement. After all the research I did for my parents I have a pretty good idea how much it would cost today buy who knows what will happen in between now and the 3 or 4 when DH retires or in the future. I agree LTC insurance is to iffy at this point and would rather save that money than take a chance on it. If we live to be 100 one of the issues may be every day living expenses. We all have watched the price of food and most utilities double in the last 10 years. It still blows my mind to pay $4.00 for a loaf of bread or $5 something a pound for a tomato. We could also see our property tax skyrocket here in California. Some politicians would love to get rid of our Prop 13 that keeps property taxes from going up and up. After Joyful referred to my DH as being stupid for not paying attention to household finance in another post, he didn't know the whole story, I got to thinking about it so last month I told DH the bills were ready to be paid, money needing transferred, ect and ask him to do it. I had in the past told him I did most of it on the computer and showed him how to find passwords but really didn't think he paid attention. Guess what it took him all of about 20 minutes to do everything. He then said if I wanted him to do this every month I had better give him a key to our post office box. LOL Never even thought about it but in the 20+ years we have lived in the mountains he has never ever stepped foot in the post office. He now knows where the extra key is. So thanks Joyful for making me think. So all of you out there keep the questions and ideas coming. I can use all the help I can get in trying to think this through. At this point about the only thing I can think of that hasn't been brought up, not really a retirement issue but related, is pre paid funeral arrangements. Not terribly expensive but a great gift to the ones left who have to settle your affairs.

If you sold a stock(s) earlier in the year at substantial profit and you have a stock or stocks that is/are worth less now than when you bought it/them, and you don't consider it wise to continue to hold it/them, perhaps sell it/them before the year end to offset some of the capital gain that you made on the one that was sold earlier. In some jurisdictions you can carry a loss back a couple of years, or forward, to offset capital gains made in earlier years - or later. I'm not big on buying and selling stocks: I've bought some (quality ones) twenty and thirty years ago that I still hold. If a stock that you own has a history of volatile pricing, and you think that the price is unusually high right now, you might choose to sell now, with a view to buying back later, at a lower price (and there'll be two commissions to pay, in any case). Trouble with that is - how far is down? Maybe later the train will have left the station before you choose to get on. Not many of us have wings to enable us to catch it at a station down the line. Hope this helps. Come back to ask us more specific questions, if you like, as it's hard to know what fields of the broad financial system that you are interested to explore at the moment. Stockbrokers like to have you trade ... ... for if you just buy and hold for a long time, they don't make any money in the interim. Except that one broker that I use charges me $125./year for carrying an inactive account and my broker says that there's nothing he can do about it - I'm going to close it, as others don't. Some years ago one broker wasn't charging me an annual fee to administer my self-directed tax-deferred retirement account, but when I had to reverse it into the payout (and no more inputs) section, they were starting to charge an administration fee. So I asked around and found a couple of other carriers who were willing to administer it without an annual fee - carriers whom I was less enthused about using, but I didn't feel it necessary to disclose that piece of information to the current carrier. The carrier said that they could administer it without a fee, as well - and have been doing so, for the last seven years. As a matter of fact, they'll be sending me my annual cheque in a couple of weeks. Guess I'll have to start thinking about what to do with the money, huh? Yeah, right - just before Christmas? Learn how to manage your money effectively, for you, rather than the other guys - it's an interesting hobby ... **that pays well**!! If you don't choose to boss your money - it'll boss you. ole joyful

