The printout came off our old inkjet a little crooked, and I almost reprinted it before I realized I was stalling. Twenty-four years of work, and it fit on two pages.
Last month Greg and I put our retirement numbers on a legal pad for the first time. The one blank on that page was my pension. I've been a member of SERS, the School Employees Retirement System of Ohio, since I started in the front office in 2001. It covers the people in Ohio schools who aren't teachers: secretaries, bus drivers, cooks, custodians, aides. Teachers have their own system.
I logged into my member account, requested a benefit estimate and finally read the whole thing at the kitchen table with a highlighter. My last day at work is June 6, two weeks from now, so this felt overdue.
The numbers on the page
The estimate is built on two things: my years of service and my final average salary, which is an average of my highest-paid years. Mine came out to about $37,800. School secretaries do not get rich, in case you were wondering.
My estimate showed roughly:
- At 62, the earliest I can draw with my service: about $1,140 a month
- At 67, the unreduced age for me: about $1,660 a month
Those are before taxes and before anything taken out for health care. The gap between them is the part I had to read three times. Taking it at 62 means a reduced benefit, and the reduction is permanent. It doesn't go away when I reach 67. It's a smaller check for life.
The rules have changed over the years, and people who were hired long ago sometimes had different ages and service requirements. If I had 30 years of service, my options would look different. I have 24, and six more years at a front desk with my knees was not going to happen. I made peace with that before I printed anything.
Why I'm not drawing it yet
When I tell people I'm leaving, about half of them ask if I'm "starting my pension." No. I'm 55, so I can't draw it yet anyway, and even when I can, waiting has both a cost and a payoff.
My service is frozen, not gone. I stop earning new service when I leave, but the credit I have stays in the system as long as I leave my contributions there. The paperwork is clear that if I took a refund of my contributions, I would give up that service and the future pension along with it. A refund looks tempting as a lump of cash. For us it would be a bad trade, so that option is off the table.
Greg is working until about 64. As long as his paycheck covers the house, my pension can sit. Each year I wait between 62 and 67 makes the check bigger. We haven't picked an age, and we're not going to pick one this year.
The difference is about $520 a month. Over a long retirement that adds up to a lot. On the other hand, nobody promises me a long retirement. My mother is 79 and sharp as a tack. My dad was gone at 71. I don't know which side of the family I take after, and neither does anyone else.
So for now the plan is simple. The pension is the thing we don't touch, the same way we don't touch Greg's 401(k). Both get to sit while his paycheck and my future part-time work carry the house.
What I wrote in the margins
A few questions I plan to ask SERS directly, rather than guess at:
What would retiree health care through the system look like for someone with my years, and what would it cost? I know it's separate from the pension and isn't guaranteed. I'm not counting on it, but I want to know before Greg retires.
Is there any service I could still purchase, like the year I worked as a substitute aide before I was hired full time? Sometimes that's possible and sometimes it isn't worth the price. I just want the real answer from the people who know.
How does the pension fit with Social Security? School employees in Ohio generally don't pay into Social Security on those wages, so my own Social Security record is thin. That's a whole other statement and a whole other post.
I'm not a financial planner, and I read this the same way you would, slowly and with a highlighter. If you have a pension estimate sitting in a drawer, take it out and read it. It took me forty-five minutes. I wish I'd done it ten years ago, back when a few more years of service might still have been on the table.
Greg's only comment, reading over my shoulder: "So you get paid for answering phones for twenty-four years." Yes, Greg. Eventually.
