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Getting Ready to Retire

As state lawmakers ponder cost-saving measures to weaken educators' retirement benefits, about 30 Richmond-area members met Tuesday to learn the ins and outs of the retirement system.

Carol Donohue, staffer in the VEA Office of Government Relations and Research, told those attending that one of the key features of the Virginia Retirement System (VRS) is that it offers a "defined-benefit" pension. That is, participants can receive a guaranteed monthly income in retirement.

"Right now, you don't have any investment risk," she said. "Whether the investment markets go up or down, your benefit is calculated by a formula." In contrast, "defined-contribution" plans, like the 401(k) retirement accounts that are more popular in the private sector, leave the investor guessing about how much money they'll be able to draw from their account during their retirement. In the worst-case scenarios, employees end up working much longer or risk outliving their retirement savings.

The 401k option for VRS is no longer being considered by lawmakers in the General Assembly. But several options for weakening VRS benefits remain on the table, including raising the retirement age and lessening the benefit for new teachers. (Click here for an update on current options.)

Donohue walked participants through many of the key financial aspects of retirement, including what the options are for your pension distribution, the health insurance credit, retiring on disability, survivorship options, and other matters.

Jo Anne Stainback, a preschool teacher in the Richmond city schools in her 31st year of teaching, said she came to the seminar "to learn more and to pull together what my options are." She said she has not yet settled on a retirement date, joking that, "When I take the 4-year-olds on a hay ride and I can't get myself into the wagon, then I'll know it's time to go!"

If you are nearing the end of your career, take advantage of one of the VEA Pre-Retirement seminars, which run through April 21. (Check the schedule here.)

Photos: Click on the link below to view photos from the Richmond seminar.