I'm a teacher too, and I can give you some advice on some of these topics. I am 100% sure we're not in the same state because you make more money than I do (though I have 24 years experience). - First, you sound like you're doing very well for your age. You should pat yourself on the back for realizing the importance of saving and thinking about retirement well before most people your age. - I'll second the point about talking to your potential fiancée about finances ahead of time. Do not just assume it'll all work out. - Buying a house is a sound investment. I assume you'll sell your current paid-for house, so you'll have about 120K to put down on a new one -- excellent. Even if she brings little to the table for this project, the two of you should be able to knock out the borrowed 100K within five years (even if you have a baby soon). With no mortgage, you'll be amazed at how much easier it is to live comfortably and still save! - Do you have a savings account for a new car? Since yours is paid for, I suggest you begin paying a car payment into a savings account. Once you get yourself "a car ahead" (meaning that you're ready to buy a new car when you need it, so that you're not wasting money on interest), it's easy to STAY "a car ahead". - I have the impression she's a teacher too? If the two of you work at the same school, consider becoming a one-car family. We did it for several years (until I started teaching, and our schedules were completely incompatible), and it was a MONUMENTAL money saver for us. It was the single biggest thing that allowed us to get off to a good financial start in our 20s. - If you hate your job (I do at times, really, I do) but want to stay in the pension system, could you do something else within the school system? Could you be the tech guy? the athletic director? could you do something different as a state employee -- a possibility, if your pension systems are linked? - I don't think you need to think about life insurance at this moment. Not to be crass, but if you died today, would anyone be worse off financially? With no wife or children, probably not. Once you're married, you probably won't need it yet. If you were to die, your wife could use your pension pay-out and your other investments to pay off the modest house payment you anticipate taking out, and she'd still have her job to sustain her. You WILL need life insurance once you have a child. If you were to die and leave your wife with a toddler, she'd have years ahead of her in which she'd be a single parent, and although her salary would be enough to put food on the table and clothes on their backs, your life insurance would be there to educate the child in the future. The life insurance would also assure you that your wife would be able to take some time off work, and that she'd be able to put aside a good chunk for retirement. Remember, she too will need life insurance. If she left you with the toddler, you'd need the same help. - The two of you probably need disability insurance more than you need life insurance. Statistically, you are more likely to be disabled than to die young. And becoming disabled is the real nightmare scenario (from a financial standpoint). Consider: You're in an accident or you become sick. You cannot work, so your household income's slashed in half. Yet your medical bills are sky-high. Your wife is still working, but she's also doing ALL the housework and ALL the childcare AND is trying to help you with your physical therapy. She's burning through her sick days taking you to the doctor. THIS is the nightmare scenario: She's overworked, AND she can't take advantage of your life insurance. Avoid it by signing on for disability insurance. - Another thing you should do after you marry is to write wills. As a teacher, you probably have access to your an employee's credit union? They probably offer such services for a low price. - About your pension: Do you know the details for the pension in your state? In my state you're fully vested at 10 years (so, yeah, you'd be a fool to leave at 9.5 years), and you can collect a full pension at any age once you've put in 30 years. You can collect a reduced pension at 20 or 25 years, though the dollar amount is reduced, and you can't begin collecting until 65 (65?) if you don't put in the full 30 years. Once you find out the details for your own state, you can "run the numbers" and see when it makes sense for you to leave teaching. It might be sensible for you to aim for 20 years, then do something else -- but you have to get the facts, then do your homework. - How secure is your state's pension? This is public knowledge, so look into it. You do not want to put all your eggs into the "staying in teaching" basket, if your state's weak in the pension department. As the people in Detroit! - In my state the pension program (defined benefit program) is being exchanged for a defined contribution program. This has its pros and cons, but overall it means that the new, younger teachers aren't going to get a pension. Why does this matter to you? Because if you ever leave, then return to teaching, you'll come in under those new rules! - An above poster mentioned Social Security. In my state, teachers DO pay into SS, so I will collect an SS check one day. You seem rather financially savvy, so I assume you know whether you've been paying into this or not. - I disagree with the above poster who says you're essentially screwed if you choose to have children AND want to retire at a reasonable age. The key is that you have to choose to live FRUGALLY. My husband and I are 48 and 51, and we have two college students. When we married, we had between us $200, college degrees and jobs, one car, and a brand-new mortgage. We chose to be frugal from the very beginning: We maxed out our 401Ks, even though it meant we couldn't afford vacations. We built an emergency fund, then started a savings account, putting away 1/4 of our after-taxes paychecks, even thought it meant we rarely ate out or bought new clothes. When our savings account grew, we started investing, even though it meant we had to remain a one-car family. Today we live in a house that's paid for, have significant investments, and are easily able to pay for our two college students' expenses -- they will graduate debt-free. My same-aged friends who wail that they can't afford their kids' college tuition don't like to hear that we buy used clothing, drive an 8-year old car, etc. The key is knowing the difference between needs and wants -- and being self-disciplined enough to stick to a budget. - Finally, I think you're off to a good start. If you and your wife are both about 10 years into teaching, then 20 years from now the two of you can expect the following: 1. You'll be about 55 years old, and as a person who can "see 55 from where she's standing", it's not "old" -- at 48, my knees hurt sometimes, but I can still hike all day and can pretty much still do whatever I want. 2. You'll live in a house that's paid for. 3. You'll have two teacher pensions. 4. You'll have teacher health insurance in retirement. 5. You'll have two Social Security checks. 6. You'll have the investments you've already begun. 7. If you have a child soon after your marriage, that child will be finishing college (and beginning to support himself) about the time you retire. You'll be able to have all these benefits AND you can work part-time (or seasonally) so you can avoid dipping into your investments too early. Though you're not earning big bucks now (or ever), you'll be well prepared for retirement. If the two of you put in a total of 60 years of teaching to earn these benefits, you'll have WORKED for every penny, but you'll have a comfortable retirement.

I have told my husband upon his retirement, that he can have the ultimate chair...... Instead of a lever on his recliner, he would, with dirty socks and rumpled clothes on....pass gas, and the chair would automatically lean back and raise his feet. ...he is now thinking about early retirement. Trin