Bonnie, 58, retired about two years ago. When she first thought about retirement she wasn’t so excited. She was unsure how much she’d miss teaching. You might well ask, “If she had this much anxiety over retirement, why did she do it?” Well, my friends, the answer is simple: She almost couldn’t afford to keep working!

By the time Bonnie retired, she’d taught for more than 32 years. Since she isn’t married, she was able to take a straight life payout from the state retirement system providing more than 73% of her working income. When you consider that while she was working there were paycheck deductions that would cease after retirement, the 73% is actually more like 87% of her modified gross income. Examples of these deductions are state retirement contributions and her supplemental retirement account savings.

Bonnie’s state retirement system allows retired members to work half-time and still receive retirement benefits. After a discussion with her district Bonnie was offered a half-time teaching position to begin after she retired. Now she teaches part time and earns 50% of her old salary from working half time and 73% of her old salary from the state retirement system. For those of you who choose not to do the math, that’s about 123% of her pre-retirement income!

By the way, Bonnie won’t be eligible to receive her approximately $1,200 per month from Social Security until she’s 62. So the plan is to work half-time at least until then.

Through her supplemental retirement plan savings and Roth IRA Bonnie saved about $400,000 over her 32 years. For those of you who think that's impossible, let’s look at the math. If Bonnie had earned 6% on average in her accounts, she’d have had to invest $4,140 a year to reach that figure. That works out to $345 a month. Clearly that’s “doable.”

Bonnie bought her first home after teaching for a couple of years and she’s lived there ever since. She originally took out a 30-year mortgage and refinanced a couple of times to get a better interest rate, and she now owns it free and clear.

Bonnie was advised to create an estate plan for the distribution of her assets at death. Since she has no children and strong social interests she named several charities as her beneficiaries. Because of this, she not only feels great about her ability to help but also has a voice in some of the local nonprofits she’s supporting¾they know she’s deeply committed to their mission and that they will ultimately receive a substantial contribution at her death.

Bonnie also decided she doesn’t need long-term care insurance since she has health insurance through SRS, a steady income and no debt. If she develops a condition that requires her to have care she could pay for most of it through regular income.

In our scenario, Bonnie makes more money working half-time today than she did working full time. And when she reaches 62 and completely retires she’ll still earn more than she did working full time.

The above is for illustrative purposes only. This hypothetical example is not guaranteed and does not reflect any specific product. Investments are subject to investment risk including the possible loss of principal. The investment return and principal value of the security will fluctuate so that when redeemed, may be worth more of less than the original investment. In addition, these figures do not reflect taxes or any fees, expenses or charges of any investment product.