Retirement is Weird

{I got through Monday, and you know what? It wasn’t that bad! I actually did end up arriving late. Getting out of the house was not awful, but there was an overturned Mini-Cooper on the freeway which caused a substantial amount of traffic. I only ended up getting there three minutes late, but it was still nerve wracking. And yet I managed my anxiety really well, and got through my two FLEXes without any issues. I actually really liked the block schedule day. I hope we do something like this next year.

And now onto the actual post…}

Retirement is such a weird topic. There seem to be three camps, the people who don’t worry about it and assume everything will just work out, the people who have it all planned out and feel confident they’ll have enough money when the time comes, and the people who haven’t thought much about it and are in denial or totally clueless (or both!)

We all know where I fall in this camp. I’ve been surprised to see where others fall.

I’ve gotten a lot of this line when I mention my reservations about going to a private school because of how it will effect my pension with STRS: you have to do what makes you happy and you can’t stay at a job just because of your retirement. Which, on the one hand, I understand; I wouldn’t recommend someone be miserable in a job just to protect their retirement prospects. But if you’re not miserable, and you’re not sure another job would make you happier, it’s a hard decision to make.

My one friend is 50 and of the “it will work itself out” persuasion. She has never “been able” (as she describes it) to save for retirement. She says that her parents didn’t and she hasn’t and it’s been okay. Her mother is still happily working and her father died suddenly in a motorcycle accident about 10 years ago. I’m sure his death plays into her refusal to make retirement “a thing.”

Sometimes it feels impossible to reconcile the two prominent messages: life is too short not to do what you love (or at least what makes you happy), and financial responsibility comes above all else. I know some people are able to manage both simultaneously–maybe some day I will be able to as well–but right now they feel mutually exclusive. And if that is the case currently, which one do I choose?

I’m still planning on applying for the private school position, but I hope to have a decent idea of whether or not I actually want to get it before I do. I need to do a lot more research on what pulling out of STRS means at this point, and what it looks like if I pull out for a few years and then start vesting again. (For those of you who are curious about how California’s teacher retirement system works, this is a great summary.)

Blerg. Being an adult is sooooo overrated.

Which retirement camp do you fall into?

15 Comments

  1. My finances are a mess, so take this with a grain of salt. But I generally feel that as long as I’m putting *something* away, it’s okay. I know I’m not putting as much as I should, and I’ve had to take some money out. But life happens, and you do your best.

    In your case, it seems like you’re being asked to choose between two extremes. Yes, you’d be giving up a lot of money if you left your current job. But having to stay in that job forever seems like a big sacrifice, too.

  2. I fall into the “I’m just not going to think about it” camp. Since I started my first job out of college my parents have made me put money into a retirement account. It started out being such a small amount that it was basically a joke. And then I didn’t put anything in while I was in law school. Since graduating law school I have had the same job where I put 5% of my salary in (my company matches that amount) every year (my husband does the same at his job). Otherwise, we don’t think about it. I am not even 40 yet so I feel like retirement is so far away at this point anyway….

  3. Definitely in the plan and prepare group. Although I have to say the first few years of my career I was in the don’t worry about it camp. But since I was about 30-31 I’ve been putting the max into my 457 with the exception of a couple years when I took a pay cut. Plus I have Pers–21 year so far.

    This again comes back to how you’re raised and maybe how your family financials are. My family wasn’t rich and there was nothing to inherit. My husband’s father died fairly young at 60 and his mother gave everything to his sister-long story. So nothing there either expected. So there’s no vague thinking things will be ok even if we don’t save much. There’s no fallback for us. All that plus years of reading articles about how it’s so important to save has inspired us to do so. And I’ve had to be very vigilant with my savings because my husband has had jobs where there wasn’t a 401(k) or he has had wait a year or something. Plus he’s a few years older and started later. Community property, so I’m saving for both.

  4. I think your friend is…deluded. sorry. But being 50 and not having saved anything for retirement? Does she know how hard it can be to find a new job at that age? Ageism is REAL in the workforce, so unless you are GUARANTEED that you will have a job forever, I just cannot imagine not freaking out in this situation.
    I think you will be OK either way because you are really young and even if you lose out on some of retirement savings that you’ve put in so far to the public system (assuming, worst case, that you lose 100% of what you’ve put in, which seems unlikely) you still have many years to build up retirement savings at the new job. You just need to talk to someone who knows what they are talking about to know the truth about would you would be losing.
    So I definitely think you need to plan for retirement, but not to the exclusion of happiness/satisfaction now. I would NOT let a few thousand dollars of retirement savings stop me from changing jobs. I would also NOT go 30 years working and never save a dime assuming it will “work out”.

  5. I’ve been through 3 rounds of layoffs where people of retirement where targeted. Some were financially sound but a few, being 50+, were not. All that made me realize, I’m not saving enough for retirement and it scares me. I fall into the blurred lines of, I think we have our money invested enough but not really sure if it’ll pan out in 30+ years (fingers crossed).
    Overall, if you’re happy where you currently are and you’re still able to save for retirement (and hope ClusterFest 2016 blows over at your school) then maybe the private school position/decision won’t stress you out as much if you don’t HAVE to take it. I’m all in for, whatever makes YOU happy (and no regrets), then so be it.
    And yes, being an adult bites the big one.

