What do you do if you're an educational leader choosing a retirement plan?

2 Assess your risk tolerance

Another factor you need to consider when choosing a retirement plan is your risk tolerance. Risk tolerance is the degree of uncertainty you are willing to accept in your investments and returns. Generally, the higher the risk, the higher the potential reward, but also the higher the chance of loss. Some retirement plans, such as defined benefit plans, offer more stability and predictability, but they may not keep up with inflation or offer much flexibility. Other retirement plans, such as defined contribution plans, offer more control and choice, but they also expose you to more market fluctuations and fees. You need to decide how much risk you are comfortable with and how much you can afford to lose in your retirement savings.

3 Estimate your retirement income

Another factor you need to consider when choosing a retirement plan is your retirement income. Retirement income is the amount of money you will receive from various sources after you retire, such as your retirement plan, Social Security, personal savings, investments, or other income streams. You need to estimate how much retirement income you will need to cover your expenses and maintain your desired lifestyle in retirement. You can use online calculators or tools to help you project your retirement income based on your current income, savings rate, retirement age, life expectancy, inflation rate, and expected returns. You should also review your retirement income periodically and adjust your plan accordingly if there are any changes in your situation or goals.

5 Seek professional advice

The last factor you need to consider when choosing a retirement plan is professional advice. Professional advice is the guidance and assistance you can get from qualified experts, such as financial planners, accountants, or lawyers, who can help you with your retirement planning. Professional advice can be beneficial for several reasons. For example, professional advisors can help you understand the complex rules and regulations of different retirement plans, help you optimize your tax situation, help you diversify your portfolio, help you avoid common mistakes, and help you monitor and adjust your plan as needed. You should seek professional advice from reputable and trustworthy sources, and make sure you understand their fees and services before you hire them.

Choosing a retirement plan is an important and challenging decision for educational leaders. You need to consider various factors, such as your eligibility, your risk tolerance, your retirement income, your retirement goals, and professional advice, when making your choice. By doing so, you can increase your chances of having a successful and satisfying retirement.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?