The long and winding road into retirement.
When you hit 55 here in California, a teacher can begin thinking about the retirement process. At some point starting at age 55 you must declare with STRS what option you plan to take for your retirement benefit which will depend on if you have a spouse and how well their retirement plan will take care of them in case of your death.
I went into my first individual retirement meeting with STRS in December of 2011without Christine which turned out to be a mistake that caused me to not do much about nailing down the option we thought would fit our needs best.
The earlier you make this declaration the more you will get monthly when you retire, but I am not really sure how much I lost by procrastinating over this decision. At this point I really do not want to know. My advice is consult your financial planner and make the decision as soon as you can.
The good news is that in the interim time we got more deeply involved with our financial planner who advised us both to take what STRS calls the 100% option which means we will get the same retirement benefit for life regardless of who dies first.
The most significant keys to maximize your retirement with STRS are 1) teaching at least 30 years; 2) teaching until you are at least 61.5 years old when you will get the 2.4 multiplier.
This means you take your number of service credit years and then multiply that number by 2.4. If you teach for 40 years for example, you will get 96% of your highest salary year. Understand that in retirement you will no longer be paying into STRS which for me is over $500 per month and will not longer have to pay any association dues – over $100 a month.
The other big unknown for me in retirement was what would happen to the other benefits currently provided by my district: health care, vision, and dental. As it turns out my district continues to pay both my healthcare and my dental in full until I turn 65 and am able to go on to Medicare. The coverage as it turns out is the exact same coverage as I received while I was working. Also, it is great to learn that all healthcare, dental, and vision coverage continues until the end of August. The only cost I will have out of pocket is the $9+ per month for vision care starting in September.
The problem was with Christine as she doe not work directly for the San Juan District but for the charter school Visions in Education. In her case she receives no healthcare, vision or dental when she retired. She will be covered on mine until the end of August. On the first of September she will have to use COBRA to she will have to pay her own healthcare, dental, and vision. The healthcare coverage will cost $651 and the dental and vision $56 monthly on COBRA.