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Teachers don’t get paid for summer break I’m thinking

It depends, my ex, a teacher, had the choice of 10 or 12 monthly checks a year.

Her hourly rate was the same as mine, she had a lot more job security, better retirement plan, better medical coverage. All these were factors in her taking a teaching job. I also worked a lot more unpaid overtime.

Make a decision and take the good with the bad.
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If Dave Ramsey said it it must be true, but I find that list hard to believe.
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CABob writes,

If Dave Ramsey said it it must be true, but I find that list hard to believe.

</snip>


I agree. I expected to see doctors and salesmen on the list. But perhaps they earn high incomes, but then spend it all on the lifestyle they're "entitled" to?

intercst
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CABob writes,

If Dave Ramsey said it it must be true, but I find that list hard to believe.

</snip>

I agree. I expected to see doctors and salesmen on the list. But perhaps they earn high incomes, but then spend it all on the lifestyle they're "entitled" to?

intercst


----------------

I was surprised to teachers at number 3. The reporting always is at that teachers are underpaid. So itt must be massively generous retirement programs that get them on this list. I wonder if the "teacher" category includes college professors. Including them would certainly pull up the average.
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Given that it is a study conducted by the company that published it and it is a company in the business of giving advice and getting paid for it, one might wonder about the scientific rigor in the study.

For example, was the study population their clients? Might skew things a bit.
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I was surprised to teachers at number 3. The reporting always is at that teachers are underpaid. So itt must be massively generous retirement programs that get them on this list. I wonder if the "teacher" category includes college professors. Including them would certainly pull up the average.

I was surprised too. But most teachers I've known (including my mother) are very cognizant of the fact their earning potential is limited and so are very diligent savers.

Doctors, I've observed, tend to make lots of money, but they tend to spend it too.
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tamhas writes,

Given that it is a study conducted by the company that published it and it is a company in the business of giving advice and getting paid for it, one might wonder about the scientific rigor in the study.

For example, was the study population their clients? Might skew things a bit.

</snip>


Here's more info on the study.

https://www.fa-mag.com/news/building-wealth-low-and-slow-409...

They sampled 10,000 from the 11 million people in the US with a net worth of $1MM or more as defined by the Spectrum Group.

https://spectrem.com/Content/press-release-new-spectrem-grou...

intercst
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"I was surprised to teachers at number 3. The reporting always is at that teachers are underpaid."

***********************************************************

If you look in teacher's parking lots you will not find a lot full of
new autos - and teachers typically do not live in the luxury townhouse
communities or gated communities.

Living below your means is not something beyond the grasp of any profession
or job.

Howie52
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Again, there is no indication in that blurb of anything approaching a randomized sample from the relevant population. To say that there are X people in a population and that one has sampled Y people from that population is meaningless unless one knows how they were sampled, i.e., whether they were in any way representative of the population. In particular, if they were all clients, then one could assume that they were people who responded positively to the marketing message of the firm and the "research" would tend to reinforce the marketing message.
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If you look in teacher's parking lots you will not find a lot full of
new autos - and teachers typically do not live in the luxury townhouse
communities or gated communities.


Not having a new car, a luxury townhouse, or a gated community doesn't mean that one is living below one's means ... it is more likely an indication that one hasn't much in the way of means. I saw a piece recently that the Oakland, CA average rent was very similar to the average salary of an Oakland, CA school system teacher. This implies two incomes just to get by or significant commutes from less expensive communities ... and, hey, Oakland is hardly the high rent part of the Bay Area on the whole.
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On teachers, I have heard that many did very well on retirement investment accounts offered by TIAA-CREF.

Also if you include college professors in the group, full professors get paid quite well. Plus they can supplement their income with consulting assignments. And those who author a textbook might easily make millions if it becomes a best seller.
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As a one time college professor, yes, TIAA-CREF did very well, but that was as much the power of compounding as anything else since the contributions were in the mid 70s.

