Tuesday, August 18, 1998

Investment Options (sigh) At Last
By [email protected] ([email protected])

I recently got my annual Indiana State Teachers' Retirement Fund statement. After teaching for 31 years, the statement showed a total in the low $70,000's. To say that such a total is pretty paltry is to raise understatement to an art form.

In ultra-progressive, Wise Indiana, teachers have had but two options: a guaranteed investment contract and a bond fund. We are, uh, "allowed" to contribute 3% of our gross salaries to our retirement. To be more exact, it is deducted from our check and sent to Indianapolis where the state has not allowed it to come within a country mile of a stock investment. Ever.

Until 1996, that is, when the voters, via referendum, gave the retirement fund the right to invest our retirement money in equities. We now have five investment options: a guaranteed investment contract, a bond fund, an S&P 500 index fund, a small-cap fund, and an international fund. Hallelujah! But wait, I thought, as I looked at the annual statement; I'm outta' here in five years max. Heck, this is great, but not for ME, a grizzled veteran in his twilight years.

I have to admit that acute depression almost set in when I contemplated what I would have Foolishly accumulated throughout 31 years had I had five investment options from which to choose. What if the State of Indiana had pulled its collective head out of the sand twenty years ago and allowed its retirement fund to invest in equities? What if a Fool of a colleague had collared me at that point and given me correct Foolish Advice, i.e., giving the guaranteed investment contract a wide berth since I would have been in my early 30s? What if...?

So I've been in a guaranteed investment contract for 31 years, my only other option being a bond fund. I only hope that some of my younger colleagues take full advantage of the opportunity to be exposed to equities for many years. I'm going to do all that I can to spread the Foolish Word to my younger brethren.

Have a similar tale?
Talk about it in the Fribble Message Folder!