Many ARE saving enough for retirement

[REWahoo]

Vanguard has an article that's a bit different from the usual mantra...

Who’s on track for a secure retirement?

"As the job of saving for retirement increasingly shifts from employers to employees, many pundits are warning that Americans aren't up to the task and will face dire financial consequences as they get older.

A new Vanguard study offers a different view: Although some Americans are counting on Social Security alone to carry them through their retirement years, a sizeable part of the population is saving actively for retirement. And, by and large, they're doing a reasonably good job of it."

However...

"There remains a sizeable population that will rely solely on Social Security for its retirement income," said Steve Utkus, director of the Vanguard Center for Retirement Research. "Addressing the needs of this 'non-saver' population goes well beyond traditional savings policy to include issues of education and job training. Meanwhile, among the 'saver' population, it seems that many households are doing a reasonably good job amassing additional assets and benefits to support themselves in retirement."

 

[peggy]

On reading the title of the thread, my first thought was, "Right, and they're all on this board."

It is refreshing to see a different view; thanks for posting.

 

[dumpster56]

Everyone that I know, my friends that I grew up with have zip nothing saved these are hard working college graduates with good jobs but the cost of housing cars raising kids they are well living paycheck to paycheck.

Heck without my pension I have very little additional saved. I lost money on a townhouse back in the 80s raised two great stepchildren got one thru medical school, another thru grad school, paid for two weddings bought too many cars. BUT was able to make 300K on my last house put it all down on my new place and am able to take the early retirement at 50 YO and leave the stinkin new jersey newark school district with over 32,000K pension and medical bennies with a cola. I always planned on the pension. Glad I was lucky and I still have it!

Yes in 9 years my wife will start taking her SS and in 12 I will take mine. So I figure at that time 50+ K a year with no mortgage is well very doable. I plan to work as a part time track coach here in NC and do sub teaching. Maybe even sell running shoes or kayaks and make an additional 15 to 20K with NO STRESS!

It is all good, But I worry about my good friends.

I just found a piece of paper today that says my wife who worked 20 years as an ICU nurse has 60K in a pension fund that she knew nothing about and can take the lump sum at 62. Humm neat!

 

[Cut-Throat]

Everyone that I know, my friends that I grew up with have zip nothing saved these are hard working college graduates with good jobs but the cost of housing cars raising kids they are well living paycheck to paycheck.

Heck without my pension I have very little additional saved. I lost money on a townhouse back in the 80s raised two great stepchildren got one thru medical school, another thru grad school, paid for two weddings bought too many cars. BUT was able to make 300K on my last house put it all down on my new place and am able to take the early retirement at 50 YO and leave the stinkin new jersey newark school district with over 32,000K pension and medical bennies with a cola. I always planned on the pension. Glad I was lucky and I still have it!

Yes in 9 years my wife will start taking her SS and in 12 I will take mine. So I figure at that time 50+ K a year with no mortgage is well very doable. I plan to work as a part time track coach here in NC and do sub teaching. Maybe even sell running shoes or kayaks and make an additional 15 to 20K with NO STRESS!

It is all good, But I worry about my good friends.

I just found a piece of paper today that says my wife who worked 20 years as an ICU nurse has 60K in a pension fund that she knew nothing about and can take the lump sum at 62. Humm neat!

I have a lot of friends that were school teachers and most retired at age 55 and are doing very well because of their pensions and medical care. I hung out with these guys for the last 25 years. They always spent more money than me and did not have to save for retirement. And they fished all summer, while I was at work! I think one of the biggest myths in America is that school teachers are paid poorly. Try retiring in Corporate America today with those benefits!

 

[TromboneAl]

We here have to remember that retirement is very different from early retirement. Saving enough for retiring at 65 or 68 is a lot easier than for retiring at 50. More time to save, and less time to spend.

 

[mb]

As the article suggests I think that savings may be bi-nodal.

It's definitely not a sample representative of the overall population but I would guess that 95% of the people that I was aware of over the last 20 years were contributing to 401k's.

 

[youbet]

I think one of the biggest myths in America is that school teachers are paid poorly.

I always looked at it this way........ If there is an ongoing shortage of teachers and people are reluctant to enter the field, then teachers are underpaid. If there is a surplus of qualified teachers looking for work and many are accepting substitute teaching or daycare work, then teachers must be overpaid. The markets are a better judge of the appropriateness of pay levels than subjective judgements by the public as to whether pay is "fair."

 

[youbet]

I would guess that 95% of the people that I was aware of over the last 20 years were contributing to 401k's.

Same here mb. I read the statistics and see that few folks have more than $50k saved for retirement. Yet, it seems like everyone I know, friends, work chums, relatives, all are doing ok getting ready for retirement. Perhaps we just swim with a school of that kind of fish!