Point being, though, that college professors and book authors are a very small percentage of the overall population of teachers. I.e., if one samples teachers as a class, one ends up with very different results than if one samples teachers who have made enough money to seek out an investment advisory firm.
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college professors and book authors are a very small percentage of the overall population of teachers

"Publish or perish" does create incentives to author at every opportunity. A successful author can do very well.

Yes, most teachers are probably found in local schools. Senior teachers in some districts seem to do reasonably well. Most get advanced degrees to advance. PhDs are not uncommon.
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tamhas writes,

As a one time college professor, yes, TIAA-CREF did very well, but that was as much the power of compounding as anything else since the contributions were in the mid 70s.

</snip>


That's good news. Teachers as a group have long been victimized by terrible investment choices in their retirement plans.

Think Your Retirement Plan Is Bad? Talk to a Teacher
https://www.nytimes.com/2016/10/23/your-money/403-b-retireme...

</snip>


intercst
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I expected to see doctors and salesmen on the list. But perhaps they earn high incomes, but then spend it all on the lifestyle they're "entitled" to?

Well, since there are many more engineering degrees (about 70k bachelor's degrees, and another 30k advanced degrees) awarded in the US each year as there are medical degrees (about 18k - 20k), combined with the significantly higher debt that doctors in the US generally graduate with, I'm not all that surprised to not see doctors on the list, even without taking 'entitlement' into consideration.

AJ
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Teachers don’t get paid for summer break I’m thinking.
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At first I thought the article was about professions where people earn $1M / year. Then I realized it was about accumulated wealth. Saying someone is a millionaire means different things to different people.
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Teachers don’t get paid for summer break I’m thinking

It depends, my ex, a teacher, had the choice of 10 or 12 monthly checks a year.

Her hourly rate was the same as mine, she had a lot more job security, better retirement plan, better medical coverage. All these were factors in her taking a teaching job. I also worked a lot more unpaid overtime.

Make a decision and take the good with the bad.
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It depends on the school (public/private, determination of the School Board, etc). Some teachers teach summer school, others spend the summer preparing for the upcoming school year. Some schools even pay their teachers for continuing education or professional enrichment activities, such as an overseas trip for a language teacher, or taking a group of kids on a summer field trip.

Fuskie
Who doesn't think any teachers will become a millionaire off their summer jobs but it's not like they sit around all summer catching up on their Netflix binging...

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It also could be that administrators or even superintendents are being included with teachers. These categories typically make considerably more than teachers, and not just because their contracts are closer to year-round.

Kathleen
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Random thoughts on teachers as millionaires.

Does the study take into account spouses? I'm thinking perhaps a lot of the teachers have spouses, ex-spouses, late spouses in other occupations that might pay more than a career in education.

My father, a teacher, passed away in 1981, at age 58, before he was able to retire.
My mother, passed away just a couple of years ago at age 95. She had a few part-time jobs over the years, but was mostly a housewife/stay-at-home mom.

While not quite achieving millionaire status, my mother managed to accumulate on the order of 1/2 million before she passed away. Growing up in the depression might have had something to do with a frugal nature for both my parents.
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Again, there is no indication in that blurb of anything approaching a randomized sample from the relevant population. To say that there are X people in a population and that one has sampled Y people from that population is meaningless unless one knows how they were sampled, i.e., whether they were in any way representative of the population. In particular, if they were all clients, then one could assume that they were people who responded positively to the marketing message of the firm and the "research" would tend to reinforce the marketing message.

Yup, light on explaining methodology but that won't keep this thread from going on and on and on and on...
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Fuskie writes: "Who doesn't think any teachers will become a millionaire off their summer jobs but it's not like they sit around all summer catching up on their Netflix binging...

Well some of us do--binge Netflix, that is, not get rich off a summer job. :) Some of us need a true summer break to recharge after the school year! I've worked some summers (teaching summer school) and taken others off, but there are definitely times when I need the full break so I don't enter September still exhausted.

