Many teachers want to retire early from teaching. The key to early retirement from teaching is finding a way to build up your savings or replace your teaching income. If you are hoping to retire early from teaching you need to have a plan. Here are some resource to systematically plan to quit teaching and retire early.

*The ideas and resource shared below will (most likely) take a few years to put into place.

Make a plan to retire early from teaching and enjoy early teacher retirement.

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Why Should Teachers Read This Post?

FYI: I only endorse things that I've personally used or have come highly recommended from my teacher friends and family and think they may be helpful to you. If you buy anything mentioned using my Amazon referral links, I may get a small commission at no extra cost to you.

This blog is mainly a focus on teaching reading. Every once in a while I will write a post about a related topic that is not only about ‘teaching reading.’ This post is connected to teaching, in the sense that many of us are tired of teaching and want out of the profession.

People who want to retire early from teaching in a school should read this post.

Since 2020, and even before that for many teachers, the teaching profession has become an exhausting challenge and many teachers are leaving in droves.

Time Freedom

I am one of those teachers that would like to retire early, even earlier than typical ‘teaching early retirement’ with a teaching pension plan. My main reason is that more than anything, I would like more time flexibility in my life.

There are a lot of great things about teaching, but one thing that I never considered when studying to become a teacher is that in order to be a teacher, you actually have to teach . . . at a school . . .during the school week!

Yes, there are certain flexible time situations that you can create like teaching at the college level, online, or some other creative way to teach, however the point for me is that there isn’t much flexibility in the teaching profession if you don’t want to work Tuesdays or you aren’t a morning person.

I can’t talk to my principal about creating a work from home situation, that just doesn’t exist. If you want to be a teacher, you have to be a teacher where the students are located.

Student Behavior & Teacher Burn Out

Other teachers might feel burned out, frustrated with student behaviors or lack of admin support or just overall feel that they are not being paid what they are worth and can’t take another single minute of working in education. If this is you, I am sorry. It is tough out there.

Hopefully you will find some helpful information in this post, but much of this information is more long term strategizing and will not help you quit your job tomorrow.

Long Term Planning for Early Teacher Retirement

This post is intended for those of you that would like to make other plans . . . eventually.

For me, I usually enjoy my job, feel I am paid fairly, am supported by my admin and student behaviors are (generally) not too awful. The problem is my heart just isn’t in teaching like it used to be. I wouldn’t say that I am burned out, but I want to make plans to leave before I get there.

The Systematic Plan to Retire Early From Teaching

In order to put this plan in place you need to begin with the end in mind.

Beginning with the end in mind comes from the book, The 7 Habits of Highly Successful People.

Begin with the End in Mind means that you stay focused on where you want to go. You make decisions with a clear vision of where you want to end up and then continue working toward your end destination (quitting teaching & early retirement) and make moves to make those things happen.

Steps 1-4 listed below are all about figuring out where you are currently and where you want to go. You can do these while working on steps 5 and 6. This includes gathering information about your pension and planning for healthcare when you retire early.

Step 5 is when you start a side hustle or continue to save and invest in order to increase your income and net worth.

**Believe that you can retire early** from teaching

Many of the things that I have learned about early retirement and money management have come from the Financial Independence/Retire Early movement also known as FIRE.

There are some amazing stories of people who have paid down debt and taken charge of their financial lives. Even if you are struggling financially, realize that you can start to grow the gap between what you make and what you spend, which will in turn help you save for early retirement.

Mr. Money Mustache wrote an article, The Shockingly Simple Math Behind Early Retirement, in which he shares how easy it is to calculate how long it will take you to reach retirement (not counting your pension). The time it will take you to reach (early retirement) retirement depends only on your savings rate as a percentage of your take home pay.

If you spend 100% of your income, you will never be able to retire (early). On the other side, if you spend 0% of your income and can maintain this after retirement, you can retire right now.

Check out his article with the Savings Rate/Working Years Until Retirement Article. It is quite interesting.

FYI for those of you wondering, if you only save 10%, you will need to work for 51 years until you can retire. At that rate you might as well finish out your teaching career and collect your typical pension.

Figure out how much money you spend and mind the gap between income and expenses.

