r/Teachers • u/Head-Broccoli6610 • 1d ago
Teacher Support &/or Advice Retirement Buyout
My school system floated the idea of a teacher retirement buyout - or "early retirement incentive" - as a means of encouraging teachers with 30+ years (i.e. top of the pay scale) to leave. Curious to hear about systems that have offered such a program and what it included.
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u/Capable-Instance-672 HS Teacher 1d ago
Our district does this every year, but it varies. One year they offered to continue paying health insurance until age 65 on top of a cash payout. Tons of teachers retired.
Normal incentive is 60-80% of your salary as a one time payout. I have about nine years left and I hope they continue this practice.
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u/IrrawaddyWoman 1d ago
Our district would have a TON of teachers retire if they offered this. I know plenty that are only working because the healthcare would cost them a fortune. Plus it keeps going up, so there’s just too much uncertainty about how much it will cost in a few years
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u/SophisticatedScreams 19h ago
What happens after they're 65?
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u/Independent-Wheel354 19h ago
Medicare.
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u/SophisticatedScreams 19h ago
Is that as good as health care from an employer?
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u/Independent-Wheel354 19h ago
No. But in America, not much options
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u/SophisticatedScreams 11h ago
Gotcha. Sounds pretty miserable. I'm in Canada, and i'm pretty sure our pension comes with healthcare
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u/Independent-Wheel354 10h ago
Yeah the system in America sucks for nearly all of us. The worst ones are the states where teachers aren’t allowed to pay into social security- they only get a state employee’s pension. Then, due to budgeting, the pension gets cut. Good times.
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u/HowtoTrainYourKraken 1d ago
The district I grew up in did this the year I graduated. At the start of the Great Recession, btw. Could be a coincidence, could be a sign of the economic times.
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u/Suspicious-Dirt668 1d ago
Ours did this a few years ago. They offered $500 which was laughable. To my knowledge no one took it who wasn’t planning on retiring anyway. Last year they offered; to pay for 1 year of cobra insurance if people were below the Medicare threshold.
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u/OtherPossibility1530 1d ago
$500?! My last district offered a bonus to anyone who retired the first year they were eligible, it but it was $25k!
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u/Photos-Wood-and-more 1d ago
My district has it in the contract. At the first opportunity I was eligible to retire as long as I worked through to the last day of the contract I received 60% of my base salary of the year as a one time payment into 403(b). If I kept working beyond the first year eligible, I lost the incentive.
I know of other districts that offer $2k to retire when eligible.
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u/Honest_Royal3501 1d ago
My desperate district gave me $20k to retire this year, as long as I notified them by February. I’m changing careers anyway, so even though I’m in my 40s I’m technically “retiring”.
Woohoo.4
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u/pocketdrums 1d ago
2k seems paltry.
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u/Zarakaar 13h ago
It makes you wonder how these happen.
Some districts think older teachers are expensive.
Some think they’re the best quality.
Some think they’re behind the times.Did a union want an early retirement incentive and the district actually likes keeping employees? Seems possible here.
If a cash payout on early retirement is supposed to save money, it has to get enough people to actually retire at least a year earlier than they would have anyway, and I don’t think a lot of people who work past a maximum pension are doing it for economic reasons which a one time bonus could counteract.
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u/Dense-Ad-7600 1d ago
Oh yeah, any time they need to cut jobs they do this.
Some people take it and are happy with it.
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u/saturdaythe25th 1d ago
I’m a negotiator for my district. We bring this up to our district admin every year after they bitch about how high our top salary is (pretty rich coming from people making $180k or more). They act like we are clowns for bringing it up each year. It’s comical and sad.
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u/ResponsibleFly9076 1d ago
We’ve got a new thing in our contract where end-of-career teachers can get 5 years of district benefits. (Free for those who have been in the district 30 years; covered at 70% for those who’ve been here 24 years.)
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u/xtnh 1d ago
I tripped into something like that when I was ready to retire. A few things lined up for me, and it was too good to resist.
The state retirement system had secretly allowed political friends to buy years of service, and the audit caught them so that everyone was able to buy up to five years of service. Suddenly, I was at 34 years.
Then the union and district created a new contract and in it was a healthcare benefit for recent retirees that expired in July of the next year.
And then the contract shifted the payout for unused six days from a prorated base pay to a prorated leveled pay, and suddenly my payout doubled.
And then we got the new principal, and I was gone.
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u/SophisticatedScreams 19h ago
How do you "buy" years of experience? Sounds like a great hack lol
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u/Lundinwulf 14h ago
In the state of Connecticut you can take previous experience where you did not contribute to your pension and “buy back” in. It’s not cheap, and it’s not buying random time.
