Teachers Day 2025: Do You Work In A Private School? Here’s How To Prepare For Retirement

As India celebrates Teacher’s Day today (Sep. 5), it is the perfect time to consider the financial well-being of educators. Many private school teachers lack formal retirement security, while government school teachers enjoy the benefits of pensions and retirement plans.

According to a recent report, around 20,000 teachers from Bhubaneswar’s unaided schools and colleges are planning to stage protests. Their demands include equal pay for equal work and better service benefits.

However, there have been some encouraging developments too. In 2023, the Employees' Provident Fund Organisation (EPFO) asked all CBSE-affiliated schools to register under the EPF and Miscellaneous Provisions Act, 1952.

This ensures social security benefits, including provident fund payments, retirement or disability pensions and financial support for dependents in the event of death, to teachers in these schools. Though this is a positive step, not all private schools are covered. As such, most private school teachers should plan for their own retirement.

Teachers can make modest, regular investments to start early. The power of compounding allows even small deposits to increase manifold. A solid foundation can be established over the course of 20 to 30 years with a monthly SIP (Systematic Investment Plan) in mutual funds or recurring deposits.

One should make the most of their EPF contributions. It is important for teachers who fall under the ambit of EPF to make consistent contributions. Also, teachers must refrain from withdrawing the money for unforeseen expenses, as that would lower the eventual retirement corpus.

Opening a Public Provident Fund (PPF) account as well in addition to EPF will help. It offers tax advantages, long-term safety and guaranteed returns. One can also opt for the National Pension System (NPS). It is a government-sponsored retirement plan that invests in both debt and equity.

Thus it strikes a balance between growth and safety, and helps in the development of a stable retirement fund. In addition to the Rs 1.5 lakh cap under Section 80C, one can receive an extra deduction of up to Rs 50,000 for NPS.

Do not miss out on a health insurance plan. Savings can be rapidly depleted by medical costs. Teachers at private schools should prioritise getting health insurance and, for further security, even look to top-up policies.

Another thing to keep in mind is to expand the portfolio beyond fixed deposits. Fixed deposits may seem secure, but over time, inflation would reduce their value. So balance them with alternatives like bonds, index funds and equity mutual funds.

On this Teacher’s Day, as the country recognises the vital role that educators play, it is equally important for teachers, especially those who work in private schools, to concentrate on becoming financially independent in retirement. One can ensure a safe and comfortable future with a disciplined approach.