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The Two Most Important Decisions You’ll Make As A Teacher In Oregon

As a teacher in Oregon, the two most significant decisions you will ever make regarding your retirement are:

  1. What option am I going to choose for my State pension?
  2. What or how am I going to draw my social security?

Social Security And Your Pension

Why are these the most significant decisions? Because most of the money you have saved in your lifetime is in these two pensions. Think about it. As a teacher in Oregon, almost every educator has contributed 7.5% of every dollar they have ever made to the social security system. Think about that if you started your career making 40k a year and got nominal cost of living increases throughout your working life you would have contributed 136k to the social security system, and your employer would have matched it so a total of 272k would have been contributed to the system, not including interest.

Public Employee’s Retirement System

The same goes for your public employee’s retirement system. On average, 6% of your salary was contributed to the system by either you or your employer, and that has been matched by your employer as well. Looking at the pension, you have between 500k and one million dollars you need to decide about.

Between Social security and your pension, you are deciding how to spend or design your retirement with approximately 750k to over a million dollars with the two decisions of how to claim your pension and social security.

The last thing anyone would want to do is just to choose an option. I have found that when this decision can be personalized to each individual or couple’s retirement goals, the outcomes are typically better for each retiree.

A Million Dollar Decision

When was the last time you decided what to do with over one million dollars? For most people, the answer is never. On top of the magnitude of the decision, it can be very clouded by not knowing the intricacies of each pension and social security system. For example, did you know if you were married for ten years and got a divorce and are still single, you can decide to claim off of your ex-spouse’s social security numbers rather than just your own?

Also, did you know your benefit from social security raises at an 8% increase every year from age 62 to 70 if you don’t draw it out? That is a guaranteed rate of return from the federal government of 8% if you defer drawing your social security. Today interest rates are well below 8% a year.

What Happens If You Pass Away Before Your Spouse?

The other issue with these two pensions is will they continue to your spouse after you pass away. Social security may pass on, but if it does, your spouse will have to give up their social security check to claim yours. With the public pension, some options will continue to your spouse, and some will not.

We’ve seen many people just claim an option without really thinking about the impact that decision will have on the rest of your life.

We are very knowledgeable in the Social Security System and your teacher’s retirement system. Making the right choice is of the utmost importance to us because it is of the utmost importance to you. If you feel like getting a greater understanding of your social security choice and your pension options would be helpful, we provide free counseling on these two topics, because we know how important it is to you.

The opinions expressed herein are those of the firm and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of author, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of the date indicated.

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