Leyder "Aiden" Murillo, MBA
5 Financial Planning Strategies for Teachers/Educators
Updated: Feb 19
As your friendly neighborhood wealth management advisor at Wolfpack Wealth Management, I enjoy working with teachers and educators and understand their unique financial planning needs. During my university days, I used to work as a Technology Paraprofessional for the Los Angeles Unified School District (LAUSD).
As a financial advisor and opening an independent wealth management firm, along with my experience working at LAUSD, has allowed me to understand and know the small everyday things teachers face. Teachers have demanding schedules, limited resources, and a focus on educating our future leaders. As a result, finding the time and expertise to plan for financial success can be challenging.
(Read more about me and why I created an independent firm)
But with a little bit of planning and the right strategies, educators in California and Colorado can secure their financial future and achieve their financial goals. Here are five financial planning strategies that every teacher and educator should consider:
1. Make the most of your pension plan.
In California, educators have access to the California State Teachers' Retirement System (CalSTRS), which offers a variety of retirement benefits. In Colorado, educators have access to the Public Employees' Retirement Association (PERA). CalSTRS and PERA are defined benefit plans, meaning that the benefits are determined by a formula based on a member's years of service and salary rather than the amount of money contributed to the plan. Defined benefit plans, like CalSTRS & PERA, do not have a Roth feature, typically found in some defined contribution plans like 401(k) and individual retirement accounts (IRAs), where contributions are made after-tax and are tax-free distribution during retirement. Therefore, it's essential to understand each plan's benefits and limitations and contribute as much as possible to maximize your retirement savings. A word of caution, though, a pension may not be enough for retirement nowadays.
2. Take advantage of tax-advantaged savings options.
Educators in both California and Colorado have access to tax-advantaged savings options such as 403(b), 457, and IRAs. These options allow you to save for retirement on a pre-tax basis, which can help you to save more money in less time. Additionally, if you are eligible, you can make additional contributions to your retirement account through a Roth IRA, which allows you to withdraw your contributions tax-free in retirement.
3. Create a budget and stick to it.
Budgeting is essential in achieving financial success and is vital for educators with limited resources. By creating a budget, you can see exactly where your money is going and identify areas where you can cut back. Once you have a budget in place, it's essential to stick to it to ensure that you're on track to meet your financial goals. You wouldn't modify your teaching plan and go against the benchmarks.
4. Take advantage of financial education resources.
California and Colorado offer a variety of financial education resources to help educators plan for their financial future. From online tutorials to local workshops, there are many opportunities to learn about budgeting, investing, and retirement planning. Beware of using social media, as it may sound like a good financial education resource. Instead, it may be a pitfall of even more complexities and non-clarity.
5. Seek professional advice.
Finally, seeking professional advice is vital when planning for your financial future. A financial advisor can help you create a customized financial plan that considers your unique needs and goals. At Wolfpack Wealth Management, we specialize in providing accessible wealth management services to educators like you. We understand your challenges and are here to help you navigate the complex world of financial planning.
By following these financial planning strategies, teachers and educators in California and Colorado can secure their financial future and achieve their financial goals. Contact Wolfpack Wealth Management today if you're ready to take control of your finances and reach your goals. We'll work with you to create a customized financial plan that meets your unique needs and helps you achieve your financial goals.
P.S.: We serve teachers in Los Angeles, California & Denver, Colorado, surrounding areas, and nationwide too, so if you're a teacher in these areas and looking for retirement planning guidance, we're here to help!
Ready to take control of your financial future? Schedule your free financial assessment and discover how working with a wealth management advisor is accessible and helpful in reaching your financial goals. Start building the future and wealth you deserve.
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