Teaching Couple Retirement Planning Quesitons

[GlobalGuy]

Hi Everyone!

My wife and I are in our early and mid twenties, and we've just accepted our dream job in our dream location. We want to get started with retirement planning EARLY so that we have little to worry about a few decades down the road. The great thing is that our new school offers to match up to a 10% contribution to Raymond James OR a retirement plan of our choosing. A couple of questions for the community:

1) From what I read, Raymond James is NOT the way to go. We are both US citizens, and we will be out of the US long enough each year to get the Foreign Income Exclusion tax credit. Would Vanguard be the right place to invest? If so, which fund is best? Target retirement funds? Something else? (I am by no means an expert on this, so jargon is Greek to me.)

2) Is there any way to avoid paying taxes on retirement savings, even though (from what I've read) we will not be able to contribute to an IRA?

3) I have about $20K in a public school employee retirement fund. Should I reinvest that?

I appreciate any help you can give!

[eion_padraig]

I'd highly recommend Andrew Hallam's book that just came out called "The Global Expatriate's Guide to Investing". He's a former international teacher himself. Basically he suggests unmanaged index funds. Read this to avoid the really awful plans that are out there.

Previously he wrote a book called poor Teacher, which I haven't read, but I think he presents similiar, if less refined ideas about the same thing.

The way I understand it, you'd have to make income in the US to contribute to IRAs.

[Mike]

The best thing we ever did was to buy our house,(for the summer) no mortgage, no loans. Just saved the cash and bought it.

We also now have another rental house. We do have a VUL policy which should be non-taxable, it is very expensive though.

They say you should self invest in the cheapest Vanguard funds, we didn't do that and use our own financial advisor. When the markets are up I love him in 2008 and 1999, not so much!

Good luck!

[PsyGuy]

Vanguard is a great option, you basically want no commission and no fee large and diverse indexed funds. Stay out of the US, I would look to an investment firm or agency either in Hong Kong if your in Asia or London if your in Europe. Just stay out of the US mess if your going to do this for the long term. What you want is a "Too Date retirement" plan.

If you invest outside the USA and you live outside the USA you dont pay US taxes on those investments, thats why so many one percenters leave the US. You need US income to invest in an IRA.

What is the return and benefits from your public school fund? Are you vested in a pension, or is it a 401K or another vehicle? Whats it doing for you?

[IAMBOG]

Read Andrew Hallam's book. I believe there is a short section on Raymond James. The general gist was to avoid, however, he also says one or two products are ok. Read the book.

http://www.amazon.ca/Global-Expatriates ... 398&sr=1-2

[wntriscoming]

Anyone read both of Andrew Hallam's books?

poor Teacher: The Nine Rules of Wealth You Should Have Learned in School
The Global Expatriate's Guide to Investing: From poor Teacher to poor Expat

Is one better than the other or am I good to go with either?

[IAMBOG]

Probably worth reading both, but if not, go with the second one (Global Expatriate).

[cdn]

I might be missing the joke, but the book is poor Teacher. It is quite good, and it helped me get my family started with investing.

I have the digital version of Global Expatriates Guide ready to be read....deep on the to read list though. His blog isn't quite as good anymore as it is rarely updated and only when he posts a link to an article he's written.

EDIT: It appears as though the system automatically substitutes poor for 1,000,000aire

[GlobalGuy]

That's so strange about the autocorrect. I wonder why they do that.

Thank you for your input! If we buy into a target retirement fund with Vanguard, can we share one as a married couple? Also, can our school directly deposit into Vanguard?

[PsyGuy]

@wntriscoming

Ive read both, Poor Teacher is more directed to the domestic teacher, and Global Expat really has a more international focus. Id recommended Global Expat if your an IT, or thinking of becoming one.

@GlobalGuy

You can both contribute to the Vanguard fund, and you can both be listed as owners on the account. Your school can, they just seldom if ever do so voluntarily, and their are ownership issues in some jurisdictions that would complicate the process. ISs generally only make government mandated contributions when they are required to do so.