 

[dumpster56]

I always looked at it this way........ If there is an ongoing shortage of teachers and people are reluctant to enter the field, then teachers are underpaid. If there is a surplus of qualified teachers looking for work and many are accepting substitute teaching or daycare work, then teachers must be overpaid. The markets are a better judge of the appropriateness of pay levels than subjective judgements by the public as to whether pay is "fair."

I have moved from NJ to NC and if i were to have taught in the district that I moved to at 30 years experience I would be making 54,000 a year with a masters degree. Uh that stinks.

I will possibly take a full time physical education position when I get down here in december after taking my NJ early retirement. Then with a 33K retirement a year + about 50,000 = 83,000 a year with a small mortgage well that would be a good teaching salary.

 

[youbet]

Well, the way the market works is that if NC can attract good teachers with Masters degrees for $54K, then that's what they should pay. If they can't, they need to up their offer until folks are interested in the job.

Just curious, will you need to take any classwork to become certified to teach in the public school system in NC?

 

[ascenzm]

I always looked at it this way........    If there is an ongoing shortage of teachers and people are reluctant to enter the field, then teachers are underpaid.  If there is a surplus of qualified teachers looking for work and many are accepting substitute teaching or daycare work, then teachers must be overpaid.  The markets are a better judge of the appropriateness of pay levels than subjective judgements by the public as to whether pay is "fair."

I agree.  A few years ago, a suburban Pittsburgh, PA school district had openings for dozen or so teachers.  They were inundated with applications for these teaching positions.  Suburban Pittsburgh, PA public school teachers are among the highest compensated school teachers in the country.   Their pensions are pretty sweet as well.  IIRC, the PA teachers' annual pension amount = years service x 2.5% x avg. of the highest three years' salaries.

Of course to pay for all this, Pittsburgh area property owners have some very high property taxes.

Mike

 

[dumpster56]

Well, the way the market works is that if NC can attract good teachers with Masters degrees for $54K, then that's what they should pay. If they can't, they need to up their offer until folks are interested in the job.

Just curious, will you need to take any classwork to become certified to teach in the public school system in NC?

I have a NC teachers certification. I thought we were going to move there back in the 80s.

The school districts seem to find new teachers who leave after a few years, they find they cannot live on the salary.

I find it funny how everyone who thinks teaching is such a great gig, really has no idea.

I have taught coached three seasons which means the day ends at 6pm everyschool day, plus all day saturday, the additional money is NOT added toward pension. I worked every summer teaching summer school or painting houses. So the line teachers get the summers off and so much holiday time is a bunch of BS.

Again I have been teaching 30 years with a masters degree is that only worth 55,000 in the raleigh area of nc?

How much money would someone who has a masters degree in business make after 30 years.?

In NJ it pays closer to 80,000 but the cost of carrying a 230,000 mortgage and taxes close to 9,000 a year well make it a wash when you look at my new digs in NC.

But my mortgage is only 50,000 and will be paid off in 5 or 6 years.

 

[youbet]

Please understand newguy888, I'm not saying teachers are underpaid or overpaid.  I'm saying the pay level needs to be determined in the marketplace.  No amount of discussion rationalizing teacher's pay based on opinions of how easy or tough the job is will do it.  No discussion of what others make in other professions is mundane.  Rather, the pay level needs to be determined by what it takes to attract qualified, informed people to the job.

In our area, there are long waiting lists of qualified teachers looking for work.  Some are freshouts, some experienced. Most are treading water working as teachers aids, in day care or at lower paying private/parachoial schools.  It would seem silly to jack up the pay scale which would only attract even more applicants.

On the other hand, if the school district published a need for qualified teachers and had trouble finding applicants, I'd be the first to suggest higher pay!  Education is far too important to go without adequate, qualified personnel.

BTW, while the only time I've ever taught was as a TA in grad school, DW recently retired after 36 years as a Special Ed teacher.  Her brother and his wife are retired highschool math teachers.  All consider their careers successful and speak very positively about their career choice, both in terms of work content and compensation.

It sounds like your experience in NJ has worked out well for you too newguy.  Congrats on your upcoming early retirement!

 

[dumpster56]

Please understand newguy888, I'm not saying teachers are underpaid or overpaid. I'm saying the pay level needs to be determined in the marketplace. No amount of discussion rationalizing teacher's pay based on opinions of how easy or tough the job is will do it. No discussion of what others make in other professions is mundane. Rather, the pay level needs to be determined by what it takes to attract qualified, informed people to the job.

In our area, there are long waiting lists of qualified teachers looking for work. Some are freshouts, some experienced. Most are treading water working as teachers aids, in day care or at lower paying private/parachoial schools. It would seem silly to jack up the pay scale which would only attract even more applicants.

