So glad I got a raise so I an afford the raise in taxes!

Discussion in 'General Education' started by oneteacher, Sep 30, 2016.

  1. oneteacher

    oneteacher Rookie

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    Sep 30, 2016

    I am so frustrated today. I got my first paycheck from the new contract year. I have been looking forward to this paycheck because I was expected about $200 more each month. That was a BIG mistake. I did get a raise, however, FICA, fed income tax, and state income tax increased, too. My raise amounted to not much at all. I am considering other states to move to that pay teachers more money. My only concern is that the cost of living would increase (it relatively inexpensive to live where I am) and therefore I wouldn't get any further ahead in a different state.

    What do you all feel about your wage? Is it a sufficient single income for a family of 5? I don't need specifics, just generalizations.
     
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  3. teacherintexas

    teacherintexas Maven

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    If you can find a place with high salaries and low COL, then it would be worth a move. (And let me know where that is!)

    I couldn't comfortably support a family of five on one salary, but in reality, I imagine there are few careers that can support families on one paycheck these days. I could probably make it if I lived in a bad neighborhood and only shopped at garage sales. Medical insurance for a family would eat up too much of my salary.

    Try the larger cities in your state. I'd make almost 10k more a year if I moved to an urban area.
     
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  4. Bunnie

    Bunnie Devotee

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    Oct 1, 2016

    Honestly I don't think any teaching job in general is going to pay enough at the start or even down the road to support a family of 5 as a single income.

    I say this as someone who lives and works in an expensive city with a pretty decent salary by most people's ideas and I think it's just enough to support myself and maybe a child if I were a single mom. I'm single without a family though. However some of my coworkers make a less less than me, about 10k less, and are married with families (one or two kids) and live in the burbs and none of them could afford to support their family solo, and barely scrape by with their spouses salary helping.

    I think it's all relative to how you spend your money. My salary could go a lot further if I moved out of the city, but I pay a premium to live in the location I want to live in. Some people have student loans, car leases, daycare, mortgages, etc. It's all about living within your means.

    I'm literally making double than what I was a few years ago when I was in private school, but I only feel a little more comfortable financially with having extra money. I'm able to contribute to my districts version of a 401k and not live paycheck to paycheck anymore.
     
  5. oneteacher

    oneteacher Rookie

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    Oct 1, 2016

    We try to live pretty simply, but I am still living paycheck to paycheck. Our district pays 100% of the premium for our health insurance, but the deductible is high. If we every had a medical emergency, it would still hurt us financially. I've heard in Alaska the wages are pretty high. Anyone here in Alaska?
     
  6. a2z

    a2z Virtuoso

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    Oct 1, 2016

    FICA, fed income tax and state tax are a percentage of your income, so the amount taken out would increase when your gross income increased. That is not surprising.

    However, if you end up getting any sizable return each year, you could change your deductions a bit to have more go into your paycheck. FICA won't change because that is fixed, but many times more fed and state taxes are taken out than you need taken out.

    I don't know many types jobs in my area that you can raise a family of 5 comfortably on one income.
     
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  7. a2z

    a2z Virtuoso

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    Oct 1, 2016

    I agree with this.
     
  8. swansong1

    swansong1 Virtuoso

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    You could look into states that don't have a state income tax and see if they would be good possibilities for new jobs. At least it would help you narrow down your search.
     
  9. Tyler B.

    Tyler B. Groupie

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    Oct 1, 2016

    As a teacher, you should have access to a 403b tax deferred investment plan through your district. When I get my raise each year, I just up my contributions to my 403b. Since the contributions are pre-tax, you don't pay any taxes on your contributions and they have the effect of lowering the income the feds and states see.
    The result is basically free money: your income is cut (because you put money into savings), but so are your taxes. You have the same amount of money in your pocket as someone who didn't contribute to a 403b.

    Try to put your contributions into an index fund and avoid Tax Shelter Annuities since they have the highest fees.
     
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  10. readingrules12

    readingrules12 Aficionado

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    If you look at the breakdown of your pay, you'll see that most of the tax increase for you was probably Fed income taxes and FICA. Moving won't solve this problem. These are federal taxes that hits everyone in every state.

    Possibly they are taking out too much in taxes. You might have someone take a look into that.
     
  11. catnfiddle

    catnfiddle Moderator

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    Lots of good information and advice here. Definitely check your exemptions to see if you're having too much withheld each pay period. If that isn't it, and if your state / local taxes are the culprit, maybe a move might be in order. I know my local taxes are higher than if I lived just a block to the north (different city).
     
