Video about the future of retirement

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

  1. YoungTeacherGuy

    YoungTeacherGuy Phenom

    Joined:
    Oct 21, 2007
    Messages:
    4,224
    Likes Received:
    1,158

    Jul 9, 2019

    If you have 10 minutes, watch this video and share your thoughts with me.

    Makes me wonder what I’ll do if I have to work into my 70s. There’s no way I can keep this stride going until then.

     
  2.  
  3. mathteachertobe

    mathteachertobe Cohort

    Joined:
    Jun 20, 2011
    Messages:
    592
    Likes Received:
    118

    Jul 9, 2019

    I am actually hoping to work into my early 70s. The job you have now may not be one you would want into those years, but maybe you will have moved up into a central office position. Not to sound snarky, but those folks don't deal with the kinds of stress site-based positions do.

    The main retirement expenses they talked about were housing and health care. Do I remember that you bought a house a while ago? The best move I can think of for housing in retirement is to have a paid-off house. Health care, does your district provide any post-retirement benefits? Mine does, and that is a big part of why I am trying to get 20 years in before retiring. Many districts don't offer that though, so I'm not sure how to prepare for it other than factoring it into your expected monthly costs. (Medicare Part B has a monthly cost, for example.) Where people really go through their assets is if they require long-term care. That is also very hard to plan for, and for that I'm just hoping I need it for a very short time, if at all.
     
  4. YoungTeacherGuy

    YoungTeacherGuy Phenom

    Joined:
    Oct 21, 2007
    Messages:
    4,224
    Likes Received:
    1,158

    Jul 9, 2019

    I actually bought my first house 10 years ago. Sold it a few months ago and purchased a new one. I’ve been here about 2 months now.

    I’m going to start a Roth IRA. I got a 403(b) up and running a few years ago, but I need to get more aggressive with putting money aside.

    To be perfectly honest, I have no desire to work at the district office. I’d happily take a pay cut and go back to the classroom than work with adults all day long. Yuck.

    My district provides post-retirement benefits until the age of 65 (once Medicare kicks in).
     
    futuremathsprof likes this.
  5. whizkid

    whizkid Cohort

    Joined:
    Aug 13, 2016
    Messages:
    701
    Likes Received:
    298

    Jul 9, 2019

    This is what I'd like to see at pd if for no other reason than to have a discussion and not the same regurgitated topics. That's why I'm looking ahead and I probably won't retire for at least another 25 years. Get vested to collect my first pension, move into a public sector job for another, take SS at 62 and my ROTH will be my last asset I'll touch. At least that's the plan. Home and vehicles paid for. Stay in the best health possible. Might have a side hustle in the near future just add another level of financial backing.
     
    futuremathsprof likes this.
  6. whizkid

    whizkid Cohort

    Joined:
    Aug 13, 2016
    Messages:
    701
    Likes Received:
    298

    Jul 9, 2019

    I'm just the opposite.
     
  7. whizkid

    whizkid Cohort

    Joined:
    Aug 13, 2016
    Messages:
    701
    Likes Received:
    298

    Jul 9, 2019

  8. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 9, 2019

    This is why I keep telling teachers to save more for retirement! Seriously, people. I keep hearing on here how teachers are “not in it for the money” and they are just going to rely on their teacher pensions and Social Security. Guess what? Your teacher pensions are not enough. For example, I already showed one poster on here who teaches in VA that instead of getting $5,000/month pre-tax like they thought they would in retirement that they will actually being getting $2,550/month (if their average final compensation package is $60,000 and they work 30 years with the district) OR $1,700/month pre-tax if they work 20 years with the district. That’s practically nothing and with the rise in inflation, they won’t be able to survive on that in the distant future. If those people don’t have a home that is paid off by then and they have to rent and have medical problems, then they will struggle immensely until they die...

    Most people aren’t aware that if they save just $100 per month and put that money into a Roth IRA (which grows at an annual interest rate of 7-9% historically) from the age that they are 25 to 65 that they will have over $1,000,000 in retirement (assuming only 7% interest). The scary thing is if that same person waits until they are 35 (so just a difference of 10 years) to start saving $100/month at the same rate, that they will only have $300,000 in retirement! That’s a loss of $700,000 for waiting only 10 years, which is huge.

    People, save while you are young because you have time on your side. In my situation, I’m literally saving 50-70% of my income (and I’m 27) because I don’t want to be one of these old people who cannot afford housing and have to ration food and medical supplies. I want to retire with dignity and I will. Yes, I had to give up most of my 20’s to pay off debt and save (student loans, check; car loans, check; credit cards, check; emergency fund, check; stocks, check; etc), but it will pay off for the rest of my life. I will be able to retire at 50 or sooner (most likely sooner at this rate) and I won’t even have to touch my Roth IRA for YEARS.

    I don’t want to have to work until my body completely gives out on me. What kind of life is that? Start investing if you haven’t. Don’t solely rely on your teacher pension. Chicago teachers are doomed right now, New Jersey teachers are well on their way to becoming the next Chicago, and California teachers are becoming New Jersey (we have over a $97.2 billion deficit with our state teacher pension system). Major teacher reform is GOING to happen and teachers need to protect themselves because their benefits are going to be slashed at some point. The programs are largely insolvent.

    So, put money in savings, put money in a money-market account, buy stocks (index funds), buy government-backed bonds, open a Roth IRA that has minimal fees and that invests in mutual funds, and closely follow the markets. Last but not least, look into Bitcoin and other cryptocurrencies — I’ve already made a $9,200 ROI in a couple of months!