  6. Middle of the roader not one choice or the other.
    Talk to Social Security and KNOW EXACTLY how the two systems interact. Then remember NO pension plan is totally guaranteed completely. Nope nope nada.
    Look also at the employment realities about being older and female and having to find a new job……. Remember women are currently not earning dollar for dollar what men earn AND women’s employability is damaged way way earlier by age than men’s.
    Consider the personal implication of some major political pressure to fundamentally change how schools are operated and who is employeed and how tenure works and what losing those safety nets could mean. There are VERY major pressures to continue to increase both schools and prisons as ‘for profit’ corporations with equivalent salary structures operating under a trickle down idea that perhaps are not trickling very far.
    Find a path doesn’t complete give you ulcers.
    VOTE!!!!!!!!! And be sure every like-minded person you know also VOTES!!!!

    1. To add to that: there is case pending in the California court of appeal re: teacher tenure laws. As I’m sure you’re aware, a superior court (not binding on other courts, but still) threw them out.

  7. Have you ever considered talking with a financial planner to help guide you through some of your questions and concerns? Their advice might be able to provide some peace of mind – or give you some tips, relevant to your specific familial situation, to start you down a good path.

    1. We did the Dave Ramsey class and it included meeting with a financial planner and it was invaluable (the financial planner part, I’m only 40% on board with the method). I think it was pretty cheap anyway. My credit union offers a meeting with a financial planner as a benefit too.

  8. Another timely post in my life! I had to pick pension or defined contribution this month at my new job. I chose DC because I have a mistrust of pensions and I didn’t want to feel locked into a situation like yours where I felt like it would feel frivolous, i guess, to leave? I wouldn’t leave in your situation if you were on the verge of some milestone (not sure how yours works) but I wouldn’t stay forever just for retirement either.
    I’m a decent saver for retirement. I should have more but the amount I have isn’t minimal either. My relative who may or may not be living with us in the near future (ahem) has less than I do in savings. She’s 64. She’ll getting a pension too but yikes. She keeps saying no one ever told her to save when she was young like we were told. I don’t buy that. Maybe not in her youth but since then? Yeah.

  9. What happens if you leave STRS? Can you withdraw your money and roll it over to an IRA or equivalent? How much of your own contribution would you get and would you get any ‘equivalent to matching funds’? You need to know the facts.

    1. No. I don’t have an account with them. It’s a traditional pension. I pay in to support it now and later (after a certain number of years) I get to draw a certain amount per month. But there is no amount of money in STRS that exists as mine, it’s just that if I’m only vested for 12 years I get way less than say, half of what I’d get at 25 years, if that makes sense. The longer you work the bigger the percentage of your final salary you make in retirement. So if I work for 30 years I would make around $4K a month, but if I leave now (and never vest in it again), I’d make closer to $1k. Does that make sense?

  10. I’m in the camp of preparing which comes as no shock. lol. I’ve had IRA’s since I was a teenager. When I worked for an employer that offered a 401k I always put in the full amount. My husband and I would like to retire “early” and are making plans so we’ll be able to retire at least at a reasonable age. And, much more goes to retirement in about 5 years when our house is paid off.

  11. Oh, this is a tough one. My husband was made redundant in his early-mid 50s, and I’m struggling to find a job in my early 50s, so retirement savings have stopped over the last year or two. We’ve both moved around in work terms, and so haven’t come out of it with a healthy retirement fund, unlike a few of our friends and relations who have spent their entire careers with one organisation. They have a real advantage, and I envy them. But you know, I don’t know if I’d have done anything different now, because I left my job with the government in the 90s because it was emotionally healthy and necessary for me to do so, and important for our relationship at the time. And then I’ve spent the last ten years self-employed and earning much much less. It has made retirement saving harder.

    I have a post brewing about how I feel cheated. We were taught about the miracle of compounding interest, and that we should save, and pay off our mortgage asap (there is no tax advantage for us not to do so), and we’ve done that. But although our first mortgage was at 16% interest (yes, that’s right), we’re now finding that our savings and the low low interest rates on them now are being outpaced by inflation. The emphasis here in NZ seems to be on making home ownership as affordable for young people as possible has kept interest rates so low that the elderly and middle-aged who are trying to save for retirement are … well … screwed.

    We have chosen to travel and spend money on that. When I think about how much money we would have saved, I cringe a little. (Though it wouldn’t have made a huge difference to our savings situation). But we have had some amazing experiences, and haven’t enjoyed the last twenty years. I’ve seen people work hard and retire at 60, only to die before they were 70, and not get to have almost any of their travel and adventure experiences they spent their entire working lives anticipating. That, I think, is sad.

  12. Neither of us work at a job that provides 401k, etc. for retirement, so we just have a ROTH IRA that I’ve contributed a small amount to since I was 15 – maybe $30k in there now. Honestly, we don’t do more because it’s more important (to us) to invest in my husband’s company because it has the potential to grow and create MUCH more income for us than the return we would get on saving for retirement now.

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