One Appointment Saved me $90K

I’ve been planning my optional early retirement for quite some time, and I’ve taken a bunch of different steps to get to where I am today—one year out.

I figured out how much money I’d need, learned about how the retirement system works, and talked about why I want to retire in therapy. Heck, one of my main goals in creating this blog was to think through early retirement.

Most recently, I went to my second appointment with my retirement system. In last year’s appointment, I got confirmation that the earliest I can retire is in 2025. I learned that my year of sick time not only counts as service credit but can be my 30^th year. (I was worried it’d only count to increase my pay and not towards the 30 years). I also learned a bit about the health insurance plan connected to my retirement.

Insurance through my retirement system is around $500 a month. My pension should be around 3900 a month, and 500 out of that is a pretty big chunk. My financial planner suggested I work after retiring early from my full-time job and strive to make about 10K a year. More than half of that, about 6K would go towards my health insurance. The large cost of health insurance, though, wasn’t a deal breaker. I still wanted to see if I could leave full-time work.

Learning about the cost of my insurance was the easy part though. Health insurance for my husband is another story. My current employer pays for 45% of my husband’s health insurance. In retirement, my health insurance would carry him, but he’d be paying for the whole premium. Now, he pays about $400 a month, but when I retire, he was going to have to pay about $1400 a month unless we find an alternative.

For last year’s appointment, I had met with a woman named Terry. I liked her, but for this summer’s counseling appointment, I was assigned to meet with someone different—Marlee—and rather than push to see Terry again, I just went with it.

Marlee and I went over all the information I got last year, and I was simply there to confirm what I knew about how retirement would work. We were talking about how retiring at the first possible date would not be as financially advantageous as working longer. More specifically, I’ll get 66% of the average of my 4 highest years’ salary, but if I stay longer, it increases about 2% a year (at least the first few “extra” years—I didn’t look beyond that) until the max which is 80% of my highest 4 years.

I told Marlee that I know I could get a larger pension if I worked longer. I know that financially, leaving next year is not the best decision, but when considering my mental and physical health, retiring next year would be a great choice.

She understood that and we started looking at the health insurance options. I had been looking into the differences between the community college insurance plan and the university insurance plan because my financial planner thought I would get my insurance for free. She has worked with more university teachers than community college teachers, though, so she was mistaken.

Marlee looked more closely at my account and said that she thought I had 4 years of service at the university. (I worked at the university in town as an undergrad, grad student and as a secretary.) Now, if I had 5 years of service at the university, I could get the healthcare for free ($5 a month for me instead of $500 and around $300 a month for my husband instead of 1400). We talked about all these different options for how I could earn that service credit.

Basically, I could work for my current employer this year, not retire, but then leave my college and work for the university. I could work ½ time or ¼ time for a year and still get earn the last year she thought I needed to get the insurance for free. Though I don’t really want to work another year, saving what I would have paid for insurance ($6K year) for the amount of time I have until I am 65 years old (15 years) is worth it. Basically, I could save $90 over 15 years!

I left feeling a little unsure, a little excited, and I decided I wouldn’t try to force anything. I’d see if an opportunity at the university came up not this year but the next and go from there. I had been trying to get away from my really challenging situation by retiring; the last thing I want to do is jump into something I do not enjoy just for the money, even if it is 6K a year.

Marlee told me she thought I had 4 years of service at the university, but she wanted to be 100% sure, so was going to confirm the information and get back to me.

After the appointment, I waited and waited. I was anxious to know exactly how much service time I had at the university. I waited until just under a week and called the retirement system. I was on hold for over an hour, (“there are 22 people before you in the cue . . .”), and when I got through, I learned Marlee was still looking into things.

During this week, though, I looked at my retirement account, and one page seemed to show I had 3.5 years at the university, and if another page seemed to show I had more than 6 years. I decided I wanted to go with the page that said I had 6 years, but, of course, that wasn’t up to me. I couldn’t stop thinking though, “what if I already have 5 years?!”

I’ve talked with 2 groups of friends about the appointment and before I can finish the story, they are suggesting what kind of work I could do at the university. They reminded me that I wouldn’t have to teach. I could work part time and on and on. It was fun seeing their excitement for me.

The punchline though . . . I get a call from Marlee the next day. She told me I already have 5 years into the university retirement system, and I will get the cheaper insurance!

I was ecstatic. That info has made my week. I am so, so excited to be able to let go of the worry of having to pay 500 a month for me and 1400 a month for my husband. In short, that appointment saved me 90K, and that is not counting what we will save with my husband’s insurance which would be much more.

I thanked Marlee profusely and told her how grateful I was that she had spotted that option. Marlee let me know she was concerned that no one had caught that I had that university service earlier. She knew I had an appointment with Terry the prior year, had attended a seminar the previous year, and had been in communication with the retirement system for a year before that.

Marlee told me the retirement system is going to use my info as a case study to improve training. She was the only person in between me and being able to use that amazing benefit, and really, even if it’s rare that college retirees also have service time at the university, the counselors need to be able to spot that option.

I’ve been really grateful this week. I’m grateful for Marlee of course, but also for those who came before me who set up the retirement system as it is and the health insurance benefit as it is. Someone somewhere lobbied for community college teachers to be able to get credit for working at the university, and I am grateful for that person.

Peace Out (and In),

Julie

(Pictures are of my screened porch.)