Retirement for Public School Teachers

Tom did not go into teaching to become rich, but it turns out that by making a series of good choices, he is anticipating a comfortable retirement for himself and his family. In some ways, he is more financially secure than some of his non-teacher friends! Tom, like most teachers, plans to rely on three key sources of retirement income: state retirement, Social Security, and personal investments. Teacher retirement programs vary from state to state. It is important to understand how things actually work in your state. This includes the formula that determines your retirement benefits, how benefits are paid out, income taxes, and double dipping for more income. Most teachers pay into Social Security, but teachers in 15 states and the District of Columbia do not. They will have to depend more heavily on their state pensions and personal savings. Now is a good time to visit the Social Security Administration website use its many tools to do research on your retirement. If you are like Tom, you will also need to eventually tap into your personal savings. This is where those tax advantaged retirement savings built up in a 403(b) plan come into play (Chap. 7).