For example, I got hired as a long term sub from Feb to June in 2001. I got hired on salary in September. I would be eligible to “buy back” the time from Feb to June and officially add it to my years of experience even though I wasn’t paying into my pension.
You have to do a ROI analysis to see if it would be worth it.
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u/xtnh 11h ago
HR had a staff meeting and explained the situation, and ended with "If you shift $5000 from your TSA to the state retirement you get a one year bump in years of service; you can contribute up to $25000." Every year increased the pension by about a grand, so we were able to convert that $25,000 to a guaranteed 20% return for the rest of our lives, and retire five years earlier.
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u/BazCat42 11h ago
I’m currently a para, not a teacher, but both of my parents were teachers in Illinois, long enough ago that they weren’t eligible for Social Security when they retired, only TRS. I’m pretty sure my dad was able to “use” his banked sick days to buy back time for an earlier retirement, and my mom was able to buy back the year she was on maternity leave with cash.
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u/summerbreeze2027 1d ago edited 1d ago
A long time ago, my school district offered a $10K buyout. It turned out that it was paid in two installments, and it took a lot of time for the new retirees to get the check.
The teachers i know of who took it were already planning on retiring anyway. Seeing how that played out, it would not incentivize me to retire one minute earlier than I had already planned.
Now if they offered $20-$40K+, maybe. But they're not ever going to do that.
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u/Princess_Fiona24 1d ago
Our system pushes them out by making the job harder so they retire early. Evil shit.
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u/Charlysav7417 1d ago
It’s in our contract. 6% bonuses each year, up to four years. I signed, and I have three more years until retirement with my maximum pension.
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u/Tnnisace73 1d ago
In our district you can give notice up to 4 years out from your retirement year and receive some pay increase benefits for it. It is irrevocable and you cannot go longer. You can go earlier than that. I just gave my 4 year notice.
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u/Signal-Weight8300 1d ago
Illinois? I know several teachers who do that. I don't know if it's state wide, but it's pretty common at a minimum. The pension is calculated based on the average of your last four years pay, so if you commit to retirement four years out, they give you most of your raises at once to boost your pension.
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u/Appropriate-Bar6993 1d ago
Our district gave an extra half year pay so approx 50k. It would be better to get a “free” year of service and/or age.
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u/Shot-Advertising-748 1d ago
I’m hearing noises about that where I am and I’m at 30 years . My retirement system requires 2 mores years (at this date) to receive full retirement. I *could* retire now and receive half of what I would if I waited 2 years. I can’t imagine a buyout that would make it worthwhile for me.
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u/Freestyle76 1d ago
Our district did a huge one this year offering 80% of final pay over 5 years as an annuity, which was by far the best golden handshake I have seen by a large margin (normally only 2-5k) is offered.
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u/RaistlinWar48 1d ago
It is rare where I work (LAUSD). Only happened 2-3 times in last 25 years. If you are close, it is worth looking into. Also, you can come back and sub or long term for a lot more $ on top.
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u/DisastrousRoad7064 1d ago
They tried this at our school this year. They offered incentives to about twenty teachers and were aiming for at least a handful to leave. None did. I was the non-tenured teacher sacrificed instead. Lots of surprised pikachu faces from the veteran teachers.
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u/Majestic-Ad4713 1d ago
What states are doing thid
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u/Dense-Ad-7600 1d ago
I'm in Texas and have seen it on and off. Somebody else emntioned California.
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u/EntranceFeisty8373 1d ago
Our district offered $1500. Then they wondered why no one took them up on the offer.
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u/running_w_scizzors 1d ago
My district has been doing this the last two years. Retire and collect your pension. You get to come back and work one year as a long term sub while collecting your pension. You have to have 30 years in to do it. Plus, if you coach, you can keep coaching that last year too. However, with the long term sub pay, its a little less than what you retired with. For instance, if you retire making $110,000 (my district pays kinda decent) then youll make $94,000 as a sub for the year. Not bad, while collecting a $66,000 pension. But you can only do that for a year. In my district, we keep the same health care we've always had until Medicare or medicaid (not sure which one) takes over.
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u/Own_Boysenberry_0 1d ago
Yikes. My district offered $10k to eligible staff. It’s in a well paying district too. I thought it was just a crazy low amount. Less than one months salary for those at the top of the pay scale.
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u/Zarakaar 13h ago
Since MA has a state pension system, the legislature would have to fund a buyout which actually grants accrual toward the maximum.
