Author Topic: Pension questions for my fellow Teachers!  (Read 747 times)

tennisray

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Pension questions for my fellow Teachers!
« on: February 20, 2020, 05:18:08 PM »
Our state retirement for teachers pension requires 10 years vested and 30 yrs service or age 60.

I like what I do, but donít want to become like some colleagues who are holding on for full retirement. We are allowed to buy up to 3 years ďair timeĒ at full actuarial cost (it will be $, but you can purchase via 403b). That will help. But Iíve noticed in other states, they allow up to 5 yrs purchase.

How hard is something like this to change? Do I need politicians help with this? I see this as a win - win. Schools get to rid themselves of teachers who donít want to be there, and teachers donít have to feel locked in to working past their desire.

FYI this is my 18th year, so Iím almost there! I already bought 3 years time from working out of state.

DeniseNJ

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Re: Pension questions for my fellow Teachers!
« Reply #1 on: February 20, 2020, 05:43:48 PM »
Are you sure you can't retire sooner and wait until 69 to get the pension, prorated for your num of years?

tennisray

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Re: Pension questions for my fellow Teachers!
« Reply #2 on: February 20, 2020, 05:57:03 PM »
Are you sure you can't retire sooner and wait until 69 to get the pension, prorated for your num of years?

Yes, I can leave service now and wait until 60, but I wouldnít receive healthcare in the mean time. Iíd love to be able to retire in 7 years at 25 yrs of service.

Cassie

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Re: Pension questions for my fellow Teachers!
« Reply #3 on: February 20, 2020, 06:33:28 PM »
My experience has been that states donít usually make choices that benefit the workers. Things are usually changed for the worse when they are changed.

tennisray

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Re: Pension questions for my fellow Teachers!
« Reply #4 on: February 20, 2020, 06:43:36 PM »
My experience has been that states donít usually make choices that benefit the workers. Things are usually changed for the worse when they are changed.

Haha, so true!

Cassie

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Re: Pension questions for my fellow Teachers!
« Reply #5 on: February 20, 2020, 06:49:36 PM »
In my state we could retire early if we took a penalty for each year earlier that you went. I went 2 years early. Now 8 years earlier the penalty is bigger. Also the public hates that state workers get pensions.

tennisray

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Re: Pension questions for my fellow Teachers!
« Reply #6 on: February 20, 2020, 07:03:18 PM »
In my state we could retire early if we took a penalty for each year earlier that you went. I went 2 years early. Now 8 years earlier the penalty is bigger. Also the public hates that state workers get pensions.

Yes, there is definitely pension-envy by others!

We can retire up to 5 years early, but face a 7% reduction per year in benefits. I would rather pay for airtime to get full benefits bc Iím optimistic that Iím in better shape medically than others my age and would live longer to make up that cost!

tyd450

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Re: Pension questions for my fellow Teachers!
« Reply #7 on: February 21, 2020, 06:52:01 AM »
My wife was a teacher up until last year and was one of two teachers at her entire school who contributed anything to a 403b.  Everyone just seemed to think that their retirement was already taken care of for them with the pension and they have nothing to worry about.  They also don't contribute anything to social security so they don't have that to fall back on either. 

Cranky

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Re: Pension questions for my fellow Teachers!
« Reply #8 on: February 21, 2020, 07:03:00 AM »
We've put a heck of a lot more into my dh's state teachers' retirement than we would have into social security - which he also paid into for 20+ years.

But anyway, the teacher's retirement fund should have reps who can answer these questions about buying credits.

thece1ebrity

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Re: Pension questions for my fellow Teachers!
« Reply #9 on: February 21, 2020, 07:24:33 AM »
My SO and I are both in public education in NJ.  As far as I know we don't have any option to pick up "air time" pension credit.  The only option we have is to buy time while we were on leave (ie maternity) or if we had been employed paying into another pension system (ie career change from being a fire fighter or moved in from another state). 

