Post #11 Is Ohio Teacher Retirement Within Reach For Me?

I have several of my friends and colleagues whom are reaching the milestone of retirement. With 25 years of service myself (24.66) I’ve become a bit envious of my friends leaving the daily grind. As I begin to eye retirement the common misconception would be that I don’t want to work. This is not the case. The K-12 teaching profession is changing rapidly and the amount of influence the bureaucracy and administration has over the individual classroom has increased substantially. Again, please don’t misconstrue. Accountability is good, but when you micro-manage every step a teacher takes teacher autonomy evaporates and, in my opinion, so does the quality of students’ education. These elements have made me more aware of the possibly of exiting early. A second career is not really appealing, but a side hustle or contract work may be in my future. It’s always good to know your options so one day last week I set up a video conference with our teacher state retirement system.

The representative was very helpful and was extremely honest and up front with any questions I had. The most important topic for me was that of insurance. As of July 2021 the basic insurance plan for anyone who is single and retired was $411 a month. This amount was for someone with 30 years, 35 years, or anyone in between. The representative did hint that big changes were going to be happening to the insurance policies beginning in 2023 including a possible pro-rated insurance policy for those that have retired before 35 years. If that is the case the cost of insurance they gave me over the video conference now becomes meaningless. However, it still gives me a starting gauge as to what insurance may cost in the future.

We ran five situations based on projected final average salaries. This was a big speculation because my salary currently is approximately $75,000 and the first average salary the representative used was $83,689. The calculations the computer program used to determine my final average salary was 1% a year increase. My school district has been known to NOT keep up with pay increases so it would remain to be seen if this would indeed be my final average salary. Nonetheless, the chart at the bottom illustrates the five scenarios the representative and the state teacher retirement system concluded for me.

Retirement Date	Age	Assumed Final Average Salary	Yrs. Service	% of salary	Retirement $ Amount Per Month
6.1.2028	54	$83,689	31.66	41.79	$2,914
6.1.2029	55	$84,526	32.66	45.98	$3,239
6.1.2030	56	$85,371	33.66	51.84	$3,687
6.1.2032	58	$87,087	35.66	65.11	$4,725
6.1.2034	60	$88,838	37.66	82.85	$6,133

The amount of money per month is before federal, state, local taxes and any insurance plan deductions. Currently, I clear $4,000 a month (I have $500 a month going to a 457(b) accounts) and I have vowed to myself NOT to work until I’m 60 years old. This means I have a big gap I need to cover with my investments, especially if I want to retire before my mid 50’s. There is also an option of taking all money out of STRS which should be closes to $400,000 at the point I’m looking to exit. If I chose this I would break complete relationship from the state retirement system and would be responsible for all insurance. While the numbers were disappointing I had followed the information that has been available on the teacher retirement website and it fell in line with what I already knew. The state of Ohio has done a complete overhaul of the teacher retirement system a few years ago. A handful of teachers within certain parameters have been grandfathered in under the more comfortable retirement configurations, however, unfortunately those easing of policies are not subject to my own individual circumstance.

Knowledge is power. This information is a catalyst to save more and continue to search for better investment strategies to get closer to my goal of life style choice and financial independence. Best of luck to you as you research and formulate your own path!

~ Quiet Turtle