While you are planing an early exit from teaching, focus on increasing your income, while keeping your expenses the same or even reducing them. That income gap will continue to grow. Be mindful each year when you get a raise, intentionally use it to pay down debt, start a side hustle, save for retirement or other investments.

Paula Pant from Afford Anything talks about minding this gap between your income and how much you spend.

Calculate How Much Money You Make

The first step in growing this gap is to know how much you make and how much you are spending. You might want to look at a few things to know how much you ‘make’ from your teaching job:

Most Recent Paystub
Most Recent W2 or Tax Return
Teaching Contract For The Current School Year

Using these three bits of information will give you the most well rounded number. While you make X dollars for your salary, how much are you paying in taxes and health insurance? Those two can take quite a chunk out of anyone’s paycheck. If you are contributing toward a pension, your take home pay also just got about 10% smaller.

Calculate How Much Money You Spend

Next thing to do is get an idea of how much you are spending each week and/or month. I hate budgets, but it is a good idea to have a general idea of how much money is leaving your bank account regularly.

Credit cards do a great job of tracking your spending, just make sure you are taking care of the balance each month.

Irregular Expenses

Don’t forget to include those irregular expenses like vacations and car/home insurance.

To find the monthly cost of vacations, find out the cost of the past few vacations you have taken, take the most expensive number and divide it by 12. This will give you a general idea of how much you are spending on a regular basis.

With Insurance, you should do the same as you would for vacations but divide by 6 since you are billed every six months for insurance.

Budgets

If you are like me and don’t like the idea of a budget, you can use Paula Pant’s Anti-Budget. It’s the idea that you decide how much you want to save first, save it and then spend the remaining money however you so choose.

Two budgets that I have tried over the years that may work for you are YNAB and a personalized Google Sheet. They both didn’t work well for me because they required a level of attention and consistency that I struggle with. Many others, however, love these options.

You Need A Budget- YNAB– This app has you create a system where you are giving every dollar you earn a job and grow your savings.

Google Sheets– There is a way you can customize this and add this as an ‘app’ on your phone which helps you input money directly every time you spend it.

What about teachers who are bad with money?

Try to separate the feelings of shame if you feel you are bad with money. Be proud of yourself for recognizing that you struggle with finances and are trying to improve that area of your life (like reading this blog post).

Think if your money struggles are from a lack of income, not enough money to go around, or not the best choices when spending money, paying for wants instead of needs.

If it’s from a lack of income, scroll below for ideas on how to increase the money you have coming into your bank account each month. Start a side hustle, pick up extra work at your school etc.

If your money struggles are from spending too much, look into a variety of resources to support your money management.

Research the various money communities on Reddit
Use Your Local Library to save money and learn more about money
- Libraries can have a variety of money saving options like memberships to a few streaming services, free tickets for museums in the area as well as books and movies to borrow for free. Check out their website or ask a librarian what services they offer.
Use a cash envelope system to avoid over spending.
Learn about and use You Need a Budget to manage your money and plan for irregular expenses.
Work with an ADHD Coach to plan your money management and limit impulsive spending.
- Shimmer is an online ADHD coaching service with a variety of helpful resources and tools rolled into the monthly fee. My ADHD Coach validates my feelings without shame and comes up with helpful ways for me to problem solve around my own ADHD challenges like a weak working memory (having to make multiple trips to the grocery store because I forgot to pick something up) or my impulsivity that I struggle with in a variety of areas like bookstores and on Amazon.
  - If you sign up with Shimmer using my referral link you can save $100 off on your first month. Here is my Shimmer referral link.

Decide How Much Money You Actually Need to Replace Your Salary to retire early from teaching

One of the great things about doing step number two is that it helps you to see how much you actually need to replace in your salary. If you make $80,000 a year but only spend $45,000 a year, you will only need to focus on earning and/or saving $45,000, not the full $80,000.

Knowing this number will become your target for your end of teaching date (Begin with the end in mind). Once you have saved enough or generated enough income through a side hustle to replace this amount, you should be in good shape to make decisions about retiring early.

Reduce Your Expenses to Retire Early From Teaching

Look at ways to reduce your expenses. This way you won’t need to replace as much of your salary overall.

