Picture this—you’ve just retired after decades in the classroom. You’ve graded your last paper, closed your classroom door, and walked into your new season of life. You’re ready to relax, travel, and maybe spend more time with family. But then, the first pension check comes. And suddenly, it’s smaller than you expected.

That moment of realization? It happens to more educators than you might think.

So, let’s ask the big question: Will your pension really cover your retirement lifestyle—or is there a “pension gap” waiting to surprise you?

The Reality Behind the Promise of Pensions

Pensions are powerful. They’ve been a cornerstone of the teaching profession for generations. After all, one of the main reasons many educators stayed in the classroom long-term was the security of that promised pension at the end of the road.

But here’s the truth: while pensions are an amazing foundation, they’re often not the whole picture.

• Reduced payouts for early retirement – retire too soon, and the numbers shrink.

• No COLA (Cost-of-Living Adjustment) in many plans, which means inflation quietly eats away at your monthly check.

• Replacement percentage limits – pensions often cover only 50–70% of your pre-retirement income.

And let’s be real, when you retire, you won’t want just “enough.” You’ll want freedom. Freedom to enjoy your retirement without second-guessing every dollar.

Why This Matters for Educators

You’ve dedicated your career to shaping lives, not chasing dollars. You stayed late to coach, graded papers during weekends, and poured your energy into students. But when retirement arrives, it’s no longer about lesson plans—it’s about your plan.

If you don’t know your pension gap, you’re essentially walking into retirement blindfolded. And I don’t know about you, but I’d rather be holding a map than stumbling in the dark.

Why Listen to Me? (Establishing Credibility)

I’m Debbie Majher—a former educator who traded in my chalkboard for a financial planning career. I’ve stood in your shoes, wondering if my pension would truly be enough. Today, I help teachers—both public and private—create retirement strategies that work in real life, not just on paper.

So, trust me when I say this: knowing your pension gap isn’t just important—it’s empowering.

What Exactly Is the Pension Gap?

Think of your pension as the base of your retirement “house.” It’s solid, dependable, but rarely covers all the square footage you need. The pension gap is the space between what your pension will provide and what you’ll actually need to live the retirement lifestyle you’ve worked so hard for.

Here’s a simple way to picture it:

• Pension income = Foundation

• Retirement budget = Full house with rooms for bills, healthcare, travel, hobbies, and grandkids

• Gap = The space between the two

And just like building a home, if you leave out that missing piece, the structure doesn’t feel complete.

How Do You Find Your Pension Gap? (Step-by-Step Guide)

Let’s break it down in plain English.

1. Calculate Your Projected Pension Income

• You can grab your annual pension statement or request an estimate from your pension office.

• Look at the formula: years of service × average of your top salary years × multiplier (usually between 1.75%–2.2%).

• Example: If you taught for 30 years, your average salary was $60,000, and your multiplier is 2%, then: 30 × $60,000 × 2% = $36,000 per year.

2. Figure Out Your Desired Retirement Budget

This isn’t just about bills. Think:

• Everyday needs (housing, food, healthcare).

• Wants (travel, hobbies, eating out).

• Dreams (vacation home, legacy gifts, bucket-list experiences).

3. Compare the Two Numbers

• Pension: $36,000/year ($3,000/month).

• Retirement Budget: $50,000/year ($4,167/month).

• Gap = $14,000/year ($1,167/month).

Boom. That’s your pension gap.

What Can You Do to Fill the Gap?

Now comes the fun part—solutions! And no, they don’t have to be scary or complicated.

1. Contribute to a 403(b) or IRA

Think of this as your personal “gap filler.” Even small, steady contributions grow over time thanks to compounding interest.

2. Explore Hybrid Retirement

Retire from teaching full-time, but keep a part-time gig—consulting, tutoring, or even something completely different that brings joy. This keeps income flowing while pension benefits start rolling in.

3. Consider Side Income Streams

Ever thought about writing curriculum guides? Offering online courses? Selling your expertise in creative ways? You’d be surprised at how many teachers earn extra income doing what they love.

4. Delay Social Security

For those eligible, waiting until age 70 increases monthly Social Security checks—helping bridge the gap with bigger long-term payouts.

5. Cut Unnecessary Expenses

Sometimes, it’s not about earning more but spending smarter. Downsizing a home, paying off debt, or trimming subscriptions can make a big difference.

Emotional Side of the Pension Gap

Let’s not overlook this: discovering your pension gap isn’t just about math—it’s emotional. It can stir up doubt, fear, or even regret.

• “What if I waited too long to start saving?”

• “What if I run out of money?”

• “What if I make the wrong move?”

But here’s the flip side—clarity replaces fear. The moment you calculate your gap and start planning, the doubt lifts. Suddenly, you’re in the driver’s seat again.

FAQs About the Pension Gap

Q: Do all teachers have a pension gap? A: Not necessarily. But most will, especially if they want to maintain their current lifestyle in retirement.

Q: What if I don’t understand my pension statement? A: Don’t stress. Many educators struggle with this! Reach out to your pension office—or better yet, schedule a Pension Review with a financial planner who specializes in teachers.

Q: Is it too late if I’m 10 years from retirement? A: Absolutely not. In fact, that’s the perfect time to start. You still have time to adjust, save more, and plan strategically.

Q: I’m in a private school—does this apply to me? A: Yes! While your retirement package may look different, the principle is the same: know what you’ll get, compare it to what you’ll need, and plan for the gap.

The Bigger Picture: Why Action Matters

If you don’t take the time to figure out your pension gap, you risk finding out too late. And that’s not the kind of surprise you want in retirement.

But when you take action—when you calculate, compare, and plan—you give yourself the gift of peace of mind.

Think of it like lesson planning. You wouldn’t walk into class unprepared, right? Retirement deserves that same preparation.

Conclusion: Recap and Challenge

So, let’s recap:

• Your pension is powerful, but it likely won’t cover all your expenses.

• The pension gap = the difference between your pension income and your actual retirement budget.

• You can bridge the gap with 403(b)s, IRAs, side income, hybrid retirement, and smart planning.

Here’s my challenge for you: This week, take 30 minutes to calculate your pension replacement percentage. Don’t just guess—actually look at your numbers. Then ask yourself: “What’s my gap?”

Drop a comment or send me a note sharing what you discovered. And remember, clarity today means confidence tomorrow.

Because you deserve a retirement that’s not just secure—but joyful.

— Debbie Majher