To preface this conversation, I work at a private school in CA (as most of you know) and so I still pay into Social Security, but my public school counterparts pay into CalSTRS and aren’t required by state law to pay into Social Security. Also, they most likely won’t be able to collect SS in retirement, but I will since I work at a private school. I also know that a number of them something like pay 2% of their gross pay to their teachers union, whereas I don’t because I am an at-will employee and don’t have a teachers union to represent my interests. I largely do that myself. I’m also wondering, as a percent breakdown of your total pay (so just the percentages), what else do you pay? Do you have to pay for your healthcare? Vision? Dental? (My employer pays 100% of my healthcare plan and I pay like $28/month for both vision and dental — a nominal fee.) If so, how much? As a percentage of your gross monthly income (notice I said percentage), how much is your take-home pay? Is there a fixed percentage across the board for how much you have to pay per category? Does it depend on the district, mostly? CA teachers, in particular, what are the answers to the above questions? The reason I’m asking all of this is because I recently spoke with my public schoolteacher friends about our contracts for the 2019-2020 year and we were wondering how each of ours differ. I just don’t know and the information I am finding online isn’t entirely helpful. Thank you for your time! And other teachers outside of CA are welcome to respond, too!
I can give you monthly approximations for my items in Kentucky. $45 health insurance (top policy) $35 vision (top policy) $15 dental ( bottom policy) $40 critical illness (carry myself and DH) $150 mutual fund $15 cancer lump sum $125 long-term disability $150 whole life & term life $18 KAPE (education association—we are non union) $150 month into a flexible spending account We do not pay into social security, but we pay a percentage of our salary toward Medicare. We also pay a percentage to Kentucky Teacher Retirement. It may be like 1.5% and 2.5%. My DH carries similar policies in a different district. He adds an accident policy for himself and me, plus a cancer policy for both of us. It is cheaper for each of us to carry our own policies in most cases. We both just switched to a different policy for disability insurance. We are on a 5 year policy for people who are close to retirement. By the time I take all that out, plus federal, state, and local taxes, I’m clearing about $2900 a month. DH is almost the same. He is in a similar sized school, but a much larger district. My district has one public middle school. His district has five public middle schools. There is also a community independent school, a catholic school, and a university-affiliated private school. Again . . . approximations because I am working from memory.
Wow, thank you so much! It’s interesting to see just how much is taken out. I don’t have nearly as much taken out, it seems, as public schoolteachers. I am hoping that other AtoZ members chime in. Thanks again!
We pay an absurd amount of money for healthcare, something like $180/paycheck for 20 paychecks. It does include everything including life insurance (which is 3x my salary), vision, and dental but it is the best healthcare I’ve ever seen. I literally pay nothing (sometimes $5 for a specialist) when I go to the doctor. I rarely go, so it’s great for people who are sick all the time, I decided this year to take full advantage of it and have been going to an acupuncturist (among other doctors/specialists) weekly and I pay nothing and it is wonderful. The price will probably never go back down, since our governor changed the laws so it is required to pay a certain amount (it’s not dependent on districts and their budgets - we used to pay nothing), however districts around the state are beginning to now negotiate healthcare contributions since the law sunset. I pay a lot in union dues, probably around #1500/year. I think that’s absurd too. Our union does negotiate well for us though. I pay into a 403b which is elected, so yeah that’s fine. I pay around 7% into my pension. It used to be almost double that in my previous state. However, I have finally decided to take that money out of my pension in my previous state since I never plan on teaching there again and will roll it over into my 403b. It is nice that we can get that money back at least. I also can buyback my years of teaching in my former state and be vested in this state’s pension. When I start my new job, I will be in another pension system and will have two pensions when I retire. In my new job (non-teaching) insurance will be much cheaper. There’s like 73728364 plans to choose from and I know nothing about insurance, so I’m sooooo overwhelmed! I also will see a significant raise now and overall throughout my career. I pay into SS too which is whatever everyone else pays, so I will get that in retirement. I also have many options for other retirement plans (401ks, other tax shelters, etc. With employer contribution). Overall it’s not too bad. Could be worse.
