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URL:  https://boards.fool.com/i-have-not-read-the-details-of-how-this-34116107.aspx

Subject:  Re: Millionaire professions Date:  1/22/2019  4:23 PM
Author:  BruceBrown Number:  91690 of 93634

I have not read the details of how this 'study' was conducted, but I'd wager 'Teachers' are on this list due to their pension plan, which at least historically, have been generous...although this will certainly depend on the state and school district.

My sister retired from her Oregon School District after, I believe, 28 years at age 58 as a Tier I PERS retiree. She mentioned to me one time that she receives about 82% of her final salary as an inflation adjusted life annuity, with a 2% annual adjuster. So let's do some math....

If her final salary was $66,000 then her annual benefit at her first year of retirement would be about $54,120. Assuming a life expectancy to age 88 will give her 30 payment years. The present value of this inflation adjusted life annuity would be $1,236,338.

I also understand in talking to her that the PERS system has since been modified to reduce the % of top benefit to around 50% of final salary at the maximum.

BruceM


Yes, the three legged stool (pension, SS, and risk portfolio) applies to most in the teaching profession if they are able to stick with the career and if they are able to utilize all of the benefits. Not all states include Social Security for teachers, so they will not have the traditional three legged stool. We feel fortunate to live in one that does include SS.

Upthread it was questioned about year round salary for teachers. Most teachers are paid for 9 months of work, but the salary is spread out and distributed over the 12 months which keeps lifestyle from fluctuating too much.

In addition, many teachers are living in two income household arrangements. Many teachers also work a second job during the summer (or on weekends, nights, holiday breaks).

According to a 2012 Barron's study, about 14% of America's millionaires are teachers:

https://www.barrons.com/articles/SB5000142405311190437000457...

That particular study included the prime residence in the calculations and used a net worth figure of $1M-$5M.

Many public school plans encourage teachers to retire in their 50's, at which point many teachers then go into other careers or take another job. Some even "retire" from the public school at that point, then go and teach at a private school. Some "retire", take a year off, and then qualify to continue working as a substitute teacher and can add additional funds to their pension plan and risk portfolio. I've even met a few who lived near a state border, and retired from one state with a pension in their early 50's, and then took a job across the border in another state and worked enough years to vest and build up a pension in a second state. Clever!

This is my 16th year of teaching at the college level, although this is my first year of doing it only on a part-time basis due to being laid off last year from the full time gig as a total of 25 professors were cut at my college over the past two semesters. Ouch!! Needless to say, I now have an additional job as a result. And BruceM's book helped guide me get some investments set up as some income replacement if need be.

My spouse is in her 12th year of working in public education and will receive a state pension. Her program is federally mandated, so job security appears to be better for her than what I experienced. Our immediate plans include her continuing on for more years in that position while we add what we can to her 403b/457b on top of the mandatory pension contributions.

Educators are a very small niche in the US as there simply are not that many compared to other careers.

US Data shows only 4% of the working population teach. Of that 4%...

30%: 1.54 Million College Professors (1.7 Million if you include TA's)
70%: 3.6 Million Elementary and Secondary Teachers in the US

Grand total of 5.14M workers are educators out of 126M workers in the US, or only 4% of the working population.

However, what we do know as keys to success:

Develop a workable plan
Invest early and often
Never bear too much or too little risk
Never try to time the market
Use index funds when possible
Keep costs low
Diversify
Minimize taxes
Keep it simple
Stay the course

Certainly applies to educators just as much as it does to all other careers.

This story was from our local newspaper on teacher salaries and the the top 10 states including the salaries being adjusted for the cost of living in each area:

https://www.desmoinesregister.com/story ... 459047002/

By the numbers: Teacher salaries adjusted by cost of living

Below are the 10 states with the highest-paid teacher salaries after adjusting for cost of living differences (actual 2016 average salary in parentheses).

1. Michigan: adjusted for living $71,773 (actual salary $63,878)
2. Massachusetts: $63,938 (actual salary $76,981)
3. Ohio: $63,740 (actual salary $56,410)
4. Pennsylvania: $63,717 (actual salary $64,991)
5. New Jersey: $61,030 (actual salary $69,330)
6. Maryland: $60,937 (actual salary $66,482)
7. Kentucky: $60,927 (actual salary $51,666)
8. Iowa: $60,868 (actual salary $54,416)
9. Illinois: $60,555 (actual salary $61,342)
10. Delaware: $60,414 (actual salary $59,085)

This article talks about you are most likely to marry based on your job and talks about the percentage of elementary and middle school teachers that marry each other.

https://www.businessinsider.com/who-youre-most-likely-to-mar...

If you think about such a union between teachers, that could be two household pensions in retirement along with the SS and risk portfolio. :-)

In terms of teachers....when combined with a spouse that also works, the benefit plans (health, pension, 403b/457b, time off in June/July/August) can all work out over a long career to reach goals with a sound savings plan and living within one's means. However, as in all other professions, even though the path and tools are there for teachers to reach a level of wealth accumulation, we know the majority do not reach certain goals. However, that has nothing to do with being a teacher or not, but everything to do with budget and living within one's means.
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