Video about the future of retirement

Discussion in 'Teacher Time Out' started by YoungTeacherGuy, Jul 9, 2019.

  1. Ima Teacher

    Ima Teacher Maven

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    Jul 10, 2019

    DH and I went to see how we would be doing if we retire with 27 years, 30 years, or at age 55. We wanted to see which would be best for us financially. We know age 55 is the highest paying option, but we wanted to see exact numbers. There isn’t much difference between 27 and 30 years, but there was enough difference to get us to age 55 that we are planning that route.
     
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  2. futuremathsprof

    futuremathsprof Aficionado

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    Jul 10, 2019

    Age 55 is still a pretty good age at which you can retire! I wouldn’t scoff at that. And how close are you to age 55? :) Pardon my asking, please.

    I’m excited for you! I hope you tell us all about your fun adventures in retirement!
     
  3. Ima Teacher

    Ima Teacher Maven

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    I’ll be 49 in September. My husband was 50 in February.
     
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  4. bella84

    bella84 Aficionado

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    Jul 13, 2019 at 5:11 PM

    Not sure of your purpose for posting this video, but the Show-Me Institute is a biased think tank. It's one opinion, sure, but it's important to note that the information in this video is not 100% fact. When presenting information, all sides should be presented... or there should at least be a disclaimer made.

    I'm not suggesting that you should have known this, FMP, because you are not in Missouri. That's why I'm being sure to state it here. Take it with a grain of salt, not as a cut and dry case for teacher pensions being a bad thing.

    I've read an article written by this guy recently. What he is suggesting has some truth to it, as far as administrators possibly getting out of it more than they put in. He also notes that it's not a good system for people who don't stay in the teaching field. I don't know... In my opinion, I don't have a problem with it benefiting the people who teach for 30 years while not benefiting those who leave at less than 5 or even 10 years. It's incentive to stay in teaching. Seriously. Knowing that I'll have this pension is one of the, if not *the*, top motivating factors keeping me in teaching, specifically in the state of Missouri, because I know that we have a good pension system compared to other states. This is true even when the rest of the state is compared to our two metropolitan cities - Kansas City and St. Louis... I would never go back to working in one of those two cities, simply because they have their own pension systems and they aren't nearly as good as the state-wide system. If those districts could just get into the state-wide pension system, they'd really solve a lot of their problems with turnover and finding high-quality teachers. He's right when he says that we want them to leave our pensions alone. It's working out just fine for the majority of us here in Missouri, and we don't need anyone messing with it.

    Also, I do take issue with his comment that he left half of his money in the system when he left teaching, before he was vested. That's simply false. In Missouri, if you leave the pension system before you are vested, they hold onto your money for up to five years. If you haven't returned to the system at that point, then they automatically refund you all of YOUR contributions - 100%. The "half" he is referring to is the matching contribution that was made by his school district. In Missouri, school districts and employees each pay 14.5% of the salary into the pension system. This is how we keep the system so well-funded. Despite the school district's contribution matching his salary contribution, that was never his money to begin with. It was the legally required contribution that the school district had to make. He's really spinning the situation to suit his argument here.
     
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  5. futuremathsprof

    futuremathsprof Aficionado

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    Jul 13, 2019 at 9:10 PM

    Actually, what he said is true. You do get back what you put in if you leave the system before 5 years, but you forfeit the contributions the district or state made on your behalf. If you had a 401k, you would get to keep what your employer contributed even if you left the company early. I think that is the point that he and others are making.

    And having a system that is better than most other states is great, but it is still underfunded. And the deficit keeps widening.
     
  6. bella84

    bella84 Aficionado

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    Jul 13, 2019 at 9:14 PM

    Yeah, I know that's what he is saying, and I know that's how a 401K works. But that's not the intent of the public school retirement system. The contribution isn't made "on the behalf" of the teacher. It's just the way that Missouri ensures the retirement system is funded. It's not going into any one teacher's account. It's just to fund the system as a whole, and they're very up front about that. Anyone who enters the system under the assumption that it works like a 401K hasn't done their research or is fooling themselves. It was never his money, and he didn't leave it behind. It was the school district's money, and it became the pension system's money, and it will become retirees' money.
     
    Last edited: Jul 13, 2019 at 9:20 PM
  7. bella84

    bella84 Aficionado

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    Jul 13, 2019 at 9:16 PM

    Adding that Missouri doesn't fund the system in any other way, unlike some states. Our state budget allocates absolutely no money towards the pension system. No tax dollars go directly into it. Nothing. It's simply funded by teachers and school districts. The contribution of the school districts is determined by the salary dollars they are paying their teachers.
     
  8. futuremathsprof

    futuremathsprof Aficionado

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    Jul 15, 2019 at 1:54 AM

    I’ll also put this here for anyone who says a teacher making less than $50,000 can’t retire as a multimillionaire:



    I hope that this gives you hope, but you must start early to start accruing this.
     
  9. Ima Teacher

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    Jul 15, 2019 at 6:53 AM

    Ours is the same way. It is totally funded by teachers. That’s a big part of why we were so mad when the government borrow from the pension, then didn’t pay back and started trying to make sweeping changes to the system because it was underfunded, which it was NOT before they borrowed.
     
  10. futuremathsprof

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    Jul 15, 2019 at 8:20 AM

    Why is the government even allowed to borrow from retirement funds in the first place?
     
  11. Ima Teacher

    Ima Teacher Maven

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    Jul 15, 2019 at 10:49 PM

    That’s a good question.
     
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