Teacher Retiring in the Next Five Years? Everything You Need to Know

Retiring as a teacher can be problematic if you’re relying on traditional plans like a pension. Data shows that it’s often not enough to sustain you in the long run when you’re no longer working. Many in the education system also don’t have Social Security benefit eligibility.

Even then, many potential income sources are available during retirement as a teacher. Most may not be eligible for Social Security benefits, but there are still options to have a comfortable retirement. You can mitigate most challenges by preparing everything 5 years in advance. It gives you enough space to carefully plan and ensure you’re getting what you need.

If you’re a teacher retiring in the next five years, be sure to read on.

Your Two Main Income Sources

Most teachers will have two income sources they’ve worked on during their careers. The first one is the pension. This is an account backed and managed by the state government.

They may also contribute to another retirement account, like a 401k, 403b, or a 457b. The employer may have offered their employee this contributed plan and opted to match the amounts granted, or the teacher may have been the one to pursue it.

The good news about these plans is that your employer can help build these accounts. The longer you’ve served under a certain institution, the more likely contributions will be consistent.


Pension is a combination of contributions taken from your salary and your employer. After you retire, you’ll receive a fixed monthly payment that will last for the rest of your life. This requires that you’ve worked a specific number of years and have made a certain amount of contributions. The pension can also benefit your spouse or another beneficiary if they live longer than you.

The advantage to having a pension is that it’s a guaranteed amount you’ll continue to receive until after retirement. You’ll also get a higher amount the longer you’ve worked as a teacher. However, you need to complete the specified period to qualify for it.

One of the things you should consider is the amount of years you have to complete pension requirements. You may need to spend more or fewer years before retiring to fulfill it.

The most complicated aspect of a pension is that it’s tied to the state. If you move states, it may not travel with you. It can be hard to justify your time teaching in another state. It is possible, but you’ll have to go through a long process.

The Retirement Account

The retirement account is a savings plan you and your employer contribute to regularly. Unlike the pension, a financial institution holds these accounts, putting the money in investments. Depending on your choice, you have some control over where you put your money. One distinct advantage is that getting it requires no strict requirements like a minimum number of years teaching.

The amount can also vary, depending on the performance of the investments in general. The amount may also fluctuate or grow, depending on market conditions. Given enough time, there is a much stronger potential for it to grow compared to the pension, making it an attractive addition to retirement income sources.

Are There Any Other Options Available?

Saving beyond your pension is always the next best step because it likely isn’t enough to sustain someone long-term. Because of the complications that can arise during claiming and eligibility, it’s also good to have backup sources of income beyond it.

The first source you need to consider is Social Security. Contributions to it will depend on your employer, so you’ll need to check your payroll deductions. You’ll only qualify for these payments if you’ve contributed at least ten years of private sector work. The results can vary as some employers opt for it while others don’t.

There may also be insurance plans that act as potential benefits during retirement. These act as a way to provide you coverage while also investing your money into assets. While not as popular an option as other retirement plans, it can also become a source of income. At the very least, it will provide some health, disability, and other benefits in an emergency.

Other teachers also use their spousal Social Security benefits if they’re married. However, the amount can vary depending on the government pension offset. It can be an additional source but may not be large enough to cover what you need for retirement.

Consult with Financial Experts

Many resources are available, like the Teacher Retirement System, if you’re looking for an expert to connect you to counselors. These are experts in retirement programs that are available to teachers within your area. Not only that, but most of these provide their services free of charge.

A licensed agent can help analyze what you’ll be getting after retirement and provide options on which steps to take. Some can even give a more comprehensive analysis and recommend financial avenues you may have missed.

Even a licensed agent outside the system can be helpful, as they have the training and knowledge to help you reach your goals. However, you should seek out those who are experts at planning for teachers retirement. You also have to ensure they prioritize your well-being and profits over their own.

Retirement Doesn’t Mean You Stop Working

You may want to consider partial retirement if you find there’s no way to enter into full retirement within the next five years. While it may not be ideal for some, it provides you with a steady source of income without having to commit all your hours in a day. Another issue is that some people may miss teaching and doing the related work, especially if it’s been their passion for decades. A partial retirement keeps them from feeling stagnant or bored while also continuing to provide for them.

With that said, not everyone can do this when they’re older. You may want to do other things, have other responsibilities, or be concerned with your health. It may also be challenging to continue to find teaching jobs.

You don’t have to stay limited to being a teacher as retirement may be an opportunity to pursue other jobs. However, you shouldn’t put all your eggs into the idea that you’ll be sure to find a job that covers your needs after retirement.

The Bottom Line

If you’re planning on retiring in the next five years, knowing what income you’ll be getting during it will give you more confidence. It also gives you enough time to check all your accounts and see if it’s possible to retire comfortably. 

If not, there are many steps you can take today and adjustments in your plan to make that can help you prepare for that inevitable future. Whatever the case, preparation is essential, and you can always seek help to reach your goals.

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If you are a K-12 educator or staff, collegiate educator or staff, municipal or state employee we can connect you with a licensed financial professional with the experience needed to help you understand your pension benefits and overall retirement plan.