Want more money when you retire?

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