Educator on FIOR Interview 22: 1PF (Independent School Mathematics)

The Educator on FIOR (Financial Independence Optional Retirement) series features stories of educators on the journey towards financial independence. No matter when you start, where you are on the journey, or how you approach it I love sharing your story!

Today’s guest reached out first to ask if I was interested in sharing the story of educators working in independent schools. The answer was an emphatic yes!

Whether you’re working in early childhood, K-12, or higher education – in a public, private, or non-profit setting – your story provides valuable perspective.

Today’s interview is a perfect example. As a career public educator and advocate, I appreciated learning more about the experience of working at an independent school. We all have an opportunity to learn from each other.

I’m thrilled 1PF agreed to participate.

Enjoy!

Tell us about you. 

Hi, EFI readers. I’m 1PF (short for what’s known in tech as a “single point of failure,” for the administrative staff work I’ve been doing for 25 years that no one else in this school currently knows how to do). I’m single and in my late 60s, and I plan to retire in two years. 

I’ve wanted to teach ever since I first went to school. I attended public elementary schools and an excellent independent junior high and high school, then earned degrees in mathematics, very fortunately debt-free. My parent paid for undergraduate costs, and I worked on and off campus during the college years and summers to pay for books and other expenses. Then I had a graduate fellowship and campus jobs to pay for the master’s. That was 45 years ago. I went right into teaching, full-time at first, then part-time after I took on the administrative work. 

I’ve always loved mathematics — the beauty of the patterns, the elegance of a concise argument, the logical connections and applications, the counterintuitive results, the open questions. And there’s always more to learn: the field of chaos, fractals, and dynamics, a subject we now teach, did not even exist when I began my career. 

I noticed that the other EFI interviewees came from public school backgrounds, and I thought readers might like to know more about the independent secondary school environment and opportunities for financial success. 

What do you like most about working in education? 

I like so many aspects of working in independent schools, and in this one in particular. Our school strives for diversity in our student and faculty population. Despite being located in a predominantly white, wealthy community, over a third of our incoming class this fall are students of color, and over 10% of our students will be the first in their families to go to college. In many boarding schools, coaching and living on campus in dormitories are required for faculty; here, being a part-boarding, part-day school, these positions are optional and for additional pay. We strive for equity in all our policies. Yes, our tuition and fees are high, and we do have many full- pay students; however, thanks to generous donors, we offer financial aid that meets families’ full demonstrated need. 

As an independent school, we are not bound by state licensing requirements; we can hire whoever is the strongest candidate in the subject. A number of our teachers have left college positions to join our faculty. Nor are we bound by state testing. We have the autonomy to design and teach our course offerings, collaborating or coordinating within each department and across departments, as we wish. We may select textbooks or write our own, and choose various forms of pedagogy and assessments, as we deem most suitable. Class sizes are small, usually between 4 and 15 students. There are professional development and summer sabbatical opportunities. 

There’s always something new in the pedagogy, too. When I began teaching, it was chalkboards, purple “dittos” (spirit masters), and transparencies displayed on projectors. Now we have powerful computer software and smart projection whiteboards. In math we also have graphing calculators (handheld or smartphone apps) and digital notetaking apps, and in the last decade my students have been using clickers for voting on conceptual questions. 

I recently retired from the teaching part of my job. One of the things I will remember most is looking forward to every class. A student might ask a question I hadn’t thought of before, or another might solve a problem in an entirely new way. Or they might all revel in the intellectual satisfaction of mastering a particularly challenging topic. After every class, even a full-period test, students invariably said thank you. Former students sometimes visit on break from college and report that the math and study skills they learned in class are helping them thrive, or their engineering professor requires such detailed supporting work that now they appreciate why I held them to that standard. Class reunions that the school hosts each spring are very well attended by recent and older alumni and are also enjoyed by current and former faculty. 

Discipline in the classroom is virtually a nonissue; in all the years I was teaching, I had to ask only one student to leave class. Each student has a faculty advisor, and we meet our advisees regularly, often one-on-one at lunch. The various deans support faculty in all situations involving students and families. I’m sometimes the only adult in the building at night, and I always feel safe. Our dining hall is open for three meals a day to all faculty and their immediate families, and to all students, at no charge, and the food quality and variety are amazing. Despite an age range of over 40 years, various faculty members enjoy having dinner together, sharing news of the day in a wonderfully collegial atmosphere with much laughter. 

What do you like least?

There’s not much. Every few years there’s new administrative software that always seems to need some workarounds to handle our complications. We spend a lot of time not just on grading but also on multiple reports each year for parents. I know it’s common in schools to dislike having frequent faculty meetings, but I always find ours interesting, and often quite enjoyable (the snacks help). 

What is your Why of Financial Independence? (Why are you learning about or seeking FI?)

With no close family, I need to provide for my future care when my health declines. I’ve been investing to be able to afford to retire to a life plan community. 

I didn’t begin learning about financial planning until a colleague gave me a book on prudent investing in 1998. While much has changed in the economy since then, making some of the specifics in the book outdated, the explanations of asset classes made sense, and the underlying principles of diversification have held up well. In the meantime, I’ve continued to read everything I can find on personal finance and passive investing. 

My current interests are in Wade Pfau’s research on avoiding sequence of returns risk (recession occurring unluckily near the start of retirement), and on the advantages of low-cost single-premium immediate annuities with inflation adjustment over bond funds in our current low-interest-rate environment. 

Are you: 

• ○ FI Curious – Just learning and becoming interested in financial independence 
• ○ Future FI – On the path, but still learning. Destined for financial independence! 
• ○ FI Success – Financially independent! 
  

While I can say I’m now at FI Success, I know I’m not done. I’ll use the next two years to top off my contributions and finish preparing my investment allocations for the next downturn in the stock market. 