There are certainly big moves like reducing the cost of your home- buy a smaller, more affordable home or getting a roommate. I personally like living in my slightly larger home (not having to share a bathroom with my kids is amazing!) with my family and am willing to work a tad bit longer to enjoy the extra space, but it helps to know what your options are if you want to get out of teaching earlier.

Keeping your car for a little longer or buying a less expensive model can also keep a little more cash in your pocket.

One area you can also look into is your cell phone and the monthly bill that comes with it. Could you be okay with replacing your cell phone less often? We have had our iPhones for the past four years and they are still functioning. The battery isn’t as great as it used to be, but I can go most of the day without needing a charge.

We also save on our monthly wireless bill. I pay about $20 a month for my Mint Mobil cell phone plan and my husband pays $30 for his unlimited (I use less data than he does- 15 GB, hence the cheaper price). We have been customers for years and are really happy, plus getting an email from Ryan Reynolds is always a nice treat for my inbox. They run on T-Mobile’s network. Check out their coverage here.

Planning For Healthcare

As health insurance is typically a perk of working for a school district, this is something that you need to plan for. There are many people out there that have left full time work and have had to deal with figuring out health insurance, so please don’t think this is an insurmountable hurdle.

Please keep in mind the cost of healthcare is something that you should account for in your savings numbers that is most likely not currently in your financial numbers.

There are a few options out there, but the one that seems to be the most direct is using the ACA (also known as Obamacare).

Here are a few articles and podcasts that I have listened to over the years that have discussed various options for healthcare when self-employed or during early retirement.

Bigger Pockets Money Podcast- 18 Options for Healthcare in Early Retirement with Lynn Frair

Choose FI- Navigating Healthcare

I Can’t Retire- I Need Healthcare

Mr. Money Mustache Health Insurance

Afford Anything PSA Thursday:The Affordable Care Act With Tanja Hester

FI Healthcare

Be Flexible When Thinking About Your Early Retirement Number

You do you. Focus on what works for you.

Part-Time Work

This doesn’t have to be an all or nothing type of arrangement. You can always find part time teaching positions that free up some of your full-time working hours. Maybe if you just did the same thing you are currently doing, but only half of the time you would be happier.

If want part-time, be flexible about where you work part-time. You might have to look for positions outside of your current school district.

Let Administrators Know You Want To Reduce Work Hours

If you would like to try to stay in your current school district, talk to an administrator you feel comfortable speaking with. You never know the variety of conversations admins might have about future positions for the district. If you reach out to them, you have a stronger chance of being considered for a position.

Remember if you are one of the higher paid teachers in your school district or if you are toward the top of your district’s pay scale, you could be doing the district a favor by reducing your hours. If you moved to a part time position you are also cutting your salary, which the district will most likely replace with a cheaper, newer teacher.

Be flexible.

Don’t be a passive actor. If you want to retire early you need to make the moves to make it happen.

Pensions

If you were to stop teaching today, do you know when you would be eligible for your pension?

Do you know if it is worth it to the pull your money out of the pension now or wait to receive the pension benefit?

You need to become familiar with the rules and regulations of your teaching pension. Here in Illinois we teachers pay into TRS Illinois. Familiarize yourself with the age and service credit requirements. Not all states are exactly the same in their requirements. Questions to consider include:

How many years do I need to teach to qualify for a pension?
How old do I need to be to start taking money from my pension?
Do I qualify for early retirement?
Is it worth it for me to continue teaching to earn my pension?

Don’t be shy, call up your pension’s TRS program and make an appointment. You are paying quite a bit of money into this program. These are the people who can share the pension numbers and eligibility with you.

You will not be the first person to leave teaching before reaching pension age. Think of the amount of teachers who pay into a pension the first few years of teaching and switch careers. I hope they don’t let that money just sit there. Talk to your TRS. They are dealing with your money.

Everyone I know who has made this TRS appointment and spoken with their pension program has shared how helpful they felt the appointment was and they wished they did it even earlier.

Books About Pensions

Check out the TLDR Teacher Pension Books. The official title is:

TL;DR: Financial Literacy for ______________________ (insert your state here) Teachers’ Retirement System Members: Optimizing Financial Decisions Based on Your TRS Benefits (TL;DR Financial Literacy Series)

These books are available for free on Kindle Unlimited. The authors are writing a book for each state’s teaching pension, since rules and regulations differ from state to state. They currently have a book for at least 30 states. One book per state. Colorado has a book, Illinois has their own book etc.

