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Old 06-21-2011, 05:35 PM   #61
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Slight correction, they lose up to 60% of their SS because of the WEP provision. Most of these people are unaware of it until retirement.
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Old 06-21-2011, 06:17 PM   #62
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Thanks Mulligan.
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Old 06-21-2011, 08:40 PM   #63
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DH and I could have planned much, much better for retirement and I wish we had!

We will make it, though not in the style we could have with more foresight. Neither one of us is very financially-savvy. Suzy Orman is about as complicated as I ever read/digested. We will have teacher pensions, modest 403b's, and SS. (Arkansas)

DH's teacher pension, after 26 years of teaching and 3 "reciprocal" years of working for the state, will be a bit over $1700. After taxes, it should (I hope) be around $1600.00. So, I understand how a lifelong of teaching can result in a pension in that ballpark. I am very grateful we have the 403b's.
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Old 06-21-2011, 09:27 PM   #64
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I do not want to judge as I have made my share of mistakes.

It is really easy to get into a habit of spending much when you have high earnings as time is often limited and its easier to go out to dinner and pay someone to do things for you.

People often do not have anyone to learn from or guide them.
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Old 06-21-2011, 09:51 PM   #65
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DH and I could have planned much, much better for retirement and I wish we had!

We will make it, though not in the style we could have with more foresight. Neither one of us is very financially-savvy. Suzy Orman is about as complicated as I ever read/digested. We will have teacher pensions, modest 403b's, and SS. (Arkansas)

DH's teacher pension, after 26 years of teaching and 3 "reciprocal" years of working for the state, will be a bit over $1700. After taxes, it should (I hope) be around $1600.00. So, I understand how a lifelong of teaching can result in a pension in that ballpark. I am very grateful we have the 403b's.
Congratulations on having the foresight to contribute to a 403b. That of itself put you ahead of many educators! Comparing pensions of teachers across state boundaries can be tricky at best (not counting instate where neighboring districts salaries can be considerably different, too). A teacher north of your border may appear to have a better pension, but since they did not pay into SS and had more coming out of their paycheck the difference could be minimal. Pensions are usually devised in a manner that the bulk of your pension is determined in the final few years. Taking early retirement instead of full retirement really effects your pension. Since the Texas teacher did not pay into SS I would be stunned if she worked more than 20 years. In her case I wouldn't be surprised if her pension would have been close to 50% higher if she had taught 5 more years. That is the about the difference in MO pension from 25 to 30 years.
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Old 06-21-2011, 09:52 PM   #66
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I do not want to judge as I have made my share of mistakes.

It is really easy to get into a habit of spending much when you have high earnings as time is often limited and its easier to go out to dinner and pay someone to do things for you.

People often do not have anyone to learn from or guide them.
Also, some young people are not exactly eager to be given guidance.

I could help my sons get a handle on their expenses, but they have wives with their own desires, and they have all been very successful so they do not see themslves as needing much guidance.

Reading this board one can see that parents and their ideas are not always warmly welcomed, so I limit my spouting off to this board and get agreeable as I can be around any flesh and blood human, especially my family. At this time in life, I need them emotionally more than they need me, and I am not going to make myself into a pita even if on some things I think I may know better. It is also true that I may not.

An example is this past Sunday, Fathers' Day. My woman friend called me and asked if I would like to come to dinner. I told her that I would, if I could come late afternoon. I had not heard from either of my kids about a Father's Day get together, so if they did not have plans for me this would be a first. I've been a father for 35 years, and every year got honored on Father's Day. I have considerd this a extremely nice act on their part and on the part of my former wife, but I also know that they are busy and I should expect to get along by myself sometimes. Long about time I thought I would just go downtown and entertain myself a bit, one son called and said- can you come to dinner? I said no, I wasn't sure you guys were free, so I accepted an invite- but I can meet you guys in the bar of your choice right now. So they both and wives met me at a bar in my neighborhood and we spent a few hours together which I enjoyed immensely. And I realized just how disappointed I would have felt had they not called.

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Old 06-22-2011, 01:00 AM   #67
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I suppose I would have no problem with how anyone else spends/saves their money. The problem comes when the "grasshopper" wants to eat some of my stash later on. Unfortunately, there's always someone willing to buy the grasshopper's vote with my money.
Which is exactly what will happen if they decide to means test social security and/or medicare. Those of us who LBYM will have more means because we gave up something yesterday so that we could have something today and for many tomorrows.
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Old 06-22-2011, 06:31 AM   #68
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Which is exactly what will happen if they decide to means test social security and/or medicare. Those of us who LBYM will have more means because we gave up something yesterday so that we could have something today and for many tomorrows.
SS is already means tested for income tax against it.

Future means testing will probably not result in: You do not qualify because you have some other resources. It will probably result in some sort of progressive tax. In the case of Medicare, perhaps increased premium.

The system will be strengthened through several measures. Both some restructuring of the programs and taxes (through various methods).

The debate will be about who pays!
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Old 06-22-2011, 07:49 AM   #69
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Old 06-22-2011, 08:23 AM   #70
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We all have dysfunctional fams, huh?
Emmmmm....... No.
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Old 06-22-2011, 08:41 AM   #71
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Forget the Grasshopper stuff. Ms G. and I still look back at all the stuff we spent our money on, with remorse. And we were still LBYM and saving 60% of our income.

