Author Topic: To leave teaching or not? (Pensions)  (Read 2913 times)

Dreamer146

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To leave teaching or not? (Pensions)
« on: June 01, 2017, 09:18:56 AM »
This is related to Teaching/Pensions: My husband is a teacher in a job he does not love (and increasingly dislikes). He has 11 more years to get to his full retirement (in his plan, this is currently 50% of his pay for life starting at his date of departure, which would be 54 yrs old, plus health insurance benefits at current teacher rates - this is all assuming they don’t gut the state of VA teacher's retirement plans). He would get a fraction of those benefits if he left now (something like $45K in a refundable account that he paid in and about $500/month starting at retirement age of 59.5, I assume?). I've found this info from doing some research on the state calculators, but unfortunately his school doesn’t know how to respond to our questions since I guess not a lot of people leave to stop working completely this early. Does anyone have experience with this? How did it work for you? Did you stay or did you leave? Another option he’s considering is to leave to work in a lower-stress state job with a lower salary for a few years and maybe to teach again right before retirement.
 
We are getting fairly well-prepared otherwise. We have jointly saved about $650K in a variety of retirement (ECAP, Roth, 457 and 403B), Vanguard, and an HSA and have a pretty good amount of equity in our house on top of that. I think we're pretty close to FI, but we’d have to move to a lower cost of living area if we decided to both completely separate from work. So, we’re likely going to continue work for a few more years to secure things a little better.
 
Any advice on the teaching front? My concerns are two-fold. One, my husband really is unhappy teaching and I think would like to go (but as is the case with many teachers I know, doesn't feel like he's qualified for other work, which he is, but that's another story) and two, I think we both have a really hard time leaving all that money on the table (something like $1M over the course of retirement).

I’m planning a separate post about the details of our financial plan, but haven’t quite put all that together. My question there centers around how to figure out how prepared we actually are. We’ve had a hard time finding a financial planner (or really anyone) who “gets” what we’re trying to do and agrees it’s feasible.
 
Thanks in advance!

nereo

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Re: To leave teaching or not? (Pensions)
« Reply #1 on: June 01, 2017, 09:41:15 AM »
This is related to Teaching/Pensions: My husband is a teacher in a job he does not love (and increasingly dislikes). He has 11 more years to get to his full retirement (in his plan, this is currently 50% of his pay for life starting at his date of departure, which would be 54 yrs old, plus health insurance benefits at current teacher rates - this is all assuming they don’t gut the state of VA teacher's retirement plans). He would get a fraction of those benefits if he left now (something like $45K in a refundable account that he paid in and about $500/month starting at retirement age of 59.5, I assume?). I've found this info from doing some research on the state calculators, but unfortunately his school doesn’t know how to respond to our questions since I guess not a lot of people leave to stop working completely this early. Does anyone have experience with this? How did it work for you? Did you stay or did you leave? Another option he’s considering is to leave to work in a lower-stress state job with a lower salary for a few years and maybe to teach again right before retirement.
 
We are getting fairly well-prepared otherwise. We have jointly saved about $650K in a variety of retirement (ECAP, Roth, 457 and 403B), Vanguard, and an HSA and have a pretty good amount of equity in our house on top of that. I think we're pretty close to FI, but we’d have to move to a lower cost of living area if we decided to both completely separate from work. So, we’re likely going to continue work for a few more years to secure things a little better.
 
Any advice on the teaching front? My concerns are two-fold. One, my husband really is unhappy teaching and I think would like to go (but as is the case with many teachers I know, doesn't feel like he's qualified for other work, which he is, but that's another story) and two, I think we both have a really hard time leaving all that money on the table (something like $1M over the course of retirement).

I’m planning a separate post about the details of our financial plan, but haven’t quite put all that together. My question there centers around how to figure out how prepared we actually are. We’ve had a hard time finding a financial planner (or really anyone) who “gets” what we’re trying to do and agrees it’s feasible.
 
Thanks in advance!
Hello Dreamer

I've highlighted some portions of your OP I'd like to focus on.
Your husband strongly dislikes/hates his job, and has 11 years before he can get full benefits.
At the same time the two of you have substantial savings. Perhaps not quite enough to retire full-monty, but definitely FU money.

A few questions to ask yourself and your husband are
1) what's your current annual spending rate
2) do you expect that to change post-work (and why)
3) what other income could you generate between now and FIRE?