Another helpful book to check out is the book, The Golden Albatross.

While he is not a teacher, the author is familiar with military pensions and wrote an entire book (The Golden Albatros s) on how to calculate the value of whether or not staying in a job that offers a pension is worth it.

Check to see whether you are paying into and qualify for Social Security. This is something that varies state by state and depends on your where you may be employed in addition to any public school teaching positions.

Retirement Account Investing

Strategize where you would like to invest excess savings. Be thoughtful about a plan for accessing retirement funds early. Check out the Mad Fientist’s article, How to Access Retirement Funds Early, here.

While it is great to use tax advantaged accounts, consider how long that money needs to be locked up for and how much of a hassle it is to get the money out early. With some planning it is possible, but you can’t just call up Fidelity and ask for the cash you have invested and expect it later that day without paying a penalty. You need to do quite a bit of fancy footwork!

As teachers we have some limited, usually stinky options for tax advantaged retirement accounts. If you are contributing to a 403b or a 457, check to see that it is actually serving you and not the salesperson who sold it to you in the teachers lounge. Some great resources include:

403b Wise– They include information on the good, the bad and the ugly vendors to use or skip. They also have a podcast that heavily focuses on helpful information related to the 403b, Teach and Retire Rich.

Millionaire Educator– If you want to do a deep dive in how to retire early, read this guy’s blog. He has ALL the information a teacher could ever want.

The point of doing this research is to know when and how you can access your accounts. Then leave them be.

Don’t stalk the value of your retirement accounts on a daily basis.

Create your plan and stick to it. Dead people make the best investors for a reason, they can’t change the plan.

Bonus Move– If you don’t like your school district’s options for 403b and 457, talk to your school district’s finance & business person who deals with the vendors. It is not impossible to add good options like Fidelity, Vanguard or ASPIRE.

Find out how many people would need to be on board with signing up and what else you would need to make adding a new vendor to the list happen. If they are still resistant consider other options like joining your negotiations team the next time your Collective Bargaining Agreement is up.

Start a Side Hustle or Continue to Save & Invest

This is the point where everyone’s path will diverge into individual interests. In order to retire early, you need to have some type of savings/income to replace your teaching salary. Your options seem to fall into one of four categories.

Get a new job
Invest in Real Estate
Start a Side Hustle
Invest in a Taxable Brokerage Account

Get A New Job

The difference between getting a new job and starting a side hustle is the trading of time for money aspect. You can get a new teaching job or you can get a new job as a real estate agent or a barista at Starbucks. All of these options, no matter the job, require you to trade your time for money.

If you are struggling in your teaching job and just can’t get yourself to work in the morning, you might want to focus on immediately lightening that load and finding a new job now. This move will not help you retire early, but it may have a beneficial impact on your mental health, which can help you make moves to retire early, just a little later on.

Ramit Sethi author of I Will teach You To Be Rich and the website Your Rich Life has some amazing work and side hustle resources on his blog. If you are not familiar with his work, you need to read his work ASAP.

Invest in Real Estate

When done thoughtfully and with smart moves, Real Estate Investing is the investment that will most likely move the money needle the fastest. Don’t just go out and buy a rental home immediately without doing any research, that is the fastest way to lose money. Educate yourself, read books, listen to podcasts, be thoughtful about this type of investment.

Real estate investing can take many forms including:

Buy and Hold Single Family
Wholesaling
Flipping Houses
Multifamily Rental Properties
Vacation Rentals

Real Estate Books, Blogs and Podcasts

Bigger Pockets

Bigger Pockets was started by a former teacher! It started as a blog and has grown into quite the empire. If you want to learn more about real estate investing, Bigger Pockets has you covered in all areas from many podcasts, to online forums and calculators, webinars to FaceBook groups.

My favorite of theirs is not Real Estate specific, but if you like podcasts you will probably learn quite a bit from their Bigger Pockets Money Podcast.

