I am currently 27 years and my fiance is 32 years. We both used to work at a state job with 401 (a) funds, however, we have different balances. My balance is around $440 and her balance is around $10,000 (with other 401k in previous jobs combined).
We also have around $14,000 saved, but are just sitting there in a low savings account without a job. We would ultimately like to use this money for a future home purchase once we have 20% down or around $67,000 in the next 2 to 3 years.
Is there any way to maximize this money without investing it in a "long term account" such as 401k or IRA?
We both make around $54,000 a year and are not married yet in Texas. Our income rises approximately $500-$800 a year or so.
We are currently funding our Texas Retirement System as we are both educators. I have around $9,600 in my TRS and she has a lot less around $3,000.
We are trying to find out what is the smartest choice for our money since we need to rollover those accounts into an Roth or Traditional IRA? Is there any way to make the $14,000 current savings work for us without funding a long term account? What would be a good platform for investing or rolling over our money?
I really don't know much about investing but I am willing to learn as much as possible. If you know of any books or blogs I can read, I would really appreciate it. Or any advice on our current situation.
If you want to use the money in 2 years, you should not invest it, because you are just as likely to come out with losses on that money in that time than you are to have more. And yes, there are ways to invest without putting the money in retirement accounts, but as I mentioned this is not recommended for your scenario. Investing is for the long term, whether or not the money is in a retirement account.
At this point, if your target is $67,000 in 2-3 years, your savings rate is going to be the most important factor in meeting your goal. You'll need to save between $1475 (3 years) and $2200 (2 years) a month to meet your goal after including the $14000.
If you have questions about the various retirement accounts, I'd separate that out, as your post was a bit all over the place. You don't have much saved for retirement your age. Will you be receiving a pension separate from the amounts mentioned above?
I know there are different rules about how TRS interacts with SS. Make sure you understand whether y'all will be Rule of 80 or 90. Keep in mind that TRS is like Social Security in that there may well be no money left by the time you reach that magic number... I really think of the massive TRS number that leaves my paycheck like a tax.
Anyways, check with your district's HR department to see if they can explain. Perhaps they can at least put you in contact with someone who can. Anyone I ever asked basically said I was screwed and suggested a 403b, but I don't know how that compares to an IRA.
I obviously don't understand all this, so I really hope it's not as bleak as it seems to me, for your sake.