Traditional Accounts + Teacher Pension Dilemma

In Ohio we can combine our public employee retirement years. So our teacher years could combine with another retirement system for say librarians, state and county workers, etc. What ever system you have the most years is accepts the years from the other system(s) - IF YOU SAY YOU HAVE OTHER YEARS WHEN YOU FIRST GET YOUR NEW JOB. - Maybe this could open up your employment options.

Each of us has to decide what is "enough." And also we each need to determine what "game" we are playing and trying to "win." One example from my life: a great real estate opportunity came up in my neighborhood in 2023. We could've pursued it and it would've ultimately meant more money later in life, but it was also clear that it would delay when we could stop working. I knew that we would have "enough" (by our definition) to stop working in 2025, and I knew that the "game" we were "playing" was to stop working as young as possible. So, it became easy to pass on the real estate opportunity as we already had our version of enough without it and if we bought that property it would mean we would do less well at the "game" we were playing (it would delay when we could stop working).

It's hard when most of the advice out there says we should all be playing the "have the very most money possible" game. But, it's up to you to decide. To me, the beauty of the FI movement is that we are people who aren't on autopilot and think outside the box, driven by our own personal values. What is "enough" for you and what do you really want out of your life? Only you can answer that.

I get it. I'm not a teacher, but I was waaaay burnt out. I was 48 at the time. I hit a wall one day, had a screaming fit (luckily WFH) and declared that one way or another, I would be done by 55. 7 years is tough, but it goesby faster than you think. You have a huge pot of money at the end, I think it's worth it to grind it out. What helped me do this was to just accept that the job sucks. I stopped expecting things to improve, found little ways to cope and just focused on my financial goals. I ended up getting to FI in 5.5 years. Honestly it went by like a blur.

With a big cliff like that on the pension, I'd say tough it out. It sounds like that's around when your 2nd kid would be heading off to college, which is also the perfect time to downsize and also maybe relocate if you want to.

FWIW, with that big of a pension, I would strongly consider switching to Roth contributions, even if that means you can't max them out. The reason is your effective tax rate will be much higher in retirement due to the pension filling up the lower tax brackets, so the general advice to prefer Pretax may not apply to you.

Hi! I’m 47 and left the teaching profession three years ago after totally burning out. My philosophy was that it was a mini-experiment and I could always go back! Well, by December of my leave, I made up my mind to resign (!). It wasn’t easy as being a teacher was my whole identity. I still have my pension but it will be half of what I could have. One thought experiment to try: Do I want to have $7,000/month at age 60 and be half-dead or have half of that amount of money and be fully alive? Anyway, it’s been the best thing I’ve ever done for myself, my relationship with my husband, and my mental health. Results: 1) My husband and I save a lot less now (I was maxing out both my 403b and 457 and my HSA) so our lifestyle didn’t change much. 2) I’ve had the opportunity to try more mini-experiments (like asking friends if they need help with projects and I’ve done things I’ve never done before bc of this!); 3) I’m able to work out during the day which has been amazing! 4) We can take trips during the school year when no one else is traveling; 5) my days are totally flexible due to the nature of my current part time job. Everyone’s journey is different and taking a leap is terrifying. But knowing that nothing HAS to be permanent is freeing!

You've already received lots of good feedback from the other commentors, so I will just add a pointer to The Golden Albatross. This is the go-to resource for thinking about pensions in the context of FIRE.

Ep 057 | The Golden Albatross | How to Value Your Pension

How to properly value your pension benefits and calculate whether staying for full vesting is worth the opportunity cost to your FI timeline.

ChooseFI

The Golden Albatross by Grumpus Maximus | ChooseFI

The Golden Albatross Has Landed! - The Golden Albatross

Former teacher here- the struggle is REAL. What is your FI number? What are your yearly expenses?

For possible expansion, my husband has a local gov't pension. We are retiring early in 2 weeks- he will be 50. His pension is cut in half (he can start taking it now) but it covers half of our yearly spend. Our portfolio just had to cover the other half.

I'm with @Jonathan Mendonsa - do the math on this and then figure out HOW to leave teaching now, not if. Could you cut expenses? Do something else? Work part time?

Message me if you want to chat more- but def let us know what you decide!

love this question - 😊 and definitely think you should map out your financial independence plan to see how your numbers are looking… and am looking forward to seeing what feedback you get - 7 years sound like eternity based on what you are describing… I would be curious in seeing you explore all options …. what if you went to part time - what if you took a year off, stayed in the profession but changed role location etc …..

it sounds like you have already done enough to be able to justify this and if you have reached 7 figures and have a 7+ year runway to 60 your current net worth will probably double before then ( you are easily already coast fi) as long as you aren't having to draw down on it ..

don't go to the decision right away but definitely give yourself permission to explore this seriously 😊

also are you working but also paying for childcare… some cost might go down further offsetting the decision

Definitely leave the classroom if you are burnt out, but is there anything else you can or are interested in doing in education? I’m a teacher in Texas. My plan is to stay in the classroom until the mortgage is paid off. I’ll still need more years in the pension plan after that, but will be okay with a reduced salary. I’ll be at the point where I can just let the investments grow until I finally leave the workforce. So I want to be an attendance clerk or payroll clerk or something similar. I’ll just want to punch a clock and go home. But that way I can still bolster my pension with years of service by staying in the retirement system.