Years ago, my school used to pay employees across the 10-month school year...and then discovered that some teachers were bad at managing their money and wouldn't save up for the income-less summer months. So now we are paid our salaries across the 12-month calendar.

Like any profession, I'm sure there are huge differences across type of school (public/private), district/state, and individual situation (spouse salary, family assistance, etc.) that play a role in whether a teacher reaches the "millionaire" status as defined in the article. That said, my school has a fantastic 403(b) "match," in which we are actually forced to contribute 5% of our paychecks, but the school chips in an additional 10%. So every employee here (not just teachers) is automatically putting away 15% of their salary per year, even before they decide if they want to contribute more. If you start young with that plan, you can sock away quite a bit and achieve millionaire status at some point.

Best,
dols22
long education/teaching/summer vacations
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In the spirit of beating this horse into glue, and accepting that the questions about methodology are valid questions, there are reasons why teachers are incented to become savers. First, they have modest salaries given that most of them have college degrees at a minimum. They also have decent pensions (as compared to their modest salaries) if they last 30 years. They have the ability to qualify for those pensions in their early 50's if they started teaching right out of college. Modest salaries force people to live within their means. Teachers also are often incented to participate in their deferred income plans even if the options aren't all that great. Modest salaries plus decent pensions plus SS add up to a pretty good recipe for living within your means and saving for retirement.

iamspouse is not a teacher, but she gave up a well-paying job as a computer person (systems analyst or pmp or something or other) as an independent contractor about 20 years ago and accepted a lower paying job with the state because it provided us with health insurance at a time when my law firm was in the process of blowing up and I was faced with the prospect of starting again from scratch at the age of 44. At the same time I reduced my base salary drastically and dedicated my earnings to keeping my new firm afloat. Over time we learned to live on her reduced salary plus my reduced salary and got in the habit of saving my year end bonuses - which we used to spend when I had a bigger salary.

My Dad was a country lawyer and Mom was an English teacher. Dad used to complain that Mom's income did nothing more than bump him into a higher tax bracket. But her combined contributions to their retirement in the form of SS plus TIAA-Cref plus deferred income helped them out in retirement.

Modest salaries and decent pensions are a good recipe for forcing one to live modestly and save for retirement.
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Teachers don’t get paid for summer break I’m thinking.

This statement, and the thinking that teachers are always so very underpaid, make me crack up.

Teachers do not get paid for 8ish weeks of summer break because they are not working then. They only get paid for the days they work. Some will also tell you that they don't get paid for holidays either.

But they have all the holidays off, a week of vacation every 8 weeks or so, and the whole summer off. Most teachers around here actually work other jobs during the summer.

They get medical insurance for which they pay a small portion (around here, they pay 25 - 30% of the premiums), and pensions. They get a raise every year based simply on coming back with all the teachers getting the same raise. They also get paid for anything extra they do such as coach a sport or lead some sort of extracurricular activity.

Teachers in MA start out around $45k per year, but ramp up very quickly to the $80k to $90k range. I don't think that's too bad given they don't work the summer, regardless of if they feel they are getting paid for it. Annualize their salary to see what it works out to if they did work the full year with only 2 to 4 weeks paid vacation like most private industry, and I think it paints a different picture.
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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
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Modest salaries plus decent pensions plus SS add up to a pretty good recipe for living within your means and saving for retirement.

In Ohio teachers' state pensions are a substitute for SS, not in addition to. Of course a teacher can earn SS credits through summer employment and the like, but the years spent in a different retirement system count against you when computing your SS benefit. I won't see a dime of SS even though I have enough credits because of my 30 years in the state system.

https://www.ssa.gov/planners/retire/gpo-wep.html:

"Some federal employees and employees of state or local government agencies may be eligible for pensions that are based on earnings not covered by Social Security.

If you didn't pay Social Security taxes on your government earnings and you are eligible for Social Security benefits, the formula used to figure your benefit amount may be modified, giving you a lower Social Security benefit."
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Teachers in MA start out around $45k per year, but ramp up very quickly to the $80k to $90k range. I don't think that's too bad given they don't work the summer, regardless of if they feel they are getting paid for it. Annualize their salary to see what it works out to if they did work the full year with only 2 to 4 weeks paid vacation like most private industry, and I think it paints a different picture.