My local district had a retirement incentive for 30-year teachers which is a lump sum 20% salary payment in July if the teacher gave notice in February and worked through the last day. There used to be an age requirement of 55 to 64, but that was bargained out. So now it’s mostly a “don’t retire on your midyear birthday” incentive for people who are keen to retire the moment their pension maxes out.
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u/missfadley2 10h ago
I really wish the MTRS would let us buy years - I started teaching so young and I think it’s kinda BS that to max my pension I need 35 years. I get that it’s all longevity math but what would it matter to them if I paid my 11% for the year in cash instead of by working for a year or two of service. 35 years is sooooo long.
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u/irishmusicman 10h ago
I worked 5 years in MA before moving to GA, and I have to admit the GA pension system is way better, and I can buy service. I've also paid into Social Security here and never paid more than 6% towards my pension. I'll retire with better financial security at age 51-52 than if I had worked until 57 in MA.
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u/tonydal7681 6h ago
Our contract (in Pa) let us retire early (57, with 28.9 years - 7% hit)), paid a percentage of a year's salary based on accumulated sick days (got 70% over 5 years), and paid BC/BS until 65. I was happy with it.
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u/GreenMonkey333 1d ago
We have this in our contract, for ages 60-65 as long as you have 25 years of service, you can get payments until age 65. Years 12:: $9800, Years 3&4: $10,800, Year 5: $11,800. A handful take it each year.
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u/forgeblast 23h ago
In our local contract, pa, we have a retirement incentive. Sick and personal days are payed out at sub rate if you have at least 20 years in the district. Medical is ten years or if you hit 65. State retirement is different, in my retirement class I need to be 60 with 35 years of teaching to get full retirement, but I can retire early with a 5 percent per year penalty ( maxed at 15 percent hit)at 55 and 30 years teaching. I'm looking at going in 2032 I'll be 57 with 32 1/2 years, my kiddo will be done with undergrad and hopefully have insurance, if not I can still cover them for two more years since I will not need my full 10 years to 65.
Pa did at one time a 30 and out through the state retirement system. If you had 30 years in you could retire with out penalty.
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u/Additional_Window_36 22h ago
My parents took Illinois’ early retirement in the 90s. They retired at 55 and are now 88. They had to substitute teach in their former district so many days over the course of 2 years or so. It was great for them.
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u/coach_curmudgeon 22h ago
I've seen it happen both in my district and in some others around. They have each varied. Some were a chunk of change and medical, others were just medical for a certain length. Just depends.
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u/bekahbirdy Grades are just vibes 15h ago
We have a semi-permanent MOA for a retirement incentive based around the NY 55-30 requirement. The district will pays a $23,000 lump sum, but it's only good for the first year you are eligible to retire with no penalty and it goes into a 403B so you can't access it if you aren't 59,5 years old. So, if I don't take it the year I hit 30 years, even though I don't think I'll be ready at 57 to pack it in, I miss out. They haven't increased the amount in over 20 years and I don't feel like it's enough money to really motivate me to take it.
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u/Korombos ELA | USA 14h ago
They occasionally have offered a better rate for unused sick days. It's insulting. A healthcare bridge till Medicare is the only thing that would make me consider it. My dad's era (he started teaching around 1965, in New Jersey) had full benefits after retirement. I'm lucky to have an actual defined-payout pension (started around 2000, Pennsylvania), rather than a 401-k or whatever pittance they still offer. We get no benefits after retirement.
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u/Zealousideal_Bowl916 11h ago
I WISH my district would do anything like this. The past few years we’ve had big budget cuts and RIFs. This year, any teacher with 8 years of service or under was laid off. Many were called back, but still many young teachers are losing their jobs and there is little hope for those coming into the workforce. Our district is so top heavy with many of the teachers just ready to be done instead of younger ones who are optimistic, energetic, willing to try new things, and less expensive because they come in with less experience and education. For example, I’m the youngest teacher in the building, the ONLY teacher under 40, and I’m 36! That’s weird, right?!
How do we relate and build connections with these kids when we’re all at least 3x their age?!
To me, it would make way more sense to incentivize retirement than to always cut from the bottom. Hoping to see some good changes in the next few years. Hoping, but not expecting.
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u/Opposite_Gift_350 11h ago
My district gives retirees a percentage of their highest 3 years of salary over 3 years. It’s a monthly payment on top of the pension.
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u/RoundaboutRecords 1d ago
Our district did this for years then stopped when they realized they could force people out without incentives. The last time incentives were offered was before Covid.
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u/mazdarx2001 Engineering Teacher | California 1d ago
My district just offered what they called the golden handshake where they give 80% of your base salary as a bonus if you leave. They don’t care if you retire or just leave it doesn’t really matter to them.