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How Teachers Can Catch Up For Retirement In A Hurry

How Teachers Can Catch Up For Retirement In A Hurry

| July 24, 2019

When you make the decision to become a teacher, it’s usually because of your passion for learning and desire to educate the next generation, not the salary. The average annual salary for public school teachers ranges between $40,000 and $85,000 a year, and what you earn largely depends on your state, school district, the grade level you teach, and your education and experience. (1)

But if the continual teacher protests tell us anything, it’s that teachers are underpaid for all the tireless work they do, to the tune of 17% less than workers in other sectors with similar education levels. (2) So while it may be harder for teachers to save for retirement while trying to keep up with all of life’s expenses, some strategic planning can help you catch up for retirement in a hurry so you don’t sacrifice your future while investing in the future of America’s youth. 

1. Supplement Your Pension

Yes, teachers do receive a pension as a benefit for their dedication, but pension plans are often underfunded, benefits are frequently cut, and only the teachers who stay in the profession for the entirety of their career reap the full benefits of this perk. (3) In other words, don’t rely on your pension to fully provide for you in retirement. 

This is where you can take control of your retirement by supplementing your pension in other ways. If you have access to a tax-advantaged defined contribution plan, such as a 403(b), contribute as much as you can up to the 2019 limit of $19,000 ($25,000 if you are over age 50). If your school district helps you out by matching contributions, be sure to save enough to take full advantage of their match. Aside from a 403(b), you can open an IRA or Roth IRA and build your nest egg on your own. There are advantages and disadvantages to some of these strategies, so be sure to talk to a professional about which plan is right for you. 

There’s another reason why you need to start saving as early and often as possible. If you are a public employee, in certain states (15 to be exact) you are not covered by Social Security, or your Social Security benefits are reduced, Colorado included. With a salary that just doesn’t seem to leave you with much wiggle room, how can you come up with this mysterious extra money to save? Here are some ideas to consider.

2. Work On The Side

Many teachers enjoy the perks of the school calendar, especially the Christmas, spring, and summer breaks. And while you deserve to relax after working hard for your students all year, why not use this time to supplement your income with a side hustle? The entrepreneurial opportunities seem endless these days. You could stick with more traditional work, like tutoring or working in summer programs, or you could put the work you’ve already done to good use and sell your curriculum, create an e-course for other teachers or educators, or teach at a local college.

Or, if you need a break from the teaching you do all year, you could monetize a hobby that you already spend time on, whether that’s taking your blog to the next level, writing for online publications, or selling handmade goods. It might take a little creativity, but that’s one thing teachers have plenty of! Then funnel your extra money into your savings and watch compound interest take your money even further.

3. Increase Your Salary

As a teacher, you probably receive pay bumps according to your years of service. But instead of waiting for the years to pass by, you can take some initiative to increase your salary as you go. For example, some schools pay their teachers for taking on extra responsibilities. So if you enjoy coaching or want to act as an advisor to a student club, you might be in luck! 

Teachers are also usually required to continue their education in some way, shape, or form. If you are strategic about it, you can work to satisfy this employment requirement while also increasing your salary by earning a master’s degree or other certifications. Some school districts will even pay for some or all of your tuition. Another option is to pursue National Board Certification. Aside from the possible salary increase, this prestigious accolade could also put you in a position to apply for better jobs and improve your career outlook.

4. Eliminate Debt

Living debt-free is a worthwhile goal for anyone to pursue, but when your financial opportunities are limited, reducing your consumer debt before retiring helps you lower your monthly expenses and enables your savings to grow and last longer.

Review all current debts you face and compare interest rates and balances to help you decide which to pay off first. Once you’ve eliminated credit card and auto debt, see how you can aggressively pay off your mortgage. Not having a mortgage could reduce your monthly expenses by up to a third and make a significant impact on how you spend your savings. 

And if you still have those pesky student loan payments to deal with, you may be eligible for student loan forgiveness, or at least a reduction. The Public Service Loan Forgiveness program (PSLF), the Teacher Loan Forgiveness program, and the Federal Perkins Loan program are worth your time to research. 

Need Help Catching Up?

You spend your days giving of yourself to others, but it’s equally as important to take the time to invest in yourself by planning for a secure retirement. At Setchfield Asset Management, we tailor our services and strategies to your unique needs and concerns so you can have confidence in every area of your financial life. We specialize in helping teachers make the most of their money so it’s there as long as they need it. 

No matter how old you are or how little you have saved, it’s never too late as long as you get started today. Schedule an introductory meeting to see if we are the right fit by emailing me at or calling (303) 627-1099.

About Steve

Steve Setchfield is chief investment strategist at Setchfield Asset Management, an independent financial advisory firm. With almost 30 years of experience, Steve serves his clients by keeping them out of financial trouble in volatile markets, using a low-key, rules-based approach to investing and helping them with every aspect of their financial lives. Steve studied finance at the Metropolitan State University of Denver and spent several years working at Shearson Lehman Brothers and Kemper Securities before founding his own independent firm so he could offer objective, personalized advice and strategies. Steve is a Colorado native and enjoys skiing and other outdoor activities. He spends his free time volunteering for Big Brothers/Big Sisters of Colorado and coaching wrestling in the Cherry Creek school system. In 2003, Steve was a living kidney donor for his uncle who suffered from polycystic kidney disease. To learn more about Steve, connect with him on LinkedIn.