I teach college, but not in MA. Been teaching for about 40 years. Started out in the low $20k range; now up to the $60k range. About annualizing teachers' salaries, I wonder why any one would do this. My father used to say that it was great for me to have summers off -- but that only means that I was unemployed in the summer -- or rather, unpaid. I still have to face an annual review. And I can't say in that review that during the summer I took a trip to Europe, learned Spanish, or studied French cooking. I have to have something to show -- maybe I presented some papers at some conferences, maybe I published a paper in a professional journal, maybe something else -- but something academic has to be there.

As for annualizing the salary. It's already annualized. It's set in the fall , and then only paid out in paychecks over 9 months. During the summer, there's no income. Although lately the college has started a 12-month payment system (which is voluntary) in which our traditional 9-month pay is spread out thinner, over 12 months. (As if we couldn't just save the money ourselves.)

They get a raise every year based simply on coming back with all the teachers getting the same raise.

Not us. Some years we get no pay raise at all. And when there is state money for a raise, different people will get different amounts. Suppose over the summer I received a big grant in a national competition. That sort of thing might get me a better annual review and a bigger raise.

culcha
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I'm a retired RN. I know a lot of medical doctor. I also, because of social life circumstances happen to know a lot of teachers. My experience leads me to believe that the idea that the average single teacher would accumulate more money over the course of a lifetime than the average single medical doctor is UNBELIEVABLE.
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It doesn't surprise me at all that a teacher could save more money then a doctor. It's not how much you make but how much you save and how early you start. A teacher could start saving at 22 years old with a lot less debt then a doctor who would start saving at maybe 28. It's not about how much money you make but how much money you can save and the discipline to not touch it and to keep saving.

Andy
Its all about discipline
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jakalant writes,

My experience leads me to believe that the idea that the average single teacher would accumulate more money over the course of a lifetime than the average single medical doctor is UNBELIEVABLE.

</snip>


Nobody is debating that doctors make a lot more money than teachers. But doctors also tend to start their money-earning careers at a later age and with a lot more student loan debt. And I'm pretty sure that the vehicles in the doctor's parking lot are a lot more expensive that what you see in the teachers' lot. Doctors likely also live in a much more expensive neighborhood, eat at better restaurants, take fancier vacations, etc. There may not be that much left at the end of the month, even with a fantastic income.

intercst
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I wonder if the "teacher" category includes college professors. Including them would certainly pull up the average.
**************************************************************
Not necessarily.

Median salary is 72K. The outliers tend to be the med school doctors, the rock star scientists in their field, and the b-school and law school teachers. My husband, with a Ph.D. makes less than 45K for a full teaching load. Plus the adjuncts frequently are skating the line of not making it. We don't value teaching at any level.

Kristi
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jaka:"My experience leads me to believe that the idea that the average single teacher would accumulate more money over the course of a lifetime than the average single medical doctor is UNBELIEVABLE."

You haven't read the Millionaire Next Door. I advise you do.

Doctors have high incomes. They also have high spending habits and often graduate with $200,000 student debt. They have to 'live large' to impress - country club, fancy cars. Goes with the territory and they are poor 'savers' for the most part.

Plus of course, they have no pension plans.....

t.
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"My husband, with a Ph.D. makes less than 45K for a full teaching load. Plus the adjuncts frequently are skating the line of not making it. We don't value teaching at any level."

When I went to grad school at GWU, nearly all the courses were taught by adjuncts in the evening. They all had regular jobs but just taught one course a semester - usually in a subject that was near and dear to their hearts.

One was the former head of the FCC....taught a class in Telecom Policy....another was a full time lobbyist/lawyer....another was a chief guru at the Naval Labs...wrote the book on Coding Theory...... they got about $2000 a course back in the 1980s......probably a lot more today 40 years later.....and on and on. Great program. Of the 17 courses I took, 13 were taught by adjuncts. All were excellent.

