Sick leave payout at retirement

[ToddC178610]

I am retiring as a teacher in the Cherry Creek School District. My sick leave
payout of $51,000 must be paid over 2 years.  My district is telling me that
I can only shelter the first half to a 403B in August, 2022. The district
says I won't be an employee for the 2nd distribution in August, 2023,
however, I will be a substitute teacher employed directly through the
district. Is this accurate? Thank you!

[BillN987603]

It's likely that substitute teachers do not receive benefits and thus are not able to contribute to the 403b plan...so if you're not a benefitted employee for 2023, they won't allow the contribution. It is still earned income, so an IRA may allow you to contribute and deduct...or a Roth IRA instead, so you have no required distributions and tax-free growth...check in with a local NAPFA advisor who may be able to help you work through your options and build a plan.