On the other hand, if the school district published a need for qualified teachers and had trouble finding applicants, I'd be the first to suggest higher pay! Education is far too important to go without adequate, qualified personnel.

BTW, while the only time I've ever taught was as a TA in grad school, DW recently retired after 36 years as a Special Ed teacher. Her brother and his wife are retired highschool math teachers. All consider their careers successful and speak very positively about their career choice, both in terms of work content and compensation.

It sounds like your experience in NJ has worked out well for you too newguy. Congrats on your upcoming early retirement!

Thanks

I really must say I had no real desire to pack it in, Except I lived in NEW JERSEY. Do not get me wrong I lived in a really nice area Warren County out away from the mass population center, But I had to drive 120 round trip a day into a flat out failing school district in an american inner city with all the problems. NEWARK!

I coached in a great suburaban district but could not get a job because I had too many years under my belt and the district WOULD NOT pay the 27th step on the guide only 5 steps. I even said I would take less money the school was closer to home etc, BUT they would not hire me. Want new teachers out of school was their mantra. Bottom of the salary guides.

Anyway I am gonna probably enjoy my time . Heck who else gets over 30K for life with a cola no real mortgage medical bennies for life at the age of 50?

$hit maybe you guys are right us teachers have a good gig. 8)

 

[Spanky]

...teachers' annual pension amount = years service x 2.5% x avg. of the highest three years' salaries.

...teaching 30 years with a masters degree is that only worth 55,000 in the raleigh area of nc? ...In NJ it pays closer to 80,000 but ..

It's a no brainer to teach in NJ to get much higher pension. You can always move after retirement.

 

[Spanky]

...teaching 30 years with a masters degree is that only worth 55,000 in the raleigh area of nc?

In a suburban metro area of Minneapolis, the salary range for teachers with MA is $40,108 to $65,610. The normalized salary range, however, will be $48,129.6 to $78,732 to account for 10 working months.

 

[Nords]

It's a no brainer to teach in NJ to get much higher pension. You can always move after retirement.

Yup, when I think of New Jersey, it's usually associated with the words "no brainer".

 

[Hydroman]

I have moved from NJ to NC and if i were to have taught in the district that I moved to at 30 years experience I would be making 54,000 a year with a masters degree. Uh that stinks.

$54K for 9 months of work equals $72K per year if you worked for 12 months. Not to mention 2 weeks off at Christmas and another week off for Spring break plus every single federal and state holiday, plus a nice COLAed pension with medical benefits. Doesn't seem like something to complain about.

By the way there is a guy reporting to me who has an MBA and 20 years experience. His salary is $45K per year and no pension. An MBA in Business does not guarantee you a six figure salary. I have a friend who has an MBA from a top university who was making six figures in the corporate world and quit to teach high school business classes for 48K per year. Calls me up every June to remind me that he will be off fishing and golfing for 3 months wishing I could join him.

 

[youbet]

I have a friend who has an MBA from a top university who was making six figures in the corporate world and quit to teach high school business classes for 48K per year. Calls me up every June to remind me that he will be off fishing and golfing for 3 months wishing I could join him.

So, you going to join him or continue to waste your life away in the harness?

 

[macdaddy]

My SO has been a teacher for about six weeks now. My impression is that it is a job with a lot of latitude. Beyond the 7 or 8 hours required at school, you can work as much or as little as you want. You can race through grading papers in a casual way, not write any comments, and leave the kids to catch your mistakes. Or you can put in an extra 2 hours every night, try to figure out what concepts they are struggling with, and write comments that may help them learn. Before she started teaching, the pay and benefits versus the hours required at school made it seem like a sweet deal. Now I see how she leaves at 6am and gets home at 8pm. We eat dinner while we both grade papers and talk about who is struggling with what, and how to help them. None of the extra time is "required" but when you see that the only difference between a young child learning to enjoy reading, and not being able to read at all, is YOU, well it's easy to be "sucked in". Before she started teaching, I thought, oh good, maybe she can tutor students at the wealthier school on the weekends for $30/hour. Now I understand why she wants to tutor the students at her low income school for free. I will probably spend my saturdays there with her. Last night one of the journal entries I wrote comments for described, in scrambled misspelled english, how a young 9 year old girl in the class had literally had to swim away from her house in the flood waters of Katrina, carrying her dog in her arms and floating everything she owned behind her. Her grandmother died in that house. In all the young girl's previous years of education in New Orleans, I don't think anyone seriously tried to teach her to read or write. Certainly my SO is not "required" to do anything beyond put in 7 hours of face time in front of her classroom. You can push these kids through the year and fail the 50% of them who can't naturally keep up. Then they become someone else's problem. But that doesn't really cut it when you can feel young futures on the line.