Share any financial numbers you are comfortable sharing – examples include: 

My earnings were never more than $15K before marriage, $12K during marriage, and from $24K to $78K (full-time) since returning to teaching in my early 40s. I’m currently half-time and am also receiving $13K in SSA ex-spousal benefits for four years while delaying my own benefits until age 70. 

As part of the compensation for my administrative work I’ve had an apartment on campus; thus what I haven’t spent on food, housing, utilities, etc., I’ve directed toward retirement. My investment balance has gone from $18K at age 45, to $295K at age 55, to $1.25M at age 65, and currently hovering around $2M. Using index funds wherever possible, I kept a 70/30 ratio of stock+REIT funds to bond+cash funds until four years from retirement, when I de-risked by shifting a lot of the former to the latter. 

Tell us about your path to FI. 

• ○ What are your successes/wins? 
• ○ What are your challenges? 
  

The successes and challenges have been intertwined. The main challenge was my late start in investing for retirement. I left my first two jobs too early to have any vested amounts. Not yet financially savvy, I invested too conservatively at the next job for six years, then left for marriage, which turned out to be a financial debacle. I returned to teaching and spent the next five years paying off ex-marital debt and the mortgage; I then shared the house with friends, which helped pay for taxes and repairs. I was nearly 50 when finally able to contribute to our supplementary retirement plan. 

The main success has been working at a school with excellent benefits. We have a TIAA pretax 403(b) retirement plan; we contribute a mandatory 5% of gross pay with a more-than-equal match. In addition, we may make optional contributions up to the (2019) $19K limit ($25K if age 50+) to either the 403(b) or the posttax Roth 403(b) account. Our plan began the Roth 403(b) a couple years ago; I wish we’d had it earlier. 

The two big economic downturns in the 2000s were disastrous for so many people, but the timing was good for my early wealth accumulation phase of investing, as I had little to lose and was buying stock at fire-sale prices. With the mortgage paid off, I was able to maximize retirement contributions and get long-term care insurance with 5% inflation rider. 

It helped that I’m naturally inclined to be frugal. I follow “pay yourself first” and cannot abide the thought of carrying a credit card balance. I didn’t get a smartphone until recently (Republic Wireless, educator discount). I have free use of the school’s Wi-Fi and gave up cable a few years ago; on my old tablet I read borrowed ebooks via the OverDrive app and watch streaming video from one inexpensive subscription at a time. 

What is your long-term goal? Do you have a FI target? 

Simply put, not to outlive my money — to have sufficient investment income to cover my living expenses without worry for at least the next 30 years, and have what I hope will be a generous amount left over for the beneficiaries of my traditional IRA (my schools and my faith community). Whatever’s left in the Roth IRA (tax-free) and the taxable account (stepped-up basis) will go to my one remaining family member. 

If you become financially independent will you: 

• ○ Retire early? 
• ○ Continue to work in education? (How/why?) 
• ○ Do something different? 
  

In retirement I plan to continue learning (refresh and extend the languages I’ve studied, do lots more mathematics, take up something new), participate in some organized physical activities and volunteer in my retirement community, attend recitals and other performing arts and sports events at the local college, and read, read, read. I’m pondering how I might share with other schools’ staff the successful practices I developed in my niche administrative work. 

Tell us about a short-term goal you’re working towards. 

I’m planning for transitioning to retirement in two years. I sold the house two years ago and put the proceeds in cash toward the life plan entry fee and moving costs. Early on, before I learned about asset location, I made some unwise choices for investments in my taxable brokerage account at TIAA; I’ve recently done some tax-loss harvesting to clear out the least tax-savvy investments, and soon will sell the rest. I’ll finish moving my retirement plan funds to Vanguard, so that everything is at Vanguard for simplicity and low cost. This includes moving the Roth 403(b) funds to my Roth IRA before I turn 70 so I’m not hit with an RMD on the Roth 403(b). 

At retirement I’m planning 65/35 in the Roth IRA for long-term growth, and 30/70 (eventually rising to 50/50) in the IRA for RMDs, with withdrawals using the CAPE median strategy and budget using the Hebeler “happy results” strategy. For parking the RMD, emergency fund, and any unspent budget amounts, the taxable account will have a money-market or short-term government bond index fund, a state muni bond fund, and a total US stock index fund. 

Who/what inspires you? 

My students and my colleagues — their intelligence, creativity, energy, wit, and candor never fail to energize me. Even if math is not my students’ favorite subject, they love learning. Year after year, my colleagues offer an astonishingly rich academic, cocurricular, and extracurricular program in a creative, nurturing environment, within the school’s tight budget. 

What’s something you want to say to other educators about financial independence? 

If being able to teach how you want to teach sounds appealing, consider working in an independent school. Don’t base your decision only on salary; look for a school with generous retirement benefits and the money-saving opportunities of living on campus. Independent schools vary widely in a multitude of ways; do research online and visit in person to get a sense of the school community. 

Is there anything you’d like to get feedback on from the community? 

Not at this point, but that’s mostly because I intentionally maintain no online presence. I just hope that this independent-school perspective is at least interesting and perhaps even helpful to readers. 

I really enjoyed reading 1PF’s story. As someone who also got a late start on investing and personal finance, it’s great to read how much 1PF has learned. The intentionality and clear plan are impressive!

It’s also illuminating to read about the differences between public school compensation and what 1PF has at an independent school. Did anyone else notice the “more than equal” match of 403B! That’s something that I’ve never seen in public education. Have you?

This is a great reminder to study your contract and compare all compensation when making an employment choice. 

Thanks again 1PF for sharing your story!

If you missed any others, don’t forget to check out the other Educator on FIOR Interviews.