behaviorK - funny you mention a teacher getting into an annuity as part of her retirement planning. Just last week on Suze Orman, a teacher in CA called about this very thing. She was told the 403b was her only option and the caller didn't feel right about it. Suze told her not to contribute to it. At what age does this annuity mature? In the caller's case, it was at 85 YO, which is ridiculous. You may want to get your GF to suck up the 10% or just leave it and stop contributing to that 403b altogether. In the caller's case, she had not started contributing and Suze advised her not to. If she sucks the 10%, you should help her try to find a bit more aggressive fund in which to replace it and try to earn back some of the funds she lost in the surrender. Depending on her age, she can still invest in ROTH, traditional IRA's and have a nice nestegg. That is what Suze recco'd to the caller - to divert the money she would have allocated to this annuity to much more reasonable retirement savings. Whatever you do, she needs to stop the contributions to the annuity pronto and find another avenue - be it Vanguard or whatever else. I think the episode ran last Saturday, which means it repeats tonight with the new episode. If you have TIVO, record all SUze Orman shows and see if the ep with the specific question aired again. Like you, I"m surprised that the employer has such a crappy retirement plan.

Hayjud, if it's going to cost us $700 a month for health insurance, then we could never retire. He can keep insurance through his company when he retires, but we don't know how much that is going to cost us. If he would only get out of this manager's job, he could stay with the same company and work 32 hrs. a week, and still be full time. I think though he wants to quit this company completely and I can't blame him. He has worked there for 35 years. He works for Kroger grocery chain as a produce manager. Our son doesn't understand why a "produce manager" job is so demanding, but I try to tell him it's the lack of help that they give him that makes it so difficult. He should have never taken this manager job because of his depression and I have always regreted that he did. I think he even regrets it now. Kroger does all this great advertising about how they help people with the food drive at Xmas, etc., yet they have reduced their employees' insurance and have practically taken away the dental coverage. We only have $1,000 a year in dental coverage and that's it. He is real bitter toward Kroger, yet he kills himself to do a good job for them. I just can't understand the logic behind this and it really gets to me sometimes. I just tell myself that he is from the "old school" of the people that still care about doing a good job. We had a wonderful vacation. I just can't believe the difference in his attitude and his behavior. We had to come back home so he could be back at work on Sunday. He won't miss a Sunday because it's all overtime. He left at 3:30 and got home at 4:30. He does this every Sunday and when he gets home, he sleeps all evening and it's just like he's not even here. I think he said 20 words to me all last night and some of the words were "are my clothes ready for in the morning?" This morning, Monday, he left at 4:30 but he never had to be at a meeting until 6:00 a.m. This meeting is at another store, so he went to his store so he could work an hour before he had to be at the meeting. This really burns me up inside that he does this, esp. when they won't give a dam about him when he retires (for that matter, they don't care now how much he kills himself to do the "perfect" job). If I say anything, he gets defensive. As for the land, if we do buy land it is only going to be one acre and no more. That's one reason why we are selling this house. We had 3.5 acres and we gave one acre to our youngest son. We still have 2.5 acres and all of it is grass and has to be cut. Personally, I am hoping we find a house already built so we don't have to worry about where we're going to live while a house is being built and storing our furniture. We've already done that once when we built this house. I really enjoyed being around my DH when he was so relaxed. He is like a different person. We worked really hard around the house for 3 days, then we took 2 days off. I look forward to more days like this, just being able to see him relax more. We don't like much more having it ready. We are having a garage sale this weekend. My future DIL and son are going to help me and what doesn't sell, goes to Salvation Army. Would it be terrible if I set a date when we will put this house on the market, so we can go ahead and get it sold?

I worked for non-profits for almost my entire career, in fund development (fundraising). First I will tell you that you may be working just as hard for less money. However, my benefits were as good or better than what some of my friends who worked in the corporate world received. I always had good health care (except at a large university which offered only an HMO). Most places had excellent retirement funds and matched my contributions. I am even receiving a pension now that I am retired. I had plenty of vacation time (or personal time) too. Sometimes these benefits make up for the lower salaries although people in higher positions at large non-profits do very well. On the other hand some of my retired friends who worked in the corporate world are also getting subsidized health care and much larger pensions than mine. Small non-profits have a more laid back atmosphere but large ones are just as corporate as for-profits. Will you be doing the actual work that the non-profit does or is it a "back room" position? If you are doing office work and not a provider of the actual mission of the org, you may find it less than rewarding. For instance, would you be a social worker actually getting out and working with people or would you be an accountant managing the org's money? Big difference. Things I missed about a big non-profit when I went to a small one was things like decent computers and an IT office. Enough supplies or printed material to do my work well. There were always budgetary concerns. I also found that employees of a small non-profit were less motivated and watched the clock a lot. Hope I am not coming across as being down on NPs. I loved working for some of them and you get to see and do many things that are never part of the corporate world. You cannot put a price on being happy in your work. Just keep in mind that it is still work and you will have goals to meet and metrics the same as any other place that you work. I still say go for it but go in with your eyes open.

I will need to supplement my 1/2 pay during these 1-3 years with $ from elsewhere. I understand the idea of "tapering off" your work hours. It'd be a gradual adjustment for you, and it'd allow your replacement plenty of time to question you about how you've done things. BUT if you're going to need to supplement your income, is it the best choice? If you keep working for that one more year (three seems like a long tapering-off time), then you'd not need to tap into any retirement account. I don't think anyone's going to be able to answer your question with a solid answer because we are missing several pieces of the puzzle: We don't know how much income needs replacing, how much you have in your retirement accounts, or how much your Social Security benefit will be ... much less how much you expect to need to maintain a comfortable lifestyle in retirement. Too many missing numbers in the equation.I mean, if you have $50,000 saved for retirement, you should not dip into that paltry amount ... on the other hand, if you're sitting on a million or more and are just looking for how to most efficiently make this happen, you should outright quit ... but none of us can give really good advice without all this missing information. Since you are planning on working until full retirement be aware that until you reach Full Retirement Age for SS your SS payment may be reduced. Since you're 65, I assume you were born in 1952 ... making your full retirement age 66. If you retire before 66 (and SS is a federal program; thus, the same everywhere), you will lose 6% of your SS benefit for each year you retire early. Given that you're so close, I'd say wait 'til you're 66 and collect full benefits. You can postpone your SS benefit until you're 70, and that makes your benefit grow by 4% per year. Should you do this? Depends upon your health, how long you expect to live, and how much other income you have available to you in retirement.