Bigger Pockets Real Estate Investing For Beginners (Blog)

Bigger Pockets Real Estate (Podcast)

Bigger Pockets Rookie (Podcast)

Set for Life (Book)

Bigger Pockets The Book On Rental Property Investing (Book)

Afford Anything

The creator of Afford Anything, Paula Pant, is great. She quite her full time job to travel Australia for over a year. She is living the dream. She also happens to have a fantastic Blog and Podcast. I love how she shares her thoughts of how she makes decisions and articulately expresses how she goes about making investments. Paula has also hosted many of the best business thinkers on her podcast. She is certainly worth the listen.

One thing that I have not done yet, but plan to in the near future as I start my own Real Estate Investment Journey is her online Real Estate Investing Class.

Afford Anything (Podcast)

Afford Anything (Blog)

Afford Anything Your First Rental Property (online class)

Other Real Estate Investing Books & Resources

Rich Dad Poor Dad (Book)- This one is typically considered one of the first books that put people on the course of real estate investing. To me, the writing of the book was just okay, but the idea of creating assets that pay you money is the key here. Check it out from the library. The author, Robert Kiyosaki, also has quite a few other real estate books that dive deeper into topics like taxes.

Marshall Reddick– Real Estate Investing Firm. I have no relationship with these people, but I do like to check out their website to see the various areas on the costs involved in long distance real estate investments. Their calculators are very insightful.

Norada– Another Real Estate Investing Firm. Still no relationship, but I do like to do research.

Roofstock– Same as the previous two.

Start a Side Hustle

Create multiple streams of income by starting a side hustle.

Do something you love, do something that makes money, do something that is the opposite of teaching. Whatever you choose to do, stick with it and give it time to grow.

For many teachers they might start a teaching blog (like me!) create and sell products on Teachers Pay Teachers (TPT) or start a YouTube Channel. This can lead to quite a lucrative side business like Becca Davis.

Tutoring can also be a lucrative side hustle, but you need to trade time for money. If you don’t tutor for a session, you don’t get paid.

If you like tutoring (or delivering for Uber Eats or buying and reselling on Amazon) and find it pays well, use that money to invest in the stock market or real estate. Use that money for anything that is an asset not a liability.

Side Hustles That Are More Passive

Become an author on Amazon

Start a Podcast

Start a Blog

Create an Online Course

Start a YouTube Channel

Sell Printables on Etsy

All of these require some type of upfront work, but can become more passive as your business grows. Remember these side hustles do not have to be related to teaching. Pick some area that you are interested in, find yourself talking about, or seem to be more knowledgeable than other people and run with it.

The financial success with all of these passive side hustles seem to take at least few years with focus and effort.

TPT Side Hustle Resources

Teachers Pay Teachers is one place where business savvy teachers can go to earn extra money. Many people have used TPT to leave the classroom.

Below are some of the individuals that I have personally learned from and used as I have grown my own TPT store. They share tips on how to get started, where to focus your time and what you should ignore. Some even share the motivating income reports, which can help clarify your own goals and expectations.

Rebranded Teacher Academy (Podcast, Course, Instagram & Facebook)

Savvy Teacher Seller (Podcast, Coaching, Course, Instagram & Facebook)

Terrific Teaching Tactics (Podcast, Course, Instagram & Facebook)

Becca Davis (Blog, YouTube, Course, Instagram & Facebook)

Remember TPT is a marathon not a sprint.

Alex, from Terrific Teaching Tactics and The Terrific Teacherpreneur did a really interesting study and podcast on people who shared their income from selling on TPT. The most helpful information was how she broke down the information based on years people sold on TPT, amount of products in their store and how much they typically made each month.

This information was super interesting, motivating and reassuring. While some teachers might have success early on, selling on TPT is a years in the making process. Check out the specific podcast here.

In doing lots of deep dive research, I have found Becca Davis’ income reports on YouTube super interesting and helpful. From the beginning, around 2018ish, she shares how much time she has put into her businesses and how much she has made. Becca shared that in 2022 she made over $100,000 from TPT alone!

That is incredible. It also helps me to keep in mind what the ceiling of income possibilities on TPT after 5 years of hard work looks like. If she has worked like crazy the past 5 years, I can try to have more realistic expectations in terms of the money I may earn for the amount of time I put into my own business, which is significantly less than Becca.

