Pension Plan/Retirement Plan??

Discussion in 'General Education' started by DigitalDiva25, Mar 17, 2015.

  1. DigitalDiva25

    DigitalDiva25 Companion

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    Mar 17, 2015

    In your state, on average, how much money does a teacher who have been working for 25 years will receive each year after retiring? Do you guys think about if you will be living comfortably after retiring?
     
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  3. Missy

    Missy Aficionado

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    I think this will vary greatly from state to state. I won't make much because teaching is a second career for me, but we have invested well and my husband will have a good pension.
     
  4. DigitalDiva25

    DigitalDiva25 Companion

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    May I ask, what have you guys invested in?
     
  5. blazer

    blazer Connoisseur

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    In the UK teachers of my age (58) will get 1/80 of their final salary for each year teaching. So I should get (when I am 60) 28/80 of my salary (or about a third). I also get x3 of my annual pension as a tax free lump sum. I shall need to do a bit of subbing once I retire but on the plus side we can take our vacations at cheap times (outside the school holidays). When I am 62.5 I also get a pension from the company I worked for before teaching and at 66 get the Government pension that everyone gets in the UK (£6k per year). So by then I should be reasonably comfortable as I paid off my mortgage 5 years ago.
     
  6. blazer

    blazer Connoisseur

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    Teachers 5 years younger than me have the 'new' pension. 1/60 of their salary for each year in the job. But no lump sum and they don't get the pension until they are 68!
     
  7. DigitalDiva25

    DigitalDiva25 Companion

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    blazer, you said you should get about 1/3 of your salary, then you mentioned that you will also get the pension plan. I thought that the pension plan is suppose to be the part of your salary??
     
  8. Jerseygirlteach

    Jerseygirlteach Groupie

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    Ha! We just had a union meeting about this very subject. My lovely governor (and presidential hopeful) :rolleyes: is working hard to freeze and then eliminate teacher pensions this year and turn to a 401k type system. It would mean dramatic reductions in payouts for teachers and it is, by far the scariest and most depressing thing I've heard in a long time. :(
     
  9. DigitalDiva25

    DigitalDiva25 Companion

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    ^^^ooohhhh...that doesn't sound so good
     
  10. teacherintexas

    teacherintexas Maven

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    I have to teach 41 years before I'm eligle for full retirement. I can retire after 29 years, but they'd take 55% of my retirement as a penalty.

    I will be on a very limited budget when I retire.
     
  11. blazer

    blazer Connoisseur

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    My pension is calculated on my salary. They do a calculation over the last 10 years of my work to come up with an average salary figure (I beleive they use the best 3 years out of the last 10). Then for each full year I have taught (and paid into the scheme about 8% of my salary) I shall get 1/80 of that calculated salary. I plan to retire at 60 (I can take my pension at ay time after 55 but if I go before 60 it will be reduced). When I am 60 I shall have taught for 28 years so I shall get 28/80 of my salary as a pension. So roughly 1/3 of my salary. So let us say my final salary is £45k My pension will be approx £15k pa. In addition I will get a one off payment of £45k tax free to spend or invest as I wish.

    Yonger teachers have been trasnfered onto the new scheme. They get 1/60 of their final salary for each year worked. This looks a better deal except that they do not get the lump sum and they cannot take their pension until the are 68.

    When I started teaching I also took out an extra pension and paid about £150 per month into that for 22 years. I have just re-invested that sum into a bond that will grow over the next few years and then when I retire will give me an income. I now invest that £150 per month into another savings scheme to build up a fund ready for retiement.

    The pension from my previous job will not be touchable until I am 62.5. Everyone in the UK also qualifies for a Government p[ension based on a formula that takes into account number of years working (and paying tax) or number of years available for work if you have been unemployed. I shall qualify for that at age 66.

    I shall have to pay tax on my pension. At the moment I can earn about £12k tax free and then pay 20% tax on any amount over that. So any pension I receive above £12k pa will be taxed (although that may change for the better). If I work then I shall also have to pay income tax (20%) and National Insurance (about 6%) (this pays for Health Care or the NHS as we call it).

    If I get really lucky and my income goes over £50k pa then I shall move into the supertax bracket and have to pay 40% of anything I earn over £50k. I doubt that will happen!
     