It's amazing how people would take that money and stick it in the bank and not realize they'd have 60 days to roll it over into another retirement plan or pay early withdrawal penalties plus taxes.
I think it’s great that you get such great healthcare. I’m of the firm belief that teachers deserve the very best when it comes to healthcare as we are exposed to serious germs all the time from students. And you do contribute a lot — incredible! And I also think it is fantastic that you have multiple pensions coming your way. You’ve been very smart about saving for retirement. Though, I wish you didn’t have to have so many deductions...
Well I likely won’t have as much with my new job...and the increase in salary will help. And thanks! I have a lot to think about. I’m set for retirement and the future for the most part, it’s the present and near future I’m not in the greatest shape with. I keep spending all my money on vacations and clothes! Lol
I, too, started scaling back my spending this past year to save more to retirement and my housing fund. I will still enjoy myself thoroughly, but I want to have millions in retirement and so I have to make the necessary sacrifices now so that that happens. Buy blue chip stocks, high-dividend-paying stocks, and Bitcoin (BTC)! Lol!
True! Also real estate is really the big money-maker, but you also have to have money to put into it in the beginning. I saved 10,000 for the summer (since I don’t get paid then), but I’m beginning work in July, a couple of weeks after school ends so I intend to save all of that since I won’t really be traveling (except to see family before i start). It’s a start!
Nice! Great job with the saving — you’re very fiscally savvy. Are you on a 9-month or 10-month contract? I like how in public schools that teachers get paid monthly and all of the summer pay at once, in certain instances. I could invest so much if that happened to me because I would just pay three months work of bills and then enjoy/save/invest the rest!
I'm a public school teacher in California. Currently I pay about 14% of my total pay in CalStrs, about 2.4% into an optional life insurance policy and about 1.8% goes to the union. I don't pay anything for health, vision or dental. I paid into Social Security for more than twenty years before going into teaching, so I should collect something from them when the time comes, although the amount will be reduced by some percent once I start collecting my teacher's pension. My mortgage is paid off, so all in all, I am in reasonably good financial shape.
You are in awesome shape financially! A job very well done! I wish I had a fully paid-off mortgage. I’m still saving up for a down payment.... Now, is the 14% mandatory or did you elect to contribute that much?
The 14% is before taxes and mandatory. My district also contributes on my behalf to CalStrs, and they pay more than I do. I don't contribute any additional money to retirement from my paycheck. I do make annual contributions to my Roth IRA, but I do that on my own.
You don’t buy stocks? How much do you foresee yourself having in retirement (Roth IRA + pension)? From just my stock purchases alone, the stock-market calculators I use say I would have anywhere from $2.4M-$3.5M in retirement. My Roth IRA calculator says that I will have ~505k at 52 (the maximum age I want to retire and I’m 27 right now). Plus, I plan to contribute to a pension plan soon, so I’ll get however much from that plus Social Security (though SS won’t give me much). The end goal is to make at least $100,000/year *after* taxes in retirement.
Do you manage your own stock investments? I tried to once in the past, but I just never had time to learn how to optimize my returns, and things didn't end out so well. Luckily I only put a small amount of money in. I was thinking of trying a RoboAdvisor, but I'm still on the fence about the best route to take.
I largely manage my own accounts (Robinhood brokerage, Thrivent Financial, etc), but I hired an awesome financial advisor several months ago and they barely charge any fees in my area for investment advice and so I’ve been having regular meetings with them more and more. I am so glad I did this because their advice has been absolutely amazing. For instance, they recommended I buy Bitcoin when it was $3,500 — it is sitting at ~$9,000 currently! They also recommended that I buy certain dividend stocks and now I make several hundreds dollars from that each month. You should look into getting a money market account or a savings account that pays ~2-2.5% interest (such as SoFi, Wealthfront, Ally Bank, etc). Put money in one of them and just let it sit as a safe investment. Buy stocks like Facebook, PayPal, MasterCard, and Visa because Facebook is about to release its cryptocurrency next week (called GlobalCoin) and I plan to buy some of that. Also, buy Amazon stock if you can afford to. Seriously! Amazon has exceptional market growth potential and they are going to dominate the world one day. Get a Robinhood account, upgrade to Robinhood Gold for $5/month and turn off margin trading, and invest your money for fee-FREE trading. Just from my Bitcoin investment, I have over $18,000 sitting in my Robinhood account right now, and I only spent like $7,000. Let me know if you have any more questions.
