Sorry, in advance, that this will be long. It's almost winter break, and I'm guessing you are probably pretty tired, but this is important, regardless of your age.
I have been talking this up to some of you in person for almost a year now, but those who haven't heard, please consider... and please pass this information on to other teachers in the STRS system that you know who aren't on this list-serv.
In a nutshell, your retirement "paycheck" each month, whenever you decide to retire, is based on a formula that involves your age factor (which is not your age), your years of service, and your base salary. (For verification of any of this, go to www.mycalstrs.com, and open an account.)
You cannot change your age factor. You cannot change your base salary. But you CAN alter your years of service.
One way is to hope/pray/chant that Golden Handshake will be available to you when you leave.
The other way is to buy what's called Non-Qualified Service Credit, nicknamed "airtime," which is very expensive, granted, but less expensive if you're younger. But you can only purchase this "time" UNTIL DECEMBER 31 of THIS YEAR!!! (This is due to "pension reform...") See our STRS website, with several links about this topic: http://calstrs.com/Newsroom/whats_new/nonqualified_service_credit.aspx
Basically, you buy service credit, any portion of up to 5 years maximum. (In other words, you can buy 1 year, or 3.18 years, or any variation -- you can even say, "I have _____ amount of dollars available. How much airtime can I buy?") Again, ONLY UNTIL DEC. 31st!!
I waited too long age-wise, and it cost me lots, oh yeah. But luckily I was informed I could roll-over my TSA/403B to buy the time. That's what I did (I was lucky to have two; one from my SoCal years, one from here.) And the reason I did is because a tax sheltered annuity or 403B fluctuates with the market -- it's up, it's down, it's down more, whereas, your STRS retirement check will actually go UP every September 1 after the first September of your retirement, a guaranteed 2% increase. No, that's not much. But how many raises have you gotten lately? Nope, I don't remember the last time either. And there's no guarantee with payout of your TSA. See?
So you can buy airtime in using a qualified rollover (i.e. TSA), a lump-sum payment, or up to 120 monthly installments, all made before retirement (payroll deductions are an option).
When I was a younger teacher, even into my 40's(!), I never really thought about retirement. It snuck up on me, honestly, maybe because I loved my work, added to the idea that I couldn't imagine NOT teaching. And then suddenly the dollar amount I'd be bringing home after retiring became VERY important, especially when in our district retirees pay 20% of their benefits, which I'm here to tell you, is about $415/month for hubby and me this year for Anthem Blue Cross. That's lots out of a retirement check.
That 5 years I bought, not including the Golden Handshake, is worth over $600/month this year, and more every year after this.
Go ahead -- try the myCalSTRS calculator on the website. Put in the number of years you think you will have taught by the time you retire. Then add 5 years. Look at the difference. I had 31 actual years teaching experience when I left last June. Plus 2 for GH. Plus 5 for airtime. Total = 38 years teaching experience, lots more money, frankly, which is needed to enjoy this life after working full-time.
I tell you this because it is likely to make a big difference in your decision about when to leave teaching, and in helping you plan how financially secure you may be.
Remember that Michael Juric is available in the STRS office at SCOE, but not full-time, and this decision must be made in the next few weeks.
This is a lot of information to digest, I understand. But best to have it and digest it, rather than hear about it too late, and have regrets. Do what's best for you and your family, for sure.
I think of you all often. And yes, I miss teaching. But I sure as heck don't miss that paper load! :-)
Michelle Berry -- WHS, retired
Regarding capping benefits for employees:
I have worked for a few districts that have capped benefits for employees, and in the end it never works out well for the employees. In a district I worked at for the last few years the union went ahead and gave this concession to the district, and as the years passed the teachers began to realize what a mistake this was.
First of all, they did this with the idea that it would only be for a while, to help balance the budget and perhaps keep things better in the district, but as the state of budgetary affairs turned south over the years the notion that they would ever get back what they signed away faded with the breeze. There was no way the district was going to give this one back to the teachers. And this hurt. For example, to cover my family of three with a nice Kaiser package in the Windsor district I only have to pay roughly $150.00 a month. The Windsor district right now has some of the best coverage for district employees in the northern part of the state. However, in the previous district where the employees allowed their benefits to be capped, for the exact same benefit package I have at Windsor, I had to pay $975.00 a month, while the district paid roughly $500.00. This difference is almost comical (except I never laughed as I opened my paycheck monthly).
This is also a slippery slope, as the employees are asked to give up their rights for the good of the district. Please be aware that all rights given up are rarely given back and I have seen this firsthand. The idea that since teachers care, they will do anything is used as leverage and blown out of proportion and then held against us. It is true that teachers care and most will do anything for their students, but is this any reason to take away their rights and benefits? An act that I have come to believe completely devalues teachers and all that we do. There are other answers and making it even more challenging and more stressful for teachers is not a viable option. I would urge folks to be acutely aware of what they pay for benefits, and all their rights. I have seen first hand many districts lure these away from teachers who only came to resent the fact that they had been duped.