  12. jadorelafrance

    jadorelafrance Cohort

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    Oct 2, 2016

    Oh man. I left a job to make 11k more than I was making and you know how much of that 11k I actually saw? 6k. I didn't realize when I moved I would have to pay into FICA (didn't have to in my old state) and much more in healthcare (thousands more). Plus I have to pay into my pension myself (old district board paid - only very little came out of our salaries). It was very upsetting. I also pay much more in rent than I used to since now I live alone and the standard of living is higher. I also was expecting around 70/paycheck raise for this year. You know how much I actually saw? 40. Yep.
    I also apparently don't pay enough in taxes to the state because I always seem to owe hundreds in april but at this moment since my raise was so small I can't afford to contribute more because my rent went up too.
     
    Last edited: Oct 2, 2016
  13. bella84

    bella84 Aficionado

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    I guess I'm on the opposite side of all of this... I took a pay cut of about $2,500, compared to the last position I held in this geographic area, when I accepted my new position. I was expecting my paychecks to be much smaller, but it turns out that they are nearly identical, if not slightly more, than they were at the last school. This is obviously a nice surprise. The downside is that they are still much less than I was making in another state last year, but the cost of living was much more there, AND we didn't get paid over the summer... not to mention the fact that I now have a car payment to factor in.

    I'm single with no kids. I can barely support myself and my two furballs on what I make. It takes about one of my two full paychecks per month just to pay my rent, utilities, car payment, and auto insurance. I get by with a little bit of help from family every now and then, but there is no way that I could support a family of five on what I make... I'm not even sure that I could support a family of two... and I really don't even think I make that little.
     
  14. oneteacher

    oneteacher Rookie

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    Oct 4, 2016

    Thank you all for your input. I am going to look into changing my deductions. With 3 children, I do get a sizable return each year.
     
  15. TeacherNY

    TeacherNY Maven

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    Oct 5, 2016

    If you live paycheck to paycheck you have to make a budget. List all of your current bills. There's bound to be something you can cut (you don't REALLY NEED cable, etc. do you)? I agree with putting more money in your retirement plan but if you're wasting money every month then you won't have any to spare.
     
  16. TeacherNY

    TeacherNY Maven

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    I also don't think people realize they have to make a budget BEFORE they buy a house, have kids, buy that NICE car, etc. They just go about things willy nilly then complain they can't live on what they make. I'm really confused on how people survive that way.
     
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  17. teacherguy111

    teacherguy111 Cohort

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    I always feel like I don't have enough but I have also read a study that showed that the place I work (central Ohio) is the best place in America to be a teacher when you compare wages to living expenses.
     
  18. CameronWetton

    CameronWetton Rookie

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    Nov 30, 2016

    Either start a 403b or up your contributions to your current plan. This is a way to reduce your taxable income and get you into a lower tax bracket all while saving money on a tax deferred basis. I will be happy to show you how to utilize these properly as it is my market. I am a CA financial planner specializing in the 403b market. Contact me for some help.
     
  19. waterfall

    waterfall Virtuoso

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    Nov 30, 2016

    Oh so true! I am from Ohio and both of my parents are teachers. My mom works at a private school that pays peanuts, but as a public school teacher my dad makes an extremely good salary and the COL is very low. I'm an only child, so that certainly helped, but we lived very comfortably on basically just my dad's salary. My mom didn't work FT for most of the time when I was growing up, and when she did start working that money went to charity, vacations, and my college tuition so it wasn't just added into the regular bills. I'm definitely not sure that would be the same for a family of 5, even if you lived very frugally.

    Although I certainly didn't think I would get rich, I went into college thinking I was going into a pretty stable career. I now live in a different state and teachers do not have it good here! Housing alone here is 4-5x more expensive than OH and of course everything else is more expensive too, and we actually make lower salaries! My dad makes about 35K more than any teacher at the top of their salary scale would ever make here. Of course when I complain about this, my friends here say, "Yeah, but you would have to live in Ohio..." It's all relative I guess. I'm single with no kids and I get by, but I do worry about money. I do love living here and at this point, more money isn't enough of an incentive to move back to my home state, but I do worry that there will come a point where I just can't afford to stay here anymore. The COL rises rapidly by the year and our salaries are stagnant.
     
  20. czacza

    czacza Multitudinous

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    Nov 30, 2016

    Our yearly incremental raise is often offset by increased required payments into our pension and healthcare in NJ.
     

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