Ways We Retire

Academe, May/Jun 2007 by Maloney, Wendi A

Recent faculty retirees around the nation tell us their stories.

To accompany publication of the AAUP's 2007survey of faculty retirement policies (see the article by Valerie Martin Conley in this issue), Academe interviewed retired faculty members from different types of institutions around the country to find out how well their preparations for retirement are serving them now.

A State University

"It just dawned on me that it was time to go," says Vicki Sharp, who in 2003 entered the Faculty Karly Retirement Program (FERP) at California State University-Northridge, where she had taught for thirty-four years. "You shouldn't wait too long on any job to step down." Sharp's decision was eased by the fact that her husband. Richard-who had already retired from Northridge-was enjoying a life of "self-scheduled semiproductivity."

Her choice was also made easier because she knew her finances were secure and she could continue to teach. "It's really nice," Sharp says. "I don't have to work, but I love teaching." Under the FERP program, tenured faculty members "phase into" retirement by teaching half time for five years. Their compensation is prorated, but it is at the same rank and salary level they had before retirement. Participants are eligible for salary and merit increases. At the same time, they begin to draw on their retirement income.

Like other state employees in California, faculty members at public institutions participate in the California Public Employees' Retirement System (CalPERS), a defined-benefit retirement program. Individual retirement benefits are calculated according to a formula that takes into account years of service, age at retirement, and final compensation. CalPERS also provides health-care plans; more than two-thirds of retired state workers are enrolled in the HMO option. Employers contribute to the retirees' monthly premiums, and the retirees cover the difference between the employer's contribution and the actual premium amount.

To plan the timing of her retirement. Sharp says she consulted the human resources office on her campus. "The office has wonderful, helpful people who will sit down with you and figure out your finances," she reports. In addition to her CalPERS retirement income, she receives income from a supplemental tax-deferred retirement plan she started just after beginning teaching. "I put aside extra money for this plan every month," she says. "It's worked out really well for me."

Sharp, who has a PhD in educational psychology, teaches computer courses in the education department one semester each year. When she is not teaching, she writes books and articles related to her field. Since retirement, she has started to write creatively as well. In addition, she says she has "loads of time" to enjoy other interests with her husband. They travel, read, exercise, and attend the theater and chamber music concerts. There's not enough time to do everything I want to do," Sharp says.

Despite her happiness with her retirement. Sharp sees one downside. The FERP plan moves faculty members not only out of their former offices, but also out of the buildings that house departmental colleagues. Because of the lack of space in her FKRP office, Sharp has to meet with students in the hallway. "The office is so remote, people don't know I exist," she says. Besides being inconvenient, the office location undercuts collegiality among department members, Sharp notes. "When I was an assistant professor, I was so glad older faculty were around-they filled an important role by mentoring younger colleagues. Now that's not possible."

A Community College

"I loved my job," says Marilyn Carien, who retired from Madison Area Technical College in Madison, Wisconsin. "But I wasn't the only one who could do it. 1 felt 1 should let a younger person have a chance." As she approached fifty-seven, the age at which she would be eligible for earh' retirement, she began to consider leaving the institution at which she had taught English for more than thirty years. Under MATC's early-retirement program-negotiated by the Wisconsin Federation of Teachers, an affiliate of the American Federation of Teachers-faculty who agree to retire at a certain date receive fully paid health coverage until age sixty-five, when they become eligible for Medicare.

Carien says she found the plan enticing but didn't act precipitately. She took a careful look at her spending patterns in recent years to determine if her retirement income would be sufficient to cover her costs. The Wisconsin Retirement System, in which MATC faculty members participate, calculates monthly retirement benefits according to two methods. Retirees can select a benefit based on a multiple of their three highest annual salaries and years of service. Alternatively, they can choose a benefit that multiplies their contributions to their retirement account and those of their employer by a factor based on their age when the benefit begins.

Carien determined that the first method would yield a higher monthly benefit for her. To improve her retirement income, she decided to make sure her final three years of salary would be the highest of her career. "I worked very hard my last three years at MATC," Carien says. "I substituted for colleagues who couldn't cover their classes, something I had not done as much of in previous years, and I took on extra work that increased my annual compensation." Moreover, she enjoyed it. "When you know it's going to be over soon, it is even more joyful to teach," she says. Carien succeeded in making her final three years her best paid. In addition, she received a lump-sum payment of $30,000 for sick days she had earned but not used.