Yeah, if you're an adjunct , you're probably not going to make it teaching one or a few courses at a time......

Heck, even Obama had a gig as an adjunct prof for a short short time.

t.
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Many who graduated with my DH are adjuncting at multiple places to pay bills. This is a well characterized phenomena in higher ed.

DH sent out over 50 CVs, got exactly 1 interview, which he fortunately nailed. He is extremely lucky. Adjuncts get no benefits, no 403B/401K, and only about $3K/course. It's bad.

Tele, this is an area where you may wish to hold off on opinionating...
Kristi
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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.

If the study is valid, then this will certainly be the major factor. I have found that both teachers themselves and the general public undervalue the significance of their pension.

Both of my inlaws (teachers) retired early with lifetime pensions, SS, and 403b accounts. My wife is a teacher who will be retiring early with the same.

As you illustrate, those pensions can have a PV of well over $1 million.
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Picked up along the way, familiar to most all here and apropos of this thread:

It's not how much you make, it's how much you keep.

If you don't spend less than you make you'll never make enough.

Compound interest is the 8th wonder of the world. Ergo, invest early, often and as much as you can bear.


*and yes, The Millionaire Nextdoor! Read it if you haven't already. Directly addresses this contrast between Drs and Teachers. Among other interesting performance by various groupings, like ethnicity (e.g. got a Scot background? You're likely to out perform in this area compared to someone with a German family background).
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*and yes, The Millionaire Nextdoor! Read it if you haven't already. Directly addresses this contrast between Drs and Teachers. Among other interesting performance by various groupings, like ethnicity (e.g. got a Scot background? You're likely to out perform in this area compared to someone with a German family background).

Interesting! I was born in Ayr, Scotland. I arrived on a troop ship carrying War Brides and their children to the United States in 1946.

I was studying Economics at UC Berkeley when I received a draft notice inviting me to participate in the Vietnam War. Managed to get enlisted in the USAF where I was trained as a Computer Programmer. After my military discharge, I completed my BS in Economics with a minor in Computer Science.

Worked as a Software Engineer for the next 40 years until I retired in 2013 at 68. I had an 8 figure income when I retired but only 6 of them were to the left of the decimal point. My colleagues at work often referred to me as "Herr Doktor" as I had a tendency to shift into lecture mode on technical aspects of various projects on which we were working.

So one million for being a Scot and another for being an engineer. Do I get another for being a teacher/lecturer?

I suspect that what wealth I have is a result of being raised by parents that grew up during the depressions in the UK and US. You learned to be frugal.
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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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Interesting! I was born in Ayr, Scotland. I arrived on a troop ship carrying War Brides and their children to the United States in 1946.


Mum was born in Beth, Ayrshire. Immigrated as a wee lass in 1927. Arrived at Ellis Island from Glasgow on SS Leviathan.

She could pinch a penny -- get a booger out of Lincoln's nose. Dad handed each check to her, she took care of the rest. Savings rate was impressive. Hospitality and generosity was her (and Dad's) hallmark. Always extra potatoes in the oven and room at the table for guests and passers by. We'd move the meat from our plate to the guests. :)
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I wonder if the "teacher" category includes college professors. Including them would certainly pull up the average.
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Not necessarily.

Median salary is 72K. The outliers tend to be the med school doctors, the rock star scientists in their field, and the b-school and law school teachers. My husband, with a Ph.D. makes less than 45K for a full teaching load. Plus the adjuncts frequently are skating the line of not making it. We don't value teaching at any level.

Kristi


True that, Kristi!

The U.S. Bureau of Labor Statistics reports that the average salary of a University Professor was $75,430 annually as of May 2016. The lowest-paid 10 percent of all University Professors earn less than $38,290, while the highest-paid 10 percent are paid more than $168,270 per year.

https://www.careermatch.com/job-prep/career-insights/article...

