For every older teacher we know who is really doing well, we know another who can't retire, or is retiring with a ton of debt, and a much lower pension, due to dumb decisions.
Yeah, I'll give a couple examples:
- About two years ago one of my co-workers retired (nice house, sent her kids to private colleges, lots of vacations, new cars constantly ... yeah, lots of debt) ... and after she attended a retirement seminar, she came back
horrified, saying that our pension is less than our current paychecks! Um, yeah, I did know that. How'd I know? Well, the pension formula is public knowledge; it's in the benefits book they gave us all, and it's easy to find on the internet. I attended that retirement seminar when I was not yet 30, so yeah, I did know -- to the penny -- how much my anticipated pension will be.
- I was talking with a math teacher -- don't miss that detail, a math teacher -- who has a couple years to go, and he was asking if I understood the concept of choosing one of the four pension options. I did, and we started running numbers. He was inclined to go with the maximum pension number because he and his wife have NO other retirement savings, and they'll need the money ... and
I had to show him twice that he and his teacher wife should BOTH go with the 100% survivorship option. Finally he saw that they needed to give up about $250/month so that the spouse who dies second won't have his or her main income sliced in half.
- I sometimes read an online teacher board, and I completely failed to help people there understand that, yes, with the Pension + Social Security option, you CAN have the state pay your Social Security until you turn 62 ... but that option means you're accepting a lower pension for the rest of your life. They kept saying, "But my friend took it a decade ago, and her check didn't change when she turned 62." Yeah, yeah, but ... oh, I just gave up. Examples didn't help.
On the other hand, a full 50% of my teacher friends live like I do: On considerably less than they earn, paying off modest houses, driving modest cars, living frugal lives. Those of us who've made these choices are heading for comfortable retirements.