  12. gr3teacher

    gr3teacher Phenom

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    Between a state retirement fund and a county supplemental retirement fund, I will end up getting 85% of the average of my five highest-paid years. My plan already is to retire after 30 years (when I'll only be 56), move to a cheaper state, and put in a few more years... maybe even long enough to vest in their retirement plan.
     
  13. blazer

    blazer Connoisseur

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    85% sounds very generous. The best a teacher over here could hope for is 50% if they got 40 years of teaching in!
     
  14. Go Blue!

    Go Blue! Connoisseur

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    My, how times (and the government) chnages things ...

    My Mother spent her entire career working for Newark Public Schools and just retired 4 years ago. Outsie of being paid very well by NPS (albeit, COL is very high where I am from); she was able to retire in her late 50s due to her pension.

    Now, she tells me how she wouldn't enter the teaching/social work profession if she were young now because of political issues.
     
  15. Missy

    Missy Aficionado

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    Well, we are very diversified. I probably should have said we started investing early and as much as we could. We live comfortably but drive our cars into the ground, don't spend money on designer clothes and don't have all the gadgets there are.
     
  16. DigitalDiva25

    DigitalDiva25 Companion

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    85% of the average of five highest-paid years? So let's say your highest paid years are $55,000 for five years. So that means $55,000 X 5 divide by 5 is $55,000, then 85% of that is $46,750. So you will get a total of retirement money of only $46,750?? Correct me if I'm wrong... :eek:
     
  17. mathmagic

    mathmagic Enthusiast

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    I'm guessing that that is probably a per-year amount.
     
  18. gr3teacher

    gr3teacher Phenom

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    Sorry, that's annual. If it were per year, I'd be hightailing it the heck out of the state.
     
  19. readingrules12

    readingrules12 Aficionado

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    Yes, I think about it a lot. You have some choice in this. Usually the best way to go for retirement is to realize $$$ needs to come from 3 places.

    1. Teacher retirement
    2. Other savings (my preference is the ROTH IRA)
    3. Social Security

    #1 and #3 you have limited control over except that it will in general go up the longer you work.

    I would look at #2 above strongly. A person can put up to $5500 in a ROTH IRA that when you take it out for retirement, it is completely tax free--including all the $$$ you make in investments from it. While one probably could survive on teacher retirement and social security--it could be a financial challenge.
     
  20. teacherintexas

    teacherintexas Maven

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    Most districts in Texas don't pay SS.
     
  21. gr3teacher

    gr3teacher Phenom

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    http://www.mass.gov/mtrs/docs/publications/ssahandout.pdf

    Massachusetts is one of a handful of “non-Social Security” states. This means that you, as
    a member of a contributory retirement system, pay into our system instead of Social
    Security; you do not earn any Social Security “credits” or “quarters” for your MTRS
    contributions or service. However, you may have earned Social Security credits through
    other employment. If you are eligible for Social Security benefits—either based on your
    own past employment, or your spouse’s past employment, you may be subject to one of
    two Social Security “double-dipping” laws, as outlined below.


    (I've looked into moving to Massachusetts before, so I've had this saved for awhile)
     
  22. readingrules12

    readingrules12 Aficionado

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    If this is the situation, then I would take that amount that I would normally pay into SS and put it into a ROTH IRA. Without SS, putting some $$$ away for retirement is really important. A pension just isn't enough.
     
  23. teacherintexas

    teacherintexas Maven

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    I have a 403(b). I think we'll start a Roth IRA after my step-daughter is 18. I totally agree. The pension I'm going to get is definitely not enough.
     
  24. DigitalDiva25

    DigitalDiva25 Companion

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    Annual income is what you will get per year...so you're going to get around $46,000 per year? That's pretty good I think...If I can get that after retiring, I can definitely still live comfortably.
     
  25. DigitalDiva25

    DigitalDiva25 Companion

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    So this money that teachers get that is a percentage of their highest income after retirement, what is this called? This is not the pension plan is it?
     
  26. gr3teacher

    gr3teacher Phenom

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    Oh no. Assuming that they actually give us annual step increases, I'll get around $80k a year. That's still well below the median income in my county, but it's living-well money in virtually any other county in America, and if you add in the possibility of still teaching for a few years, maybe even vesting in another state (starting a second career at age 57... it's possible, depending on how the state handles retirement), and add in getting to live comfortably without Social Security until those payouts are at their maximum, I should be spending large chunks of my golden years touring Europe.
     

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