Broker Check

"I'm a Teacher & I'm Approaching Retirement. How Do I Know If I'm Ready to Retire?"

June 19, 2023

As a teacher nearing retirement, you may find myself pondering an important question,
“Am I truly ready to retire?” It’s something many CalSTRS members wrestle with so don’t
feel like you are alone! While this decision is personal and depends on individual
circumstances, here are some key points to consider when evaluating your readiness for

1. Assess your current assets:

● Review your retirement accounts, such as your 403b. Dig into if the
amount you have saved can supplement & sustain you through retirement.

● Ensure that your portfolio is properly invested for your goals & timeline.
You would not believe how many prospective clients I meet with and their
investment allocation is not in line with their risk tolerance or long term

2. Asses your projected income sources:

● For some, this may be as simple as one source - their CalSTRS benefit.

● For others it may be multiple, including their CalSTRS benefit, their own
social security benefit, spousal social security benefits, rental real estate
or part time employment.

● Make sure you get an estimate of what your CalSTRS benefit will be at
different ages that you are considering retiring at.

3. Estimate your retirement expenses:

● Develop a budget that includes all anticipated recurring expenses during
retirement, such as housing, healthcare, insurance, transportation, and
leisure activities.

● We encourage our clients to break down their budget into two main
categories - essential & discretionary. Essential would include housing,
groceries, fuel, utilities, etc. whereas discretion will range from your
favorite streaming service to your annual vacation.

● Account for potential inflation estimating your expenses. This has become
very real for people over the past few years!

● Consider any outstanding debts and create a plan to pay them off before
retirement, if possible.

4. Understand your healthcare coverage:

● Investigate healthcare options available to retirees, such as Medicare or
private insurance, and understand their costs and coverage.

● Explore any retirement benefits related to healthcare provided by your
employer or union. Like my own mother, many districts offer medical
coverage till age 65 when they will switch over to Medicare.

5. Plan for unexpected expenses:

● Set aside an emergency fund to cover unexpected costs or emergencies
during retirement.

● Consider options for long-term care to protect yourself against potential
healthcare expenses not covered by Medicare.

6. Consider the timing of retirement:

● Evaluate the impact of retiring earlier or later than the traditional
retirement age on your Social Security benefits and pension.

● Assess the potential advantages or disadvantages of phasing into
retirement by working part-time or transitioning into a different role.

7. Put it all together

● Now that you have some puzzle pieces, begin to put them together.

● Be sure to consider the tax implications of different income scenarios and
withdrawals from retirement accounts

● Have a Roth conversion strategy for pre-tax funds - don’t just have a tax
preparer, have a tax planner

● Have a strategy as to when you will turn on Social Security to maximize a
potential benefit

● Ensure your investments line up with your goals

● It will likely make sense to seek professional advice. This is complicated
and takes a large amount of time, effort & skill even for professionals to
put together a comprehensive plan. Don’t feel you need to do it on your

Remember, financial planning is a critical aspect of retirement readiness. You only get
one shot at retirement so you want to ensure you have the best plan in place to move
forward. Take the time to carefully evaluate your financial situation, consider
professional advice, and make informed decisions that align with your long-term goals.
But above all, enjoy your retirement! Both my mother & wife are teachers, so while I may
not be in the classroom myself, I see the energy & effort you all put into your students &
know that if anyone deserves a happy & fruitful retirement, it’s you!