- The Path to Retirement Security
- Defining Retirement Security
- Staying on the Road to Retirement Security
- Backloading: Pensions are Designed for Teachers Who Spend Their Entire Career in a Single State
- Most Teachers Will Not Earn a Full Pension
- Pensions Don’t Transfer Across State Lines
- People Do Not Always Earn As Large of Pensions as They Think
- Some States Have Minimized These Challenges
Defining Retirement Security
If a retirement system for teachers is not actually providing security in retirement, then something has gone wrong—or it wasn’t designed well in the first place.
The easiest way to define what is meant by “retirement security” is to compare the amount of income you’ll receive as a retiree to the income you make during your working years. Most financial experts define a secure retirement as receiving retirement income that is 60% to 80% of the salary you were earning during your final working years.
If you are a teacher who participates in Social Security it can provide up to a 40% replacement of your career earnings, but that likely won’t be enough so you need some additional source of retirement income to get to that level of security. If you are not allowed to participate in Social Security, your retirement plan needs to provide the full replacement income.