My SO earns $56k in 12 month adjusted salary to start. That's not a bad salary at all. But what it comes down to is that her job is really like volunteer work. It's actually much much more meaningful, and more impactful, than 99% of the volunteer work I have done, and see people do. So my opinion now is basically that she is getting paid to do volunteer work. I think she would do it for much less pay too. For the time that she (and I) put in, $56k seems on the low end. But to someone else in the exact same job, who puts in the minimum required, $56k a year broken down on an hourly basis would be great ($30/hour). So maybe some teachers are overpaid, and some underpaid - teachers in the same jobs, with the same salaries, but differing levels of committment. I don't know if it's fair to let the market set the absolute prices for these things. It seems like what they do now is try to pay a little above a comfortable annual salary, and then try to attract the people who will pour their heart into it. That seems like a good strategy to me.

 

[donheff]

Good post MacDaddy. I have known quite a few teachers like your SO. They make a HUGE difference in many lives. There are plenty of others who become embittered and just put in time having a negative effect on other kids' lives. Too bad there isn't a simple, effective way to encourage the negativists to move on and encourage the best to stay.

 

[Andre1969]

I have a buddy who's a teacher, and the way he likes to twist it around is that he's out of work and doesn't get paid 3 months of the year! Or, if he chooses, he can get paid those 3 months, but then takes a cut in the paycheck. He makes the same that I do, lower $50K range. However, I HAVE to work 12 months out of the year.

It comes out the same in the end. He's getting paid $50+K per year. If he takes the 12 months worth of paychecks, each check would come out to about what my paycheck is. Or he can take 9 months worth of paychecks that are inflated, but in the end it comes out the same.

Funny how those of us on the outside looking in view it as getting 3 months off, but those on the inside looking out view it as being out of work for 3 months! :

 

[saluki9]

I have a lot of friends that were school teachers and most retired at age 55 and are doing very well because of their pensions and medical care. I hung out with these guys for the last 25 years. They always spent more money than me and did not have to save for retirement. And they fished all summer, while I was at work! I think one of the biggest myths in America is that school teachers are paid poorly. Try retiring in Corporate America today with those benefits!

CT, for once I can finally say I agree with you 100%

Many people forget to add the value of those benefits and the fact they are on a 9 month schedule into the equation when considering teaching pay.

My brother in law is a teacher here at the local high school. With a PhD 13 years of experience he brings in about 90K for 8 months of work when you factor in the all the vacations. Has a COLA'd pension and pays nothing for his health insurance.

Hmmmm may explain why my property taxes are so high

 

[Hydroman]

For the time that she (and I) put in, $56k seems on the low end. But to someone else in the exact same job, who puts in the minimum required, $56k a year broken down on an hourly basis would be great ($30/hour). So maybe some teachers are overpaid, and some underpaid - teachers in the same jobs, with the same salaries, but differing levels of committment. I don't know if it's fair to let the market set the absolute prices for these things. It seems like what they do now is try to pay a little above a comfortable annual salary, and then try to attract the people who will pour their heart into it. That seems like a good strategy to me.

I agree. Teaching is a calling. Increasing the salary is not going to attract better teachers. The good teachers are not into it for the money or summers off.

By the way my friend with the MBA who left the corporate world to teach high school loves the job and puts in a lot of extra time with the student including heading up their Marketing club. But he loves those summers off too.

Those teachers who whine because of what they consider undercompensation compared to the corporate world should just quit whining and get a job in the corporate world.

 

[youbet]

The good teachers are not into it for the money or summers off.

Perhaps a bit of a hasty generalization macdaddy.  This might be true sometimes, but not always.  For example,  DW, to the best of my knowledge based on awards received, inputs from parents, etc., was an excellent teacher.  Yet she did consider the money and benefits important when making her career decision because we both grew up in very modest circumstances. We began married life with a lot of college debt and needed decent paying jobs.

Perhaps what we could say is that good teachers are not into it primarily for the money or summers off.    

Even three years into retirement, DW is facinated at how some K-12 public sector teachers consider themselves underpaid.  Starting pay was a tad on the low side, but once she had a decade or so of seniority coupled with her masters degree + 60 additional graduate hours, the compensation package was pretty darn competitive.  She has commented that her associates who whined the loudest seemed to be those that didn't really like the career and might have been unhappy at any pay level.

One of the other advantages to a teaching career not mentioned yet is that it is one of the few professional careers where you are backed by powerful unions.  The local DW belonged to had some talented folks in leadership positions and they really brought home the bacon.  I managed in industries with IAM, Steel Workers and Teamsters and dealt with union matters on a daily basis as well as participating in negotiations.  I never felt those unions were as impactful as DW's.  In her case, her union really had its act together.

My opinion is that pay and benefits are important in attracting qualified people to the teaching field.  In our area, pay and benefits must be adequate because when openings are posted, many qualified, knowledgible people apply.  Market forces seem to be working.