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URL:  http://boards.fool.com/well-to-be-clear-she-doesnt-have-any-plans-to-22894133.aspx

Subject:  Re: Is the pension worth it? Date:  8/16/2005  12:16 AM
Author:  mcreilly Number:  47244 of 76397

Well to be clear, she doesn't have any plans to leave her job at the present. In fact school started today and she is there.

Also, while real estate is the obvious choice, the question I'm wanting to pose is more along the lines of "what if she were to get a different job? How much would it need to pay?" What sort of retirement options would it need to offer?

You are right that she is off summers, so that is an option perhaps separate from the teaching job.

So that's question one...

Question 2 is retirement advice in general. I don't know her salary, but I would guess mid 20's. She has a fully paid house worth at least $200,000 but I would guess more than that. She is 8 years to retirement (but is paying $24k to retire 3 years early), has a son in college, and no retirement savings. She will qualify for a pension from the school. She would normally qualify for something else (city employee pension?), I'm not sure the details, but a law was passed saying that if you teach you must take that one and not the other. She is upset about this and has written letters to that effect.

What would her best course of action be for retirement? Assuming she was open to it, would selling her house in favor of one approx half the value, thus giving her approx $100k to invest give her a significant advantage? Or is it largely too late, and she should just wait and use the money when necessary?

Keeping the house is also an option, but here in Texas, no state income tax is replaced by really high property taxes. My $190k house is over $4,000 in property/school taxes. I don't know how the city she lives in compares, it's more expensive for housing, presumably taxes would be high as well.

Sorry I don't have all the necessary details for these questions, she doesn't know what to do but is now consumed by school and other personal life details. My main hope was to get her out of this job, but regardless of what job she is in, she needs to take drastic measures to retire. I doubt she will want to just sit home and will likely take a different job after retirement, but it's all a guessing game at this point.

Michael
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