Monday, March 25, 2013

How We Saved $250,000 by Taking "Crappy" Jobs


In May of 2009, my wife and I were exhausted and in need of a change of scenery.  Our teaching jobs in LaGrange had become more and more hectic and less and less enjoyable.  One morning as I perused my Teach Georgia account, I came across jobs for both of us in Echols County. On a whim, I decided to apply for the jobs just to see if we might get an employment nibble.

Later that morning around ten o'clock, I saw that I already had an email and a phone message expressing an interest in interviewing us.  That night I spoke with the assistant principal and set up an interview for the following week.  In a span of twelve hours, our job prospects had dramatically changed for the better.

Naturally, I started researching the area and found out that Echols County was very different from the rest of Georgia.  First, the county had less than 4,200 people in its 421 square miles.  Most of the economy consisted of agriculture and timber...not exactly big city living.  I had always heard that south Georgia was a lot slower than the rest of the state, but at the time I did not fully understand how.  Finally, Echols County was the official county of banishment for many Georgia lawbreakers.  

A week later we went for our interviews, nailed them, and got new jobs.  After the interview we drove around Statenville, the county seat, and quickly realized that there wasn't much to the town.  It had two gas stations, a small grocery store and a small family-run restaurant with outdoor picnic tables.  It also had a public library, a health department, a post office, and a few other government buildings.  On the bright side, the school district had less than 800 students on its K-12 campus.  Academically, the school had a private school feel.  




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Statenville's Lone Stop Light

Back in LaGrange we told our friends and co-workers that we were accepting jobs in Echols County.  In spite of being life-long Georgia residents, most of them had no idea where Echols County was.  As I described the county to them, I could tell many of them thought we were crazy to head off to the sticks of south Georgia.  We heard lots of questions:  "What will you do for culture?"  "What will you do for fun?"  "Will your son be happy there?"  It was obvious:  in the eyes of my friends and co-workers, we were taking really CRAPPY jobs in the boondocks. 

In spite of the negative vibes, we were convinced that we could make our time in Echols County worthwhile financially.  Prior to officially accepting the jobs, I verified that the district offered the retirement plans necessary to complete our savings plan.  

Fortunately for us, the district offered three retirement plans:  a 457, a 403b and an annuity funded by the district (401a or 403a plan?).  Since the district did not offer the social security plan, they paid 6% of our salary into an annuity at Valic.  In addition to these three plans, my wife and I knew that we would fully fund our IRA accounts and pay into the Teacher Retirement System of Georgia.  In all, we would be contributing to five retirement plans...each!

  Before leaving our jobs in LaGrange, we added $33,000 to our 457 accounts to raise our combined 457 balance to $90,000.  Utilizing our savings in our 457 accounts was key to working our plan since these funds can be tapped without the usual IRS pre-59.5 10% penalty (when an employee separates service).  From 2010 to 2012, we took distributions averaging $30,600 a year from our 457 plans.  This stream of money enabled us to go full throttle on our retirement savings.   
     
In 2010 and 2011 we fully funded our 457, 403b and IRA accounts.  The district contributed monthly to their annuity plan...more on that later.   Here is what we saved in our first two years:


2010 & 2011 Retirement Savings
Account
Self
Spouse
Total
457
$16,500 
$16,500 
$33,000 
403b
$16,500
$16,500
$33,000
IRA
$5,000
$5,000
$10,000
Yearly Total 
$38,000
$38,000
$76,000
$76,000 * 2 years = $152,000


In 2012, 457 and 403b contribution limits increased by $500 per account, so we were able to save even more.  Here is the breakdown:    


2012 Retirement Savings
Account
Self
Spouse
Total
457
$17,000
$17,000
$34,000
403B
$17,000
$17,000
$34,000
IRA
$5,000
$5,000
$10,000
Total
$39,000
$39,000
$78,000



After three years of aggressive savings, we were able to put away $230,000 in our 457, 403b and IRA accounts.  During that time our district annuity plan had grown to over $20,000; what an added bonus to our overall savings!  This is what the final tally looks like:     


Total Retirement Savings
from 2010 to 2012
2010
$76,000
2011
$76,000
2012
$78,000
District Annuity
$20,000
Total
$250,000


Most of our friends and co-workers considered our move to Echols County a lateral move at best while others saw it as a journey to educational and social oblivion.  In reality, it was a great experience on many levels.  Financially, we did great, but we also grew professionally, had a ton of fun, and met about 4,000 great people.   I got to experience being a head coach and administrator, my wife was able to teach a new subject, and our son attended an excellent elementary school.  We took frequent beach trips to Florida and Jekyll Island, visited relatives in the area, grilled out with regularity, attended wild game suppers at church, ran the Gate River Run twice, went trail running and squatching around the Alapaha river, visited the Okefenokee Swamp, ate awesome AYCE BBQ and seafood here and here, worked out more, ran more, read more thanks to Mrs. Jackie, and greatly improved our mental and physical health via overall stress reduction.  

My Big Boy Bringing Me Home to the Finish Line!

Finally, the best part about our time in Echols County was its people.  We were constantly invited to church functions, Sunday lunches, hunting club breakfasts, and birthday-holiday-graduation parties.  Basically, we were treated like family.  We loved our time in Echols County; everyone should have such a "crappy" job.  

6 comments:

Anonymous said...

Love this article and love Echols County! It is true that the savings is great, but the experience was just as valuable.

Marcia said...

Followed you over here from MMM. I like your writing style and enjoyed reading this post!

I think about this occasionally. I grew up in a small town (sounds like this county) and teaching was actually very lucrative there.

Now I live in Coastal So Cal (one of the most expensive places in the country). If we picked up and sold the house and moved to my home town or my husband's home town, we could retire. (I'm not ready to do that.)

Well, I think we could retire. My boys are 7 years, and 9 months. So maybe not.

Ed Mills said...

Marcia, I'm glad you liked the article and thanks for the compliment. Your boys might like small town life; my son always talks about his time in south Georgia...it was his "year in Provence." Good luck as you and your family explore your options.

Anonymous said...

My husband and i have been talking about doing this very same thing so i was glad to find your article. but I'm very confused. We are teachers in year nine. We don't take home but about 37k each a year. How in the world did you save so much?

Al Yap said...

Not everyone can have a 457 account, let alone both a husband and wife. So yours is a special case.

Ed Mills said...

Al,
Compared to overall U.S. population, having two 401k-style retirement plans is unusual. However, I know lots of teaching couples who work in districts that offer both 457 and 403b plans. The majority of them do not fully fund both accounts. My wife and I are different in the way we utilize these plans to build wealth, expand our financial freedom, and increase our career/life opportunities. I'd love to see more teaching couples use 457 and 403b plans to improve their options.

Thanks for reading!