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A Pension: Who needs it? What might it look like?
Ask a teacher who is 25, 35 and 60, and you will probably get quite different responses. Understandably the 25 year old will find it hard to imagine a life beyond forty; particularly if he hasn’t considered marriage or children. At 35 the teacher may be up to her eyeballs in mortgage payments and raising children so that a six percent pension deduction seems huge and the board’s corresponding percentage makes twelve percent seem like an exaggerated tithe. At sixty, with the final child out of the house and graduated from university, a mildly-self-righteous teacher can claim a wonderful bonus: a pension for life or what a RIFF can generate.
I am that sixty year old who once was 25 and 35. I know what you are talking about. I “never” thought I would be 60 and I “never” thought my five children would ever grow up. There are certain stages in life when the “end” seems so distant, elusive and irrelevant. We do get older and we do get to a point when we are better out of the class than in the class.
Let’s get a few things into perspective. Let’s go to our teacher Jesus. He had no “freedom 55” philosophy. His take was that we are here to bring in the Kingdom of God. It could start right then with him and his idea was that it continues with us. Teachers figured prominently in his perspective on the future. So, for those of you who think pensions are for funding sunny environments, lounging with carousing friends and spending time engaged in frivolous pursuits, this is not what this is about. Christian school teachers are not generally the “freedom 55” crowd. Our pensions are geared towards helping us transition into our senior years so that we are able to support ourselves in service opportunities. Jesus “way” looks radically different from what today’s marketers of retirement opportunity have to say.
Jesus also reminds us that we are not to worry about the future. Take each day and live it. Don’t store up for yourselves vast sums of wealth. So, when we consider the matter of retirement income, remember not to get over inflated with confidence in “investments.” I cannot believe how many people have been ripped of by promises of unreal returns or frustrated by the financial markets.
Pensions are actually a rather recent addition to modern life. When pensions did appear, seventy was the year an employee was considered old. My grandfather, a mailman, retired with a small pension at seventy. In my lifetime sixty-five became the new “old” and in the eighties pressure mounted to push the age down to 60 and then down to 55. Many public school teachers today can retire by 55 if they meet the “formula.” Our CSI plan has agreed that it recognizes the “new” 55, although it comes at a cost of a five percent reduction for each year under 60.
Is work that debilitating that we need to plan to leave it by 55? I always have to smile when I speak with those who retire early. They are often surprised to find that having a job is not so bad and that ‘freedom 55” can be down-right boring if there is no meaningful vocation. So, another reality check to consider is that we were created to work, to serve. One day off a week for a Sabbath rest makes sense. However work, particularly teaching, is not debilitating! Its challenges may stress us with greater intensity as we age; but then a creative career change may be the way to go or a less intensive work day may be prudent. Teachers do not have to work a one hundred percent schedule, they can job share. So a Pension mentality can actually tempt us into a false sense of meaningful existence.
Are we actually going to live longer? Apparently the statistics say we are. I have already outlived my father’s years by nine months. However, I can name on my fingers, both hands, the names of those who died and never made it to 55. I am talking about teachers. Some die before their retirement. Every year there seem to be a teacher or two who passes away. But the reality is, as a group, teachers are living longer.
Planning for your future: A possible strategy.
- The CSI Pension plan is an excellent option for the staff as a whole. It has a clear answer to the question of what I can expect when I retire at 55, 60, 65, 70 or any age in-between. This assumes a ten year minimum contribution by the Board and all the staff at the school. There is no opting out provision. This a defined-benefit plan. There are death and spousal provisions. It’s greatest benefits are two: This program is built on the idea that the community has a responsibility for its teachers. A second benefit is that it is based on supporting a member until death. This takes away a lot of anxiety for those who do not understand investment strategies.
- Begin an RRSP plan. In addition to the CSI plan, begin adding money to an RRSP plan. The tax saving is then used to pay down the mortgage. This is a self-directed plan and can be used for a one year sabbatical or another income option when you retire.
- Aim for a career change at 60. Take the teaching skills gained and become a Teacher-on-call and get involved in community support opportunities as a volunteer. Check out the “Bridging Cultures” and “Walking Together” programs.
- Count on the government providing $20,000.00 towards your income at age 65 if you have worked full time most of your life. This includes Old Age Security and Canada Pension Benefit. If you are married your spouse will bring money to the table as well.
- Count on your CSI Plan paying out $35,000.00 if you have worked 35 years in a CSI Canada Pension Plan.
- Your best investment for your future is a owning your own home, mortgage free by the time you are 55. Buy at 30 and take a 25 year mortgage.
- Try to be a one car family. The biggest drain on family finances are raising kids, a mortgage and car ownersip. Buy new and keep the car for 12 years.
- A Pension Calculator:
The government of Canada has developed a handy retirement calculator. Check it out at the following link: https://srv111.services.gc.ca/INT_01.aspx
The Christian School Pension Plan has its own calculator you can access at the following link: https://client.sbcsystems.com/csican/
pvh dec. 2009
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