My sense is your husband should quit his job this year because he really dislikes it. To make it to "full-ER" the two of you might need to supplement your income for a few years, though perhaps not based on #1 & #2. This can be a very low target to hit with your savings - in all probability it could be accomplished with part-time work (the "gliding into ER" approach). Alternatively you might be able to buckle down and boost your 'stach by working just 1-2 more years.

instead of framing this as how much money you are leaving o the table, I suggest you view this as the number of years your husband will be forced unnecessarily to do something that makes him unhappy.  11 years seems an absurdly long time. Remember, your time is finite.



Pigeon

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Re: To leave teaching or not? (Pensions)
« Reply #2 on: June 01, 2017, 09:59:51 AM »
My husband is also a teacher and hates his job.  He's got about another 5 years before he hits 50% of his salary in pension and our kids are out of college.  We want to have a fairly comfortable, stable retirement, and aren't ready to RE before then.

He's hated his job for a good 5-7 years or so.  The big question for us was what other job he might be able to get.  He was unable to see himself in other jobs.  It was also very convenient for us to have him get summers and school vacations off to be with the kids, and he decided to just stick it out.

Nick_Miller

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Re: To leave teaching or not? (Pensions)
« Reply #3 on: June 01, 2017, 10:07:25 AM »
This is related to Teaching/Pensions: My husband is a teacher in a job he does not love (and increasingly dislikes). He has 11 more years to get to his full retirement (in his plan, this is currently 50% of his pay for life starting at his date of departure, which would be 54 yrs old, plus health insurance benefits at current teacher rates - this is all assuming they don’t gut the state of VA teacher's retirement plans). He would get a fraction of those benefits if he left now (something like $45K in a refundable account that he paid in and about $500/month starting at retirement age of 59.5, I assume?). I've found this info from doing some research on the state calculators, but unfortunately his school doesn’t know how to respond to our questions since I guess not a lot of people leave to stop working completely this early. Does anyone have experience with this? How did it work for you? Did you stay or did you leave? Another option he’s considering is to leave to work in a lower-stress state job with a lower salary for a few years and maybe to teach again right before retirement.
 
We are getting fairly well-prepared otherwise. We have jointly saved about $650K in a variety of retirement (ECAP, Roth, 457 and 403B), Vanguard, and an HSA and have a pretty good amount of equity in our house on top of that. I think we're pretty close to FI, but we’d have to move to a lower cost of living area if we decided to both completely separate from work. So, we’re likely going to continue work for a few more years to secure things a little better.
 
Any advice on the teaching front? My concerns are two-fold. One, my husband really is unhappy teaching and I think would like to go (but as is the case with many teachers I know, doesn't feel like he's qualified for other work, which he is, but that's another story) and two, I think we both have a really hard time leaving all that money on the table (something like $1M over the course of retirement).

I’m planning a separate post about the details of our financial plan, but haven’t quite put all that together. My question there centers around how to figure out how prepared we actually are. We’ve had a hard time finding a financial planner (or really anyone) who “gets” what we’re trying to do and agrees it’s feasible.
 
Thanks in advance!

Well, him being unhappy for 11 more years is certainly not an option I would endorse for anyone.

You guys have options because of your Stache. How much would you both need to make to just pay your expenses for the next 10 years? Lower paying, perhaps PT jobs, with lower stress and more flexibility might be in order. And during that time, your Stache would double (assuming 7 percent returns) to $1.2M.  I don't know your expenses, but I would assume $48K/year draw at 4% would be sufficient?

Dreamer146

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Re: To leave teaching or not? (Pensions)
« Reply #4 on: June 01, 2017, 10:39:21 AM »
Walrus Stache... Wow, your post really hit me (in a good way). Excellent questions... Here I am worried about what we are leaving, but you are right. Life is finite. I probably should have mentioned that I worry about his health/stress-levels regularly and he's been "bringing it home" with him for the last couple years. Leaping into the unknown is reallllly scary though! We're both ridiculously conservative (and under-confident) with our finances.

Regarding the questions, I think we plan to spend quite a bit less. Right now we are annually around $50K due to lots of home repairs on our old fixer-upper, but we're estimating somewhere around $30K in the future - which would put us in the ballpark. Lower because we'll have time to do some repairs ourselves, we'll be able to cut back to one car, we'll be able to travel cheaper (off season), no more daycare, and (face-punch) less eating out/better meal planning & groceries. I haven't really looked into other income streams while we're still working - the kids keep us so tied up right now (meaning, we choose to spend all our free time hanging out with each other or them, not that it's a burden). I have been keeping my eyes open though...

