As a special needs teacher in a Kansas City elementary school, Aaron Sherman felt a strong connection with his students with autism. He found himself in tune with their needs and sympathy and understanding underlined his teaching style.
“Most days I’d pinch myself because I couldn’t believe I got to do this,” he said.
After a few years working solely with these students, Sherman decided to try teaching math and science to 3rd graders. With more than 50 students, the never-ending pile of papers to grade and lesson plans to manage, he found himself no longer energized by the profession he thought he’d be in for the rest of his working years.
He was only 31 years old, yet a growing unhappiness and undeniable desire for work-life balance led him to leave teaching behind. The thought of retirement benefits, he said, never played a part in his decision to stay or leave.
In fact, in his years as a public school employee, he paid little to no attention to the retirement savings he was earning through KPERS (State of Kansas Retirement System for Public Employees).
“I knew we had a pension, but I didn’t know anything about it. I didn’t know what I was contributing, what my employer was contributing, and I didn’t know when I’d be eligible to retire. I was more concerned about making sure my kids did well on a test – not if I was going to retire in 40 years.”
Shortly after leaving his teaching position, Sherman considered rolling his pension account contributions into another plan, believing he hadn’t reached KPERS 5 year vesting period and they would be refunding his account per their policy. (Note: For a lifetime retirement benefit, Colorado PERA has a different vesting period. All accounts are eligible for a lifetime benefit if funds are left here.*)
Luckily, he learned because of the service credit he earned as a special needs paraprofessional, he met the vesting requirements under KPERS and was eligible to once he reached retirement age. He immediately decided to leave his money so it would continue building a retirement savings.
When asked if he would have taken the initiative to save for retirement on his own if he worked in a private sector position, Sherman’s answer was simple: absolutely not.
“I was in a place where I spent every dollar I made. I was an awful saver – I didn’t know how to budget and I didn’t understand the power of compound interest. I’m glad my contributions were automatic because I wouldn’t have willfully made them.”
Before and during his tenure as a teacher, Sherman spent time working at an assisted living facility where he could have earned a generous employer match in his 401(k) plan. But the opt-in choice made him weigh the options of having a bigger paycheck now or save for a future he couldn’t yet fathom – something he was able to avoid with his automatic KPERS pension savings.
So he never signed up.
“Even if the benefits of the 401k paired with an employer match would have been explained, I wouldn’t have done it. I figured I would start saving when I was 40 or 45,” he said.
After leaving his teaching job, Sherman accepted a job with Colorado PERA as a Field Education Representative. He now helps teachers and other public employees understand the benefits he once ignored – a population he can relate to on a variety of levels.
“I’ve been in their shoes. I understand what they might be thinking about and struggling with,” he said.
Sherman hasn’t completely given up on the idea of teaching again at some point in the future, and he believes now he would be better equipped to handle the pressure.
But regardless of whether he returns to the teaching profession or takes another path, he knows he already has a strong foundation for a retirement for which he might otherwise have failed to plan.
* More information on Colorado PERA’s vesting:
PERA’s retirement benefits are determined using two different calculations – either the defined benefit calculation or the money purchase calculation. The defined benefit calculation is the more commonly known calculation – your years of service x your highest average salary x 2.5 percent.
The money purchase benefit is calculated using the amount in your member contribution account (your member contributions plus interest). That amount is doubled, and then PERA uses your life expectancy to annuitize that amount to give you a lifetime benefit. If you have five or more years of service credit then PERA calculates both the defined benefit calculation and the money purchase calculation and you get whichever one is higher.
When you have less than five years of service, PERA uses the money purchase benefit to calculate your benefit. So no matter how many years of service credit you have, you will always be eligible for a lifetime retirement benefit once you reach age 65 under the PERA benefit structure. (Note: If you are under the DPS benefit structure then you must have five years of service credit to receive a lifetime benefit).