5 Best Investments For Teachers

5 Best Investments For Teachers–like any good investment plan–should always contain a good measure of diversification. That means not to put all your money into one type of investment and, instead, spread it around in different investment vehicles. In our guide, we will show you what to invest in if you are a teacher.

  1. Hedge Funds. Long viewed negatively by some, hedge funds basically just bet that the market is going down over time, which given market performance over the last few years, is not such a bad investment to make! In a tough environment where the market is hard to predict, hedging is essentially protecting yourself.
  2. Private Equity. Private Equity is money that is invested in companies that are not publicly traded in the stock market; alternatively, these can also be investments in publicly traded companies with the purpose of making them private ones. You typically get better returns on some private equity investments than in public sector ones.
  3. Real Estate. The housing market has struggled as of late, but that can actually mean that prices have bottomed and that real estate can look attractive again. Some factors that help real estate investments are if GDP comes in lower than expected; if inflation or even stagflation becomes a problem; and if equity markets are struggling.
  4. 403(b). A 403(b) is a retirement plan for teachers that allow teachers salary deferral on a tax-favored basis. Further benefits include the absence of a tax on gains, interest and dividend income. These attributes explain why this plan has been around for so long as an option for teachers.
  5. Roth 403(b). A Roth 403(b) is an investment where the contribution to the aforementioned 403(b) is only after tax. It then grows tax deferred and emerges tax free when all is said and done. Decide which type of 403(b) is right for you by looking at your current income tax bracket and comparing it to what you think that will be in retirement.


Wall Street Journal

Guide to Teacher Retirement Plans

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