TPT Side Hustle seems to take at least 3-5 years (most likely longer) depending on your area of expertise and time devoted to your store/brand and how much money you need in early retirement.

Other Side Hustle Resources

Side Hustle (Podcast)

Smart Passive Income (Podcast)

Invest in a Taxable Brokerage Account

The couple behind the blog Millennial Revolution and the book Quit Like A Millionaire built up a seven figure investment portfolio by the time they were 31! They saved and invested, keeping their expenses down and using their raises to increase the amount they invested incrementally.

The nice thing about investing is that it is super passive! You can have your money, in whatever amount, deducted from your paycheck or your bank account and set up to be paid directly into your Vanguard or Fidelity or whichever low-fee brokerage account you choose and invested into low cost index funds!

Research low-cost index funds. Vanguard’s VTSAX is quite popular among the FIRE crowd. Fidelity’s equivalent seems to be FSKAX.

In terms of retirement time frames, this one depends on how much you need to live off of and how much you are investing. The less you need to live and the more you invest, will obviously shorten that time frame.

The couple from Millennial Revolution shared that they planned to live off of less than $40,000 a year using geoarbitrage, and were able to save up over a million dollars in less than nine years based off of their salary as engineers.

Based off of their numbers, this strategy seems like it would take at least 10 years depending on how strong the market.

Both of the people I shared above also happen to have blogs, are published authors and have other streams of income that also help their finances, but the main way they saved for retirement was investing in index funds.

Prioritize Your Mental Health

All of these options for early retirement require your focus and effort. It will be challenging to do any of these if you are not taking care of yourself mentally and physically.

Here are a few ways you can take care of yourself-

Practice saying “NO.” Do not sign up for any extra work that takes you away from your goal of early retirement. Give yourself 48 hours to think about volunteering for something. Often we might make impulsive decisions without considering the drawbacks. Give your brain time to process your thoughts, questions and feelings.

Find a buddy, coach or therapist. Find someone you can talk to about your goals, struggles or just a work bestie that you can laugh off the ridiculous PD that is being shoved down your throat! It helps to have someone alleviate the stress and frustrations of teaching, someone that can help you articulate your feelings, or someone that can push you in your business.

Practice Mindfulness. Meditation, mindfulness, even stretching can help you relieve some of the stress of a challenging job. Mindfulness doesn’t have to look like a yoga retreat, for me it’s being aware that I am typically grouchy and would like a nap at 2:30 during the school day, so I take my class out for a recess every day around 2:30.
Pay attention to your triggers, mood, and the comments that other people might make. Especially make note if someone asks you if you are doing okay. If this seems to come out of the blue, ask them or think about why they might have asked that . . . Don’t be weird about it and interrogate them, but try to get more information to become aware of your own signals. When I am crabby, my husband picks up on my mood much faster than myself. It is often a way for me to take a second to think if I need to take a moment for a break.

Use your sick days. This one is a slippery slope and obviously you don’t know when you might get sick. I once unexpectedly had to take a week and a half off when I stayed home with my daughter who had Hand Foot and Mouth Disease who then passed it on to me. Wasn’t planning to be home, but suddenly used up 7 of my sick days.

If you are planning on any maternity/paternity leave, unless you work in a magical school district, you most likely have to use your sick days to get paid and continue insurance (FMLA only exists to keep you from losing your job, it unfortunately does not give you a paid time off).

Think about how many days would make you feel comfortable keeping banked up. Keep those and try to use some of your remaining days.

If you are planning on retiring early, check to see if you get paid for any extra sick days. My guess is that you will not be paid for them. The payout is only a paid benefit for people who retire at typical retirement age within their district.

Challenge yourself to use your personal days throughout the year. Plan something fun or take the day and binge watch Netflix at home. It is so wonderful to take a Friday off some time in December. I love having a long weekend, just when the kids start to get really crazy before break.

No awards are given out for person who never uses their sick days. Find a happy place between never using any sick days and being seen as unreliable at work.

How to Systematically Plan to Quit Teaching and Retire Early

Hopefully you found some of this information helpful and can use it to find a way to replace your teaching income. Good luck in your systematic plan to quit your teaching job and retire early!

Your Turn . . .

Are you planning to quit teaching and retire early? Where are you in your plans? Good luck!