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Retirement and savings for international teachers?

Posted: Mon Sep 30, 2019 4:39 pm
by samurai_pug
I am currently teaching in a public school here in America. My state offers a retirement system for teachers, and in addition my district offers 403(b)s. There is also the option of course to use ROTH IRAs. The real challenge is that the cost of living in America is really, really high, making it really hard to put savings away, especially on teacher salaries. I used to work in South Korea with EPIK and while my paycheck was modest, I found it much easier to save money each month.

I was wondering what retirement systems or plans international educators use, especially for long-term? I guess if you were at a school that didn’t offer any formal retirement, you could use a Roth IRA. Just trying to figure all of this out and increase my financial literacy every day. Thank you!

Re: Retirement and savings for international teachers?

Posted: Mon Sep 30, 2019 7:18 pm
by Heliotrope
Use the crappy search function and search for 'Hallam'.

Re: Retirement and savings for international teachers?

Posted: Mon Sep 30, 2019 11:42 pm
by Psychometrika
I use a taxable fund at Schwab and put my savings in ETF index funds. The reality is most schools don't offer formal retirement plans (although there are exceptions) and if you claim the Foreign Earned Income Exclusion (and have no other taxable income) you don't qualify to invest in IRAs in most situations.


Posted: Tue Oct 01, 2019 1:16 am
by PsyGuy
You cant in the vast majority of cases use a ROTH IRA, you cant fund them with non US earned income, meaning income you didnt pay US taxes on. You can of course get around that by choosing to pay taxes on it, mostly in the form of Social Security taxes being self employed. You can also start a US company and essentially pay yourself (though from a tax position there is little benefit to paying yourself as an employee of your on company and being an owner).

Most ISs dont provide a pension or retirement scheme. If there is one at the lower tiers its typically in the form of a bonus, which you can choose to invest on your own. In upper tier ISs there may be some form of organized pension and retirement scheme. For most ITs the goal is settling in an IS in a region (typically WE and the EUR) where there is a social pension program. You need to be settled in such a position around your 50, so that you an earn sufficient credits to retire and collect.
There are regions in Asia that have provident funds or programs that have mandatory contributions.

The other popular option is self funded retirement options. You can invest and organize and investment portfolio and there are also non US pension and retirement (UK, EUR) accounts you can plan on your own.

Re: Retirement and savings for international teachers?

Posted: Tue Oct 01, 2019 5:53 am
by samurai_pug
Thank you all for the replies. I'll check out that Hallam book and definitely research more about IRAs and mutual funds/ETFs for Charles Schwab (I've heard great things about them from other coworkers.) Honestly the most financially frustrating things about working in America are having to deal with a car (insurance, maintenance, gas upkeep) and dealing with your own housing (rent or mortgage are both rough on an educator's salary). Don't get me started on health insurance - Korea spoiled me. My state in particular is facing an issue with large class sizes due to a shortage of teachers - though I think this is becoming a problem on a national level. I'm saving a little bit each month, but if something were to happen to my car, that's it. Or God forbid a Medical emergency. It's tough here, but living here is forcing me to be extremely frugal, so there's that. I plan on staying here a few more years before making a major decision about going abroad again. In the meantime, I'll keep researching and educating myself about this stuff.


Posted: Tue Oct 01, 2019 8:49 pm
by PsyGuy

Thats not America, thats the majority of America, there are several regions of the US you could reply on public transportation just fine.

Yes, ISs will give you housing, but youre rarely in the position of being able to buy the property and use it as an asset in the future or once its paid off saving you the cost of living expense of monthly housing payments.

Health insurance and the cost f health and medical care, yeah thats not avoidable.

Re: Retirement and savings for international teachers?

Posted: Tue Oct 01, 2019 9:07 pm
by buffalofan
Assuming you are a US citizen, you can't use a Roth or any tax advantaged account while working internationally due to tax issues.

Best thing to do is open up a taxable account with Vanguard BEFORE you leave the US (very important - you will be shit out of luck if you try to do this abroad). Then use ETFs. Google up ETF 3 fund portfolio. Vanguard's fees are so low that it is basically free.

Agree with the other posters, Hallam's book is well worth a read.


Posted: Tue Oct 01, 2019 9:27 pm
by PsyGuy
Hallams book is okay.

I agree with @buffalofan that you want to open your investment accounts before leaving the US if your going to open US brokerage accounts. You dont have to though, there are many global brokerage firms and global investment companies that can give you access to Vanguard portfolios, etc.


Thats not entirely true. You can use internationally earned income, you just have to pay taxes on it, typically either through paying yourself though your own company or paying taxes on them through self employment.