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lancelotarnold

Pensions for Teachers

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Pensions for Teachers

Teachers of all grades, from kindergarten to law school and medical school, are a large group of American working professionals who usually are eligible to collect pensions after they retire. This mostly affects public school teachers who draw years of income through school systems that participate in county or state retirement systems. These pensions differ from state to state but are generally referred to as Public Employee Retirement Systems and Teachers Retirement Systems.

Some states automatically withhold a portion of a teacher’s paycheck and then contribute another portion to a retirement fund. In other states, teachers must work at least 10 years before they’re allowed to allocate pre-tax dollars to retirement plans. Teachers, school administrators, county and state admin, and executive staffers who work 25 to 30 years in a public school system gain the greatest benefit from these systems, which tend to reward same-school and same-system tenure.

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Changing schools, school districts and especially changing states can mean losing pension eligibility.

This is especially true for athletic coaches, some of whom tend to migrate from school to school and state to state over a long career. In some cases, the stringent requirements for attaining full pension benefits make private sector jobs more appealing. However, private-sector teaching jobs are more likely not to have DB pension plans. Instead, they offer DC pension options such as IRAs or 401(k)s.

While critics worry about the long-term sustainability of some state education pension systems, right now these payments are still a guaranteed benefit for educators. Teachers needing money from their pension savings can contact pension purchasers and sell payments in exchange for a cash advance.

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