I feel like he could get into another line of work if he wanted to, but one thing I've worried about is how employers see you when you've taken a leave of absence? (i.e. was he fired from teaching?).

nereo

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Re: To leave teaching or not? (Pensions)
« Reply #5 on: June 01, 2017, 11:02:40 AM »
A full case study may be in order here, but just going off what you said...

Currently you're note *quite* to ER-land, but you are very, very close. A 4% WR on $650k = $26,000, plus you'll have some pension and (presumably) SS down the road.  Your current spending rate is ~$50k but your anticipated spending rate in ER could be around $30k.

So there's a few options here.  My personal preference would be to look at other potential employment opportunities that he would enjoy more.  A job that paid in the $30-50k range could cover expenses for a few years while you guys glide into FI-land. That's not hard to do for a college-educated individual.  I'd encourage him to at least apply for a few jobs and see whats out there; he might be pleasantly surprised.

Alternatively, given your surmised age and savings it sounds like you have a good savings rate - how long would it take you to squirrel away another ~$100k? I'm guessing maybe 3 years with a little belt tightening. The two of you could set a target FI-Date and he could stick it out for another ~3 years (still 8 years sooner than he would if he waits for full pension).

several options out there but it sounds like you are in a good position to make sure decisions.

Dreamer146

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Re: To leave teaching or not? (Pensions)
« Reply #6 on: June 01, 2017, 11:17:03 AM »
Hi Nereo! Thanks for the suggestion. I am happy to do a full case study. Do I post it here or in the other string and link to it here?

nereo

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Re: To leave teaching or not? (Pensions)
« Reply #7 on: June 01, 2017, 11:40:20 AM »
Hi Nereo! Thanks for the suggestion. I am happy to do a full case study. Do I post it here or in the other string and link to it here?

Here's the link detailing how to post a cast study:
https://forum.mrmoneymustache.com/case-studies/how-to-write-a-%27case-study%27-topic/

I would start a whole new thread, detailing your questions regarding whether or not your husband should leave his job.
With lots of numbers comes lots of nit-picking and probably a few face-punches. Ultimately you may receive some very good advice about how you can reach your goals faster.

Dreamer146

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Re: To leave teaching or not? (Pensions)
« Reply #8 on: June 01, 2017, 11:48:07 AM »
Awesome, and thank you for all the advice. Now I'm off for more face-punches in the case study forum ;)

nereo

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Re: To leave teaching or not? (Pensions)
« Reply #9 on: June 01, 2017, 12:09:21 PM »
Awesome, and thank you for all the advice. Now I'm off for more face-punches in the case study forum ;)

Good idea to link it here, too.

spokey doke

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Re: To leave teaching or not? (Pensions)
« Reply #10 on: June 02, 2017, 07:58:56 AM »
If it was me, and you already plan to move to a LCOL area after pulling the plug, I'd be shopping for that new place now...with thoughts of potential side-gigs as part of the mix, while continuing to pad the stache and cutting back on sucka expenses where reasonable.

And...all that is very exciting, so you should have some fun shopping for a new place to live and enjoy.

That move might also be the most effective way to get over the "What else can I do?" rut...once you jump, all sorts of things become possible.

Mezzie

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Re: To leave teaching or not? (Pensions)
« Reply #11 on: June 02, 2017, 05:33:07 PM »
Teaching is not a job that should be done by people who hate teaching; it hurts the teacher AND the students.

Is it teaching itself he hates, or is it the climate (students and/or colleagues) at his school? Would asking for a transfer to another school/grade level/subject possibly make things more interesting/fun for him?

MMMaybe

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Re: To leave teaching or not? (Pensions)
« Reply #12 on: June 03, 2017, 04:43:30 AM »
Could he move into a related field, such as school administration, and keep his pension?

Smokystache

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Re: To leave teaching or not? (Pensions)
« Reply #13 on: June 03, 2017, 05:57:06 AM »
What does he currently teach?
What subjects is he experienced/qualified to teach?
What ages/grades has he taught?

I think this will give us an idea of some possible other positions/fields both in and outside of k-12.

BrendanP

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Re: To leave teaching or not? (Pensions)
« Reply #14 on: June 03, 2017, 07:42:07 PM »
Teaching is not a job that should be done by people who hate teaching; it hurts the teacher AND the students.

This is the most important thing IMO