Underfunded Teacher Pension Systems

Discussion in 'Teacher Time Out' started by futuremathsprof, Oct 20, 2019.

?

Are you worried about retirement?

  1. Yes

    33.3%
  2. No

    33.3%
  3. Not sure.

    0 vote(s)
    0.0%
  4. Maybe.

    0 vote(s)
    0.0%
  5. Kind of.

    33.3%
  1. futuremathsprof

    futuremathsprof Aficionado

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    Oct 20, 2019

    Please visit the following link to see how your state fairs: https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/A034BAA0-02E2-11E9-B37D-3CE90D27BEE0

    Places likes New Jersey, Colorado, Mississippi, and Illinois are in BIG trouble. I would hate to be a teacher reaching retirement age in those states... These numbers are frightening.

    This is why it is important to have multiple revenue streams (Social Security, traditional/Roth IRA, HSA, stock funds, savings, AND your teacher pension) by the time you retire.
     
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  3. futuremathsprof

    futuremathsprof Aficionado

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  4. geoteacher

    geoteacher Habitué

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    My state is extremely well funded, so no, I'm not worried. DH and I have also been investing all long.
     
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  5. Ima Teacher

    Ima Teacher Maven

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    Kentucky WAS funded until the government borrow against it and didn’t repay it. I’m close to retirement, so I’m not worried. New teachers should be worried. We have had four or five teachers with under 10 years leave for non-teaching work due to the retirement situation.
     
  6. bella84

    bella84 Aficionado

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    This is misleading. The report is taking into account ALL pension systems within a state, not just the teacher retirement system. For example, it states that Missouri is 77% funded. However, if you dig into the details, the report states that the Missouri teacher pension system (PSRS) is actually 82% funded. My assumption is that they are taking an average of all pension systems within a state. That's fine, if that's the data you are looking for. But, if you're focusing specifically on teacher pension systems, then that list doesn't give accurate data.

    Regardless, you are correct that Illinois teachers are in trouble. Chicago has its own pension system, and it's no better than the system that the rest of the state pays into. Retirement was a major factor in my decision to leave Illinois and withdraw my contributions from the systems.
     
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  7. futuremathsprof

    futuremathsprof Aficionado

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    Awesome! Which state do you teach in? I can’t remember which.
     
  8. futuremathsprof

    futuremathsprof Aficionado

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    You, my friend, are fiscally savvy and smart. Good decision on your part.
     
  9. futuremathsprof

    futuremathsprof Aficionado

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    What if the system goes broke? In New Jersey at one point, it was estimated that if they didn’t reduce benefits from Platinum to Gold that the whole pension system would go broke in less than 10 years. I don’t see how you can’t be worried.
     
  10. TeacherNY

    TeacherNY Phenom

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    I work in a private school so I have a 403b retirement plan. I contribute a certain % of my salary and my school matches it and also adds a certain amount per year. I am going to contribute more and also look into other investment plans. I definitely think by the time you retire you should not have debt. Our house will hopefully be paid off 10 years before we retire. Maybe earlier.
     
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  11. futuremathsprof

    futuremathsprof Aficionado

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    This sounds like a feasible plan. Well done!

    At what age do you plan to retire? How many more years do you plan on working? What other investment vehicles do you plan on starting/utilizing?

    I have a 403b and Roth IRA, plus stocks. Right now, the Roth IRA is fully funded at a max $6,000/year contribution and the 403b is fully funded at a max $19,000/year contribution. Since I have a private tutoring business, I just opened a SEP IRA and I contribute tens of thousands into that on top of what I already contribute. I anticipate that I will easily be a millionaire by my early 30’s. :)
     
  12. Backroads

    Backroads Aficionado

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    Looks like Utah's okay.

    I'm vaguely worried about retirement mostly because that's how I am. I have my pension, we invest, Husband and I both have IRAs, so it's not like we're being completely irresponsible...
     
  13. TeacherNY

    TeacherNY Phenom

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    over 20 years to go. My husband is considering a financial planner so we will see.
     
  14. swansong1

    swansong1 Virtuoso

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    I guess we planned well for retirement. Our monthly income now is greater than it was when we were both working.
     
  15. TeacherNY

    TeacherNY Phenom

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    How'd you do it?
     
  16. swansong1

    swansong1 Virtuoso

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    Luckily, my husband spent 30+ years in a profession that matched the max contributions he could deposit. We lived frugally while raising our kids and just put aside as much as we could.

    And the stock market did pretty good. (Or should that be well?)
     
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  17. Backroads

    Backroads Aficionado

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    (she must be retired from teaching if she doesn't know... you know how those retired teachers are...) ;)
     
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  18. futuremathsprof

    futuremathsprof Aficionado

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    Oh yeah, aw yeah! You did it right, my friend. I’m so happy for you! :D

    Enjoy that retirement, but please stay retired. Have fun!!!
     
  19. futuremathsprof

    futuremathsprof Aficionado

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    [​IMG]
     
  20. Ima Teacher

    Ima Teacher Maven

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    If the absolute ONLY thing we had was state retirement, and the retirement system was in worse shape currently, it might be more concerning. However, I did make a few other provisions. Plus, there are always “what if” people making predictions based on lots of different factors. It’s a concern, sure, but not something I’m going to dwell on,
     
  21. futuremathsprof

    futuremathsprof Aficionado

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    This is fair with the exception of the what-if part. It wasn’t and has not been a state of what-if in many states. This actually happened in a Chicago and other local municipalities. Take my New Jersey example, a few years ago the teacher pension fund had roughly $89 billion in it with a $9 billion/year payout. Within ten years it would have gone completely broke if no pension reform was put in place. Just scary.
     
    Last edited: Oct 23, 2019
  22. vickilyn

    vickilyn Magnifico

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    Doesn't sound as if there was much "guessing" involved in your planning - well done!
     
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  23. swansong1

    swansong1 Virtuoso

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    Trust me...we're finished!!!
     
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  24. TeacherNY

    TeacherNY Phenom

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    Our HR director is sending us emails about it being Retirement Planning Week. I haven't read all of the tips yet but I'll post if I see anything that looks useful.
     
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  25. futuremathsprof

    futuremathsprof Aficionado

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    Please keep us updated.
     

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