Teacher Retirement
I’m 54 years old. Most of my life I have been in the Social Security system. I have only been a Teacher for the last 4 years. As a teacher, I am in the state Teacher Retirement program, an alternative to Social Security. If I stay a teacher until retirement, my teacher retirement will be deducted from my social security benefits. I understand that if I also worked in a job that contributed to social security at the same time as teaching for at least 5 years, I can collect both retirements at the same time. I’m not real excited about that prospect. Upon leaving teaching, I can withdraw my teacher retirement funds. Wouldn’t this be advisable for teachers like myself? To Roll the funds into an IRA that I could draw off of along with social security, and also have the possibility of leaving something to my heirs?
Permalink Submitted by Alan Spross on Sun, 2008-06-22 00:40
It sounds like the extra 5 years in the SS system would eliminate the offset from the windfall elimination provision otherwise applicable to you.
It’s not that you cannot collect both retirements at the same time without the 5 years, the issue is that your SS benefit would be reduced.
My impression is that most teacher pensions are lucrative enough that even with the windfall elimination, you are better off in total than if you had stayed with SS employment for the entire period.
The available retirement plans from teaching can vary and each state’s sytem varies as well. Generally, if you have a 403b plan you are better off transferring it to an IRA at retirement. You should structure your retirement assets such that they are not all in annuity form. SS is paid as an annuity with a COLA, and part of your teaching retirement may also be paid in that manner. You should probably consult with a planner to determine what mix you should roll over and what portion to take as a lifetime annuity. That is a complex decision and includes tax planning, estate planning, and risk tolerance.