by Jory Segal
Thinking about retirement is not a priority for new faculty members. We were all excited to start a new position, and there are so many things to process that retirement issues usually move to the bottom of the list.
Putting off learning about how to best position yourself for retirement, is not a good idea. Understanding your options and making informed decisions for your future will hopefully allow you to become financially secure in retirement. My brief overview is just an introduction to your options for retirement as a faculty member at WVMFT. It is very important for adjunct faculty to study their retirement options.
Full-time faculty are automatically placed into a defined benefit traditional pension plan with Cal Strs. Adjunct faculty have a choice of a defined benefit, Cal Strs, or a defined contribution plan with Apple. BOTH full-time AND adjunct faculty can choose to contribute additional funds to employee only, defined contribution plans for educators, known as 403B’s or 457’s. (These are similar to employee only contribution plans in the private sector, known as 401k’s.)
TYPES OF WORKPLACE RETIREMENT PLANS:
Defined Contribution (403B or 457)
Most retirement plans, (except ROTH IRA’s & 403B’s), are “tax deferred”. Contributions to the plans are NOT taxed. Withdrawals are taxed. Early withdrawals may incur a tax penalty.
TRADITIONAL PENSION (CalSTRS)
SJECCD uses the CalSTRS defined benefit plan.
CalSTRS offers a defined benefit plan that is mandatory for full-time faculty in California. It is optional for part-time faculty. There is a “vesting requirement” that is five years of full-time equivalent employment. The benefit, (pension), is defined by a formula that is usually based on years of service, retirement age, and final or the average of 3 consecutive years of the highest salary