For us it's ten years until you're vested, but you can't collect until your 65.  You were able to collect at 55 up until 2007 and they've been increasing the age since.  Our only option to start collecting early is to put 30 years into the pension system and then lose 3% for each year under the age of 65.   https://www.nj.gov/treasury/pensions/documents/forms/sp0774.pdf

My plan is to have a higher withdraw rate on my stash when I retire and have a reduced stash by the time I hit 65.  Anything I withdraw over 4% in the years leading up to pension contributions I'm assuming will be a reduction in my stash.

My wife was a teacher up until last year and was one of two teachers at her entire school who contributed anything to a 403b.  Everyone just seemed to think that their retirement was already taken care of for them with the pension and they have nothing to worry about.  They also don't contribute anything to social security so they don't have that to fall back on either. 

I've seen the same as tyd450.  I had a former colleague who was 55 and eligible for over half of her current salary for life but still couldn't afford to retire!  She planned to bump her 403b contributions up from $25 a pay to $50 that year...

tennisray

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Re: Pension questions for my fellow Teachers!
« Reply #10 on: February 21, 2020, 09:06:27 AM »
My wife was a teacher up until last year and was one of two teachers at her entire school who contributed anything to a 403b.  Everyone just seemed to think that their retirement was already taken care of for them with the pension and they have nothing to worry about.  They also don't contribute anything to social security so they don't have that to fall back on either.

I thought about becoming a financial advisor for teachers when I retired.  However, after working with friends who are teachers, I think it is a hard group to work with!  I think because most teachers are used to doing things their way with their classrooms, it makes it hard to change their thinking. I at least tell them to use TIAA instead of Lincoln or AIG for their 403b's, but they like that those other guys bring them pens and will sit and talk to them (usually about investing in managed funds that have higher exp ratios!)

tyd450

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Re: Pension questions for my fellow Teachers!
« Reply #11 on: February 21, 2020, 09:12:41 AM »
My wife was a teacher up until last year and was one of two teachers at her entire school who contributed anything to a 403b.  Everyone just seemed to think that their retirement was already taken care of for them with the pension and they have nothing to worry about.  They also don't contribute anything to social security so they don't have that to fall back on either.

I thought about becoming a financial advisor for teachers when I retired.  However, after working with friends who are teachers, I think it is a hard group to work with!  I think because most teachers are used to doing things their way with their classrooms, it makes it hard to change their thinking. I at least tell them to use TIAA instead of Lincoln or AIG for their 403b's, but they like that those other guys bring them pens and will sit and talk to them (usually about investing in managed funds that have higher exp ratios!)

The only reason I know that she was 1 of 2 total teachers contributing anything to a 403b is because one of the financial advisors would walk around the school once per year and talk to teachers and told her that.  When we signed her up for the 403b they gave her a list of providers she could use.  They tried to steer her towards this financial advisor guy to help her figure things out but he was your typical salesman type who was looking to skim a % off the top.  We chose Vanguard and handled everything ourselves.

At least here in IL, I think a job as a financial advisor for teachers would be a very frustrating and tough gig....  the teacher's union is giving teacher's one message and you would be competing with that in my opinion.

TomTX

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Re: Pension questions for my fellow Teachers!
« Reply #12 on: February 22, 2020, 08:52:23 AM »
Are you sure you can't retire sooner and wait until 69 to get the pension, prorated for your num of years?

Yes, I can leave service now and wait until 60, but I wouldnít receive healthcare in the mean time. Iíd love to be able to retire in 7 years at 25 yrs of service.

Sounds like the (unfortunate) answer is to either work for 9 more years + buy 3 years, or wait til 60 to collect the pension.

tennisray

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Re: Pension questions for my fellow Teachers!
« Reply #13 on: February 22, 2020, 11:27:15 AM »


Sounds like the (unfortunate) answer is to either work for 9 more years + buy 3 years, or wait til 60 to collect the pension.

Itís ok, I like what I do. 9 more years will go by fast. Iíd just like to have more options if possible.

TomTX

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Re: Pension questions for my fellow Teachers!
« Reply #14 on: February 22, 2020, 12:32:33 PM »
I'm in a similar boat, though with the "rule of 80" (age + years of service = 80) to get medical included with my pension. Or wait til 60 and get no medical included. 7 years, 3 months from now.  I like my job, I really dislike having to drive downtown 3 days a week.