I have a brother with 2 foreclosures, one short sale and a bankruptcy. Still today his wife says " He makes a good salary, we can afford it". He is older than me and will work until he is dead.
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Old 06-22-2011, 09:30 AM   #72
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Forget the Grasshopper stuff. Ms G. and I still look back at all the stuff we spent our money on, with remorse. And we were still LBYM and saving 60% of our income.

I have a brother with 2 foreclosures, one short sale and a bankruptcy. Still today his wife says " He makes a good salary, we can afford it". He is older than me and will work until he is dead.
We all regret certain purchases, investment mistakes, etc... the key is to learn the lesson and not make them again.
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Old 06-22-2011, 09:32 AM   #73
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Future means testing will probably not result in: You do not qualify because you have some other resources. It will probably result in some sort of progressive tax. In the case of Medicare, perhaps increased premium.
This is in fact the current situation, and it has been for several years anyway.

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Old 06-22-2011, 10:02 AM   #74
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Congratulations on having the foresight to contribute to a 403b. That of itself put you ahead of many educators! Comparing pensions of teachers across state boundaries can be tricky at best (not counting instate where neighboring districts salaries can be considerably different, too). A teacher north of your border may appear to have a better pension, but since they did not pay into SS and had more coming out of their paycheck the difference could be minimal. Pensions are usually devised in a manner that the bulk of your pension is determined in the final few years. Taking early retirement instead of full retirement really effects your pension. Since the Texas teacher did not pay into SS I would be stunned if she worked more than 20 years. In her case I wouldn't be surprised if her pension would have been close to 50% higher if she had taught 5 more years. That is the about the difference in MO pension from 25 to 30 years.

No... Texas is different.... you get 2.2% per year of the average highest 5 years of pay (I think that is right now... it used to be 3)...

So, 5 more years is only 11% more... plus your salary increases which is not much...
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Old 06-22-2011, 10:05 AM   #75
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I feel so smart and lucky after reading a few posts on this thread. Thanks.
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Old 06-22-2011, 10:25 AM   #76
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No... Texas is different.... you get 2.2% per year of the average highest 5 years of pay (I think that is right now... it used to be 3)...

So, 5 more years is only 11% more... plus your salary increases which is not much...
It winds up a bit higher. Let's use 50k as final ave. salary. 20 years would be a pension of 22k. Now let's say she worked to 25. Assume salary ave. increased 3k to 53k. That would make a pension of 29,150. That is an actual increase of 32.5% of pension (not 11%) Texas multiplier does not escalate, I guess. In Mo. it starts out at 2.2 and graduates to 2.5.
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Old 06-22-2011, 11:41 AM   #77
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Originally Posted by FreeAtLast View Post
I do not want to judge as I have made my share of mistakes.

It is really easy to get into a habit of spending much when you have high earnings as time is often limited and its easier to go out to dinner and pay someone to do things for you.

People often do not have anyone to learn from or guide them.
That's a very good point, FreeAtLast. I was thinking that very same thing. However...I have friends that are high earners and I see how they live. I also think they do not have a high tolerance for suffering, (saving like the ant), since money makes things easy. Kinda like crack, you are hooked on it. But, I think if you grew up poor(er), and your parents saved...your tolerance for suffering is also good. Even if you make a lot, now. And just as you said, "they did not have anyone to learn from".

Deep inside though, they ARE aware of what's going on. At least my friends are. Occasionally they ask me when I plan to retire, and I go on about it being so and so time, and what I want to do with my freedom. They always say they could never retire since they can't afford to. But, that's as far as I can go other than telling them ways to cut back, invest, etc. That's when their eyes glaze over because they can't give up the crack. It is a cultural difference.
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Old 06-22-2011, 11:50 AM   #78
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It winds up a bit higher. Let's use 50k as final ave. salary. 20 years would be a pension of 22k. Now let's say she worked to 25. Assume salary ave. increased 3k to 53k. That would make a pension of 29,150. That is an actual increase of 32.5% of pension (not 11%) Texas multiplier does not escalate, I guess. In Mo. it starts out at 2.2 and graduates to 2.5.

The problem is you have a salary increase of 6% on average over those 5 years.... that probably not going to happen... see salary table...

Texas Education Agency - 2009-2010 Minimum Salary Schedule

The base salary does not increase after 20 years... and take a look at the difference between 19 and 20... only $500...


But, I did say it was the 11% plus the difference in salary... so the difference between mine and what is in your example is the salary increase...


PS.... various school districts pay more than the minimum...
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Old 06-22-2011, 12:52 PM   #79
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She was yelling "how do they expect me to live on $1700 a month?"
Just the wording of her comments indicates that she's not taking full responsibility for herself - and she's a teacher.......
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Old 06-22-2011, 06:18 PM   #80
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Speaking as a teacher from Nevada, we are fully informed here about our retirement.

They have sessions once or twice a year, financial advisors come in to sell us products, etc.

Our pension is 2.67 / yr (5 years minimum to be vested), avg of highest 3. We don't pay into SS.

We also have the option (which the wife and I take advantage of) to contribute to 403bs and/or 457bs.

We also get yearly paperwork from the district stating the avg of our last 3 years, how many years we have baed in the retirement system, etc.
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