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December 2001, Volume 12, Issue 2 - Should You Retire and Make More Money? |
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By Lantz Simpson
If you are a full-time faculty person, age 63 or older, with 30 or more years of service credit, you can retire, teach part-time, and make more money than you are making now. Let's take the 63+ years of age and 30 years service credit example and apply some calculations. If you are in Group 6 at Step 23, under the new contract you will make $82,906 this school year. (However, 8% of that, or $6,632, is skimmed off the top and sent to STRS, so a real taxable salary figure is $76,274.) To find out what your retirement income would be, we apply the following formula: 30 years service credit X 2.4 age allowance = 72. Then we take 72% of your highest compensation, and we get $59,692. You are also entitled to receive a $200 per month longevity bonus, adding another $2,400. $59,692 + $2,400=$62,092
If you teach three load factor 1.0 classes part-time the fall and spring semester, you will make $32,333. If you teach English or mathematics, you will also be paid for sixteen hours of office hours. If you are a counselor or librarian you can work eighteen hours per week at over $60 per hour and make even more than a classroom instructor. When we total your retirement ($62,092) and your part-time faculty salary ($32,333), we get $94,425--which is $18,151 more than your current taxable salary of $76,274.
Some faculty may be concerned about their medical benefits. If you qualify for Medicare, then the supplementary benefits plan for retirees under the collective bargaining agreement will give you excellent medical coverage. Under this plan, you would pay $581 per year out of your own pocket to maintain your PERSCare insurance. Subtract that from $18,151 and the real increase in your income after retiring and teaching part-time by maintaining your benefits will be $17,570.
The above example was for demonstration purposes. Your particular situation may be different. You should contact STRS at 800-228-5453 and ask to set up an appointment with a STRS counselor who can go over your personal service credit and income information.
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