Alabama Teachers and Retirement: What You Have to Know

Recently The Captain and I met up with a retirement counselor, because I'm officially halfway through this teaching career (in public education, anyway) and we needed to get a handle on where we are headed. I have had far too many teacher friends get to the end of their career and realize they have serious gaps in what they thought their pension would be and reality. 

Alabama teachers and retirement

The counselor was immensely helpful, very informed about all the details regarding teacher pensions in Alabama and enlightened us on more than a few details, including the fact that teachers hired before January 2013 will receive 60% of their current salary as retirement. Teachers hired after that point will only receive 40% of their salary as pension.

{Side note: What? 40%?! I have researched like crazy trying to figure out HOW and WHO and WHEN that dumb plan was passed because it will most assuredly leave our newest generation of educators in the dad gum poorhouse. Was it the RSA board? Or maybe legislators? Red party or blue party, purple or green, I don't care whose idea it was. Even the unions can't tell me how this happened and it just seems like somebody should be rattling cages on this little detail! 40%?! That is an incredibly cheap shot at teachers who spend their whole lives getting paid far less than they should have. It's ludicrous! If you're just starting out in the teaching field around here, just know you're what they call a "Tier 2" employee, and you better make sure you plan financially for that incredibly disappointing shortfall.}

We talked through some plans, which involves completing my 25 years, then hopefully another 10-year career in librarianship and time to hang with our grandkids when that day comes...far from now. Far, far away. Light years away. Like, take a shuttle ride to Mars for the weekend in our monogrammed space suits kind of far away. 

It feels too soon to be talking about all this. I mean, I'm just in my thirties and although it was a whole 8th grader ago it feels like YESTERDAY that I was walking into the interview for my very first full-time, professional job.

But then again, we aren't wealthy people and never will be. If we don't want to be living in a van down by the river when mama retires, we have to nail some junk down and we have to do it now.

That brought us to a massively confusing conversation (and by that I mean confusing for me; this number stuff is The Captain's JAM) about 401Ks, 403Bs, pensions, Roth IRAs, life insurance policies, various options in whether or not you want your dependents to be able to inherit your pension, transfer penalties, health insurance options AFTER you leave public education, yada yada yada. I was bored to tears and distracted by pieces of lint on the carpet because MATH, but basically what I gathered was that you're eligible to withdraw from different accounts at different ages, so you have to be really smart about how much to put where each month and then maintaining a plan for retrieving it all in phases.

The greatest takeaway for me was that it's really, really important to just do something to plan for retirement. Even if you are only stowing away a tiny bit each month (and putting it somewhere only your retired self can get it), then you're doing okay. 

More resources for thinking through your retirement plan:

Retirement Systems of Alabama

Lifehacker: 10 Things Everyone Should Know About Saving for Retirement

RSA Retirement Calculator