Without getting into dollar amounts, as long as I am healthy, I will need about 1/2 of what I currently take home to live comfortably as a retiree. My pensions should provide a bit more than that. My retirement accounts are primarily to help out if/when I need long-term care help. My personal retirement accounts are partly in stocks via mutual funds, that includes both the Roth as well as my 401K from before. I say this without any insult intended, so I hope none is taken. In reading your posts over the years, it seems money is one of the most important factors in your career planning. For me, other priorities have superseded financial considerations. What I mean is, I have chosen work that provided sufficient pay, but not maximal pay. For instance, I could go into admin and make quite a bit more, but the actual joy I get in my job is from teaching students, and in admin I would lose that. I could make 40% more, but have (for me) a joyless job. I am opting to stay in the classroom.
Oh, no offense taken! That is an honest assessment. And I am by no means saying you should get out of the classroom — do what you love and enjoy. It seems like you are going to make a lot more than I initially thought (state pension, Roth IRA, 401k, and Social Security). I just advocate for teachers to do what they love AND make more money if possible because we work really hard and should be able to REALLY enjoy our retirement years. For example, I know a teacher who retired from public schools after 40 years of teaching and ended her career at $95,000/year. Between all of her investments, she has $4M in retirement and I am so happy for her because she takes vacations all the time and she deserves it!
Thanks. I do 80% of my banking through Ally so I do get the nice savings rate. That's where I deposit all my tutoring checks to save for a house I tried to speak to two finanacial advisors, but both just tried selling me useless life insurance policies. I'm only 30 [28/29 at the time] with no dependents. That's not what I wanted to talk about, but they just kept pushing it and pushing it, so I didn't give them any of my money. I've also thought about bit coin, but I'm always scared to take the plunge because it sounds risky.
Yeah, there is no need to get a life insurance plan. What I like about my financial advisor is that she tells me EVERY single fee up front. For example, “If you want me to do this, then I’ll charge you X.” I never receive a bill for more than exactly what she says and she doesn’t believe in fine print. She says it like it is and gives me recommendations for what she feels is a smart investment. And she isn’t afraid to say, “That’s a bad idea. I don’t suggest you do that.” And I have no problem losing $7,000 at this point in my life. After speaking with many rich people, the one thing I noticed is that they ALL take risk and I am going to listen to them, but not be too reckless. Here is how I look at it: As long as I break even, I don’t care if I lose money. Last time, I made over $30,000 from Bitcoin when it hit a high of $19,000+, but that was through sheer dumb luck. Now, I’m much more business savvy and have significantly more purchasing power and I’m going all in. Just like banks do, they have to spend money to make money and I shall do the same (within reason, of course). Good luck, my friend! I hope we both strike it rich, haha!
If it's for retirement, just open a Roth IRA with Vanguard of Fidelity, select a target date retirement plan close to the year you expect to retire, and voila. You get an appropriate mix of stock funds (domestic, global), bond funds (domestic, global) and money market. I used to be obsessed with stock picking until other things started occupying my time. You can retire comfortably with individual stocks, index or mutual funds.
I do this and buy stocks on my own. You’ll have a lot more money that way in the end because you can only contribute $6,000/year to a Roth IRA.
Ok so you've inspired me to take a first step. I've transferred 10k from my savings account into a managed investment account through Ally. Maybe once I get a better grasp on it, I'll start picking my own stocks and things
