Pension vs. higher salary job

[gagaermac]

I’m looking for some advice here. I’m a Special Education teacher by profession but currently working in an education adjacent role, finishing a different certification. I’ll be finished in May 2025. I’m considering going back to the classroom and working the new role part time. It can be done full or part time and I can make the schedule. I’d be able to make $75 an hour (fee for service) or $85,000 salary. It’s in a behavioral health field. I need 6 more years to be vested in the teacher retirement system and I’d be eligible for a partial pension. If I go back into the classroom I’ll be making 66K and in 6 years, I’d be at a higher step and making 83k. In 10 years I’d be at 94k. As a teacher, I’d have a pension, social security, 457(optional) good healthcare and other benefits. The behavioral health job doesn’t have a retirement plan or benefit package that can compete with the school districts plan. However, the salary is higher. The salary caps at around 100k. I could always pick up a part time job too If I wanted. My current employer will be extending an offer to me when I finish the program. The 401k match is 25% of what the employee contributes up to 6%. I feel like this match isn’t a lot. The pension formula is years of service x 2% x highest 2 years average salary .
30 years in the pension and you get 60% of your gross. However, I know I won’t make it 30 years. I’d get $1400 a month in a partial pension if I go back for 6 years. Does it seem worth it?

I’m contemplating:
1) go back to the classroom for 6 years and get eligible for a partial pension and work the behavioral health job part time. I’d do behavioral health as my full-time after that.

2) stay at my current employer and take the 85k offer ( can work a part time if I wanted to make a little more)

 

[randomallocation1]

@gagaermac Probably not. Pensions usually provide the best value for “lifers” and “late joiners”.

Vesting and not collecting for a few decades will greatly reduce the pension in real purchasing power (after inflation).

I’d take the new job and keep looking for a better opportunity. Climbing via promotions will be much better than working the district job.

 

[waitsedma]

@gagaermac I'm a teacher. There are other things to consider than what you mentioned.

1. Job security. Your current employer can fire you on a whim. Assuming you don't live in shitty southern, conservative state that has gutted unions (FL, NC, TN, etc), your teaching job is much, much more stable and secure through tenure. The stronger the union, the more protections you have. You said your starting salary is $66k, so it seems you're in a decent state.
2. Time off. Assuming your current employer has standard work hours, that's 9-5 M-F with maybe 2-3 weeks paid vacation per year with a few random Federal holidays sprinkled here and there? Maybe even less than that? Teachers get winter and spring breaks, every holiday, and two months off in the summer. That usually adds up to 12-13 weeks of paid vacation per year. There's also the length of the workday to consider. My typical day as a teacher is 8:20 - 2:40. I might go in or stay after 30 min extra to grade or plan every now and then, but that's still less than a 7 hour work day, compared to the typical 8 hour work day most jobs have.
3. Additional Income. I seriously doubt that, after doing an 8 hour day, M-F at your current job, you have the time or energy to go do much other part-time work. Because teachers have more time off than regular jobs, this means you have more time to make extra money, especially in summer. In my district, for example, there are regular after school activities and there's summers school, both of which pay $57 per hour. I also know tons of teachers that bartend, lifeguard, tutor, or do other summer work to supplement their income. These supplements aren't small either. You can easily pull another $10k bartending or lifeguarding over summer alone.
4. Retirement. You've already established that the pension is far better than the 401k your current employer will offer at some time in the future. The longer you stay in as a teacher, the better your pension will be. You say you'd only do six years, but how do you know that you'll feel the same way six years in the future? Teaching is an interesting career in that the first 2-3 years are really hard, but once you've figured out your curriculum and you've got a system in place, it gets much, much easier around years 3-4. By year 6, you don't have to plan anymore and the workload gets cut in half. I know lots of teachers who originally had plans like you, just do the minimum years to get the minimum pension and then bounce, but they're still here 10-12 later making six figures with free health insurance and a rapidly increasing pension.

 

[dee007]

@gagaermac My wife retired last year from 30 years of teaching in Washington state. Her collecting a state pension, Social Security and her 457 has put her in a very good financial position. I work in private practice healthcare and have never had a pension. My upcoming retirement next year lives and dies by the stock market. I would think long and hard about returning to the classroom for at least the minimum time period to qualify for a partial pension, and any time above that will only increase the pension.

 

[bradleyhiggins]

@gagaermac Pension!!!!!!! Get it locked in.

 

[gowdy]

@gagaermac Pension plus it comes with job security

 

[amcruz]

@gagaermac I always would take the stability of a pension any day. My spouse works at a private sector job and makes 3 times more than me. If i know the private job was secured and that I would be there for over 20 years than I would take the private sector job with the much higher salary but as always i don't have a crystal ball into the future so I did whats safe for me and my family.