    Don’t get complacent. Be smart with your money, make risky investments when you are young and more moderate and conservative investments as you age. Don’t. Just. Rely. On. Your. Teacher. Pension. Hopefully, by the time you retire you have multiple investment vehicles, so that you don’t have to worry. Mark my words, you will regret it when you are older (especially you young folk in my age group) if you make the mistakes that so many others before you have made.
     
    Last edited: Jul 10, 2019
    whizkid likes this.
  9. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 9, 2019

     
  10. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 9, 2019

     
  11. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 9, 2019

     
  12. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 9, 2019

     
  13. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 9, 2019

     
  14. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 10, 2019

    Early 70’s?! Yikes.
     
  15. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 10, 2019

    How old are you now and how old will you be when you plan to retire? If you are in your 30’s, why did you wait until now to start investing, especially with your level of income?

    Please note: I do not mean to sound judgmental or abrasive here. I genuinely am curious about your situation, provided that you are willing to share, of course.

    Thank you for your time.
     
  16. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 10, 2019

    Hm, “unsustainable pension promises” seems to be a common theme here. This is why I advocate that districts should pay teachers more NOW and less benefits when they retire because said benefits are getting cut or diminished anyway. It’s a double whammy. Think about it: You are paid less throughout your career and then you have a meager retirement and not the benefits that you were promised.

    That’s why I don’t like teacher unions because they keep bargaining for long-term contracts that districts and state cannot afford. It would make more sense to pay teachers a higher salary and have them invest the difference in the stock market and in a Roth IRA then just CalSTRS and other STRS’s...
     
  17. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 10, 2019

    Invest at least 30% of your take-home pay and you will “sit really pretty” once you retire.
     
  18. mathteachertobe

    mathteachertobe Cohort

    Joined:
    Jun 20, 2011
    Messages:
    592
    Likes Received:
    118

    Jul 10, 2019

    I am actually hoping to work into my early 70s. The job you have now may not be one you would want into those years, but maybe you will have moved up into a central office position. Not to sound snarky, but those folks don't deal with the kinds of stress site-based positions do.

    Well, I can see that to someone in their 20's that might seem depressing, but I'm about to turn 60 and have only been teaching for 8 years. I am currently healthy and actually love my job, so sure, I hope to teach another 10 years or more. This is my third career, and the one I have gotten the most enjoyment and satisfaction from.
     
  19. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 10, 2019

    Do really want to work your whole life though, practically? What if you your health turns for the worst (hopefully never)? That means you will have worked your entire life. I’d rather work to live and not live to work.

    I, myself, want to vacation constantly and don’t want to work until I’m too old and feeble to do anything, haha! I am going to probably invest even more heavily because my financial advisor said that I could retire in my mid forties if I play my cards right. I was like, “Sign me up!”
     
  20. mathteachertobe

    mathteachertobe Cohort

    Joined:
    Jun 20, 2011
    Messages:
    592
    Likes Received:
    118

    Jul 10, 2019

    I travel, have raised kids and enjoy my free time. Working does not mean you can't do other things, especially when you have weeks off at a time. Retirement looks kind of boring, compared to my job, which again, I love. Why wouldn't I work as much of my adult life as possible? I honestly feel that through my work I make a positive impact on my community. In retirement, I'm not so sure that will be the case, certainly not to the extent I am now.
     
    bella84 and futuremathsprof like this.
  21. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 10, 2019

    Very true. And not to be a contrarian, but the years and years of service you’ve devoted yourself surely has made a positive impact in your community. That won’t end just because you retire as the lives you’ve impacted will flourish thereafter.
     
    Last edited: Jul 10, 2019
  22. Ima Teacher

    Ima Teacher Maven

    Joined:
    Oct 25, 2005
    Messages:
    5,431
    Likes Received:
    952

    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.
     
    futuremathsprof likes this.
  23. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    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!
     
  24. Ima Teacher

    Ima Teacher Maven

    Joined:
    Oct 25, 2005
    Messages:
    5,431
    Likes Received:
    952

    Jul 10, 2019

    I’ll be 49 in September. My husband was 50 in February.
     
    futuremathsprof likes this.
  25. bella84

    bella84 Aficionado

    Joined:
    Jul 20, 2012
    Messages:
    3,429
    Likes Received:
    1,396

    Jul 13, 2019

    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.
     
    mathteachertobe likes this.
  26. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 13, 2019

    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.
     
  27. bella84

    bella84 Aficionado

    Joined:
    Jul 20, 2012
    Messages:
    3,429
    Likes Received:
    1,396

    Jul 13, 2019

    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
  28. bella84

    bella84 Aficionado

    Joined:
    Jul 20, 2012
    Messages:
    3,429
    Likes Received:
    1,396

    Jul 13, 2019

    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.
     
  29. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 15, 2019

    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.
     
  30. Ima Teacher

    Ima Teacher Maven

    Joined:
    Oct 25, 2005
    Messages:
    5,431
    Likes Received:
    952

    Jul 15, 2019

    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.
     
  31. futuremathsprof

    futuremathsprof Aficionado

    Joined:
    Jun 27, 2014
    Messages:
    3,873
    Likes Received:
    1,081

    Jul 15, 2019

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

    Ima Teacher Maven

    Joined:
    Oct 25, 2005
    Messages:
    5,431
    Likes Received:
    952

    Jul 15, 2019

    That’s a good question.
     
    futuremathsprof likes this.

Share This Page

Members Online Now

  1. Backroads,
  2. blazer
Total: 450 (members: 4, guests: 427, robots: 19)
test