As you approach the golden gates of retirement, it’s time to unlock the secrets of your pension formula. The following 3 variables are the key to your financial pot of gold. 🌈🎉

1) Pension Factor ✅

This is the magic number based on your years of dedicated service in the retirement system. For our cherished Tier IV members, the goal is clear: you want to clock in at least 20 years of service to reach that coveted 40% pension factor. (That’s 20 years multiplied by 2% per year of service!) However, beware the pension factor pitfall! If you have less than 20 years, it falls to a less exciting 1.67% per year. Ouch! 🕰️

2) Age Factor 🎂

Think of this as the birthday candle that should always be burning brightly. Ideally, you want it to equal 1, which means no age-related penalties. The sweet spot here is 30 years of service and at least age 55. If you’re Tier IV and your service years are below 30, brace yourself for a fraction in the age factor, and a significant reduction in your pension payout. But don’t worry; there are strategies to overcome this challenge! 🕯️

3) F.A.S. (Final Average Salary) 📈

This is where your financial prowess truly shines. Your F.A.S. is calculated from your three best consecutive years. These years can include home teaching, class coverages, coaching, and other teacher or administrative duties. But here’s the kicker: it can’t include certain extras like health insurance buybacks, employer contributions to your 403b, or payouts for unused sick days. Furthermore, your F.A.S. calculation is capped at 10% of the average of your two previous years. In simpler terms, if you’re expecting a significant income increase, aim to secure it during your last five years to avoid that pesky 10% cap. 💡💼

Now, here’s your chance to take action:

As you near the final stretch of your teaching journey and the prospect of a relaxing retirement, make sure to schedule a personalized consultation with me. Together, we’ll craft a strategy that optimizes these factors to maximize your retirement income. In order for me to do this you will need to be a client of mine. In order to do that I will have to manage your 403b. Transferring that over to me to manage is easy because I do all the work – I do it all the time. I will probably even save you $$ on fees and commissions.

Don’t wait until the last minute! The sooner we start planning, the brighter your financial future will shine. 🌟🚀