Have you thought about what it would be like to retire? Are you within 5 years of retirement? Is retirement even an option for you? Here are 8 questions that can help you with retirement planning.
In this video, I share with you the thinking that went into my decision to retire this year.
As I spend the last 3 months in a career I have had for almost 3 decades, I have asked myself these questions:
When, exactly, can I retire and bring home the most money?
Missouri teacher retirement is amazing. If you can stick it out long enough, you can bring home as much as you were making when you were actually working. When I was married I made the decision that I would retire at 25 years so that I could be a more present parent. With two incomes we could have survived if I brought home a little bit less than I was making.
My retirement planning changed when I became a single mom. First, I needed the distraction of a job to get through the emotional trauma of a divorce. Second, I needed the money to pay for debts accrued by the divorce.
How much money do I need to retire?
Ideally, getting the same amount of money in retirement is the goal. In Missouri, I started getting my retirement projections 7 years ago. I could get a printout of how much I would bring home each year I was eligible for retirement. When I learned the “rule of 80” my mind was made up. At year 29 I can retire with the rule of 80 (my age + years of service = 80) If I worked 3 more years I would bring home more money, But when you know, you know. More on that later.
How much will I actually get when I retire?
My take-home when I retire will be very close to the same as my take-home now. Missouri uses your highest 3 years’ salary to determine your retirement. My highest 3 years have not been the last 3 years. My take-home amount may be more than I take home right now.
What expenses will I have to pay that my school has been paying
Two expenses I need to keep track of are health insurance and taxes. My district has paid the majority of my health insurance for 29 years. Each year we have to pay a small amount. In retirement, I can choose school insurance or go out on my own and find my own insurance. For the first year, I will choose school insurance.
There are two ways I can handle taxes. I can save money on my own and pay each year. Or, I can specify an amount to be withheld and they take care of it. I know myself well enough to know that I would not save the money on my own so I will have it automatically withheld.
How do you ultimately decide when to retire?
I have always known the earliest possible date to retire and the latest date. My divorce made the decision that I would have to stay longer than 25 years. Then, I just needed to determine how much longer than 25 years. The rule of 80 snuck up on me. I actually didn’t realize I was that close to 80. That’s when it comes down to when you know you know. If I had known more about “critical teacher shortage” teaching in our state I would have retired last year and done that this year. 32 or 33 years would have been as long as I would have worked. Covid, cancel culture, and the teacher and sub shortage nudged me, to put it nicely, to retire this year.
When do I tell my boss? My co-workers? My family?
One of the most strategic pieces of retirement planning is when to tell everyone. Our district offers a $1,000 incentive to retire or resign by December 1st. No matter what year I chose to retire I knew I could retire early enough for the bonus. I announced my retirement to my staff in October knowing I’d have to work the rest of the year.
I wanted to honor the process of finding my replacement and making a smooth transition. This gives the district time to hire a quality candidate and not a last-minute candidate. It also gives everyone the opportunity to wrap their heads around the changing of the guard.
What am I going to do with all this time I thought I wanted?
On the weekends and nights that my daughters are gone, I pretend I am retired. It is hard to wrap my head around how much time I will have. Not just the actual time to do tasks but the mental time and space I have not had for 19 years. The best part is knowing that if I don’t stick to my plan, or change my mind about things, it will only matter to me.
Also, the fear of loneliness is real. My girls will keep me busy as they are in high school and involved in a lot of activities. However, they will be at school during the day and they spend time at their dads a little during the week and on weekends. I have tried to “practice” getting ready for that but I still have some anxiety about loneliness.
What’s it really going to be like on the last day?
There is more than one “last day” coming up.
The last day in a whole district staff setting. I have worked in this district for 29 years and have a lot of friends here.
The last day with students. That’s just going to be surreal. I don’t even know how to process that.
The last day with staff.
Then the last day in my building when I walk out the door for the last time. Leaving the building for the last time makes me really nervous. This is when I will no longer have a key or the passcode to override the alarm. Teachers won’t be able to text me to turn the alarm off so they can get in to work.
That’s a lot, right? If you are a teacher or principal, what does retirement planning look like in your state? Let us know in the comments.
Check out this video: My Principal Retired, Now What?
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