Don't forget that they had to endure 4 years for the undergraduate degree + 2 years Masters + 2+ years PhD = average total of over 10 years.

A PhD takes twice as long as a bachelor's degree to complete. The average student takes 8.2 years to slog through a PhD program and is 33 years old before earning that top diploma. By that age, most Americans with mere bachelor's degree are well into establishing themselves professionally.Jul 10, 2012
https://www.cbsnews.com/news/12-reasons-not-to-get-a-phd/

BB
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A PhD takes twice as long as a bachelor's degree to complete. The average student takes 8.2 years to slog through a PhD program and is 33 years old before earning that top diploma. By that age, most Americans with mere bachelor's degree are well into establishing themselves professionally.Jul 10, 2012
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His was even later, since he worked to put me through med school. He went back to school during my residency. Those were some lean, lean years.

Believe me, most of my college friends have a minimum of a master's and many went past that. I am well aware of the length of time for the schooling! :) Between me and my DH we have 2 bachelors degrees, 3 masters, an MD, and a Ph.D (plus he's ABD on another Ph.D). We joke that we collect schools.

Kristi
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Where I live, a kindergarten music teacher, with a Master's, at the local public school makes over $120k a year with benefits and that data is some years old by now. {I don't look every year}.

Not that hard to become a millionaire saving and investing at 7.5-9% per year, plus escalating salary every year. Only takes time. And you can teach a lot, lot longer than an NFL player can play.

Co-sign that doctors tend to spend way more in my personal experience.
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Naj: "Where I live, a kindergarten music teacher, with a Master's, at the local public school makes over $120k a year with benefits..."

Where do you live?
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Hawkwin: "Both of my inlaws (teachers) retired early with lifetime pensions, SS, and 403b accounts."

Then they were the fortunate ones. Many teachers are subject to offsets and/or do not qualify for SS.

https://www.teacherpensions.org/blog/social-security-windfal...

Regards, JAFO
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Then they were the fortunate ones. Many teachers are subject to offsets and/or do not qualify for SS.

Yes, in those states, they try to replicate SS on a state level. That doesn't mean that they completely lose out, they just get something from the state instead of something from the fed.

Of course, not all states do an equal job of it. And, it doesn't keep them from retiring as millionaires.

Here is CA for example:
https://ed100.org/lessons/pensions

and

https://www.forbes.com/sites/andrewbiggs/2015/08/28/californ...

According to CalSTRS data, employees who worked a full career – from age 23 to age 65 – received an average annual benefit of $110,364, equal to 105% of the employee’s final salary.

Who needs SS if you have a pension worth even close to $100,000 a year?


Here is the kicker - nothing keeps those states, today, from including teachers in SS instead of their state-based solution. There is a law that allows for a state to move their employees into the SS system. Perhaps those teacher strikes could include this request if their feel that are being short-changed by their respective state.
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One other thing, I don't think they are the "fortunate" ones.

It is those teachers in the 15 states where they may be getting less than they otherwise could/should get (and that is not all of them, for some states it is for a percentage of teachers and some teachers do really well without SS) are in reality the "unfortunate" ones.



The teachers in the other 35 states are simply getting what the rest of us non-teachers can get.
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It doesn't surprise me at all that a teacher could save more money then a doctor. It's not how much you make but how much you save and how early you start. A teacher could start saving at 22 years old with a lot less debt then a doctor who would start saving at maybe 28. It's not about how much money you make but how much money you can save and the discipline to not touch it and to keep saving.
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Once I would have also thought it unbelievable that a teacher could save more than a doctor. But I had kind of a shock when I retired at age 62, 3.5 years ago.

When I retired, we switched to my wife's employer's health plan. She worked for one of the big health care outfits in our area, and employees had to go to their doctors, hospitals, and pharmacies.
So we had to get a new primary care physician. OK.

At my initial appointment with him, I told him all this, as he was getting my background info on me as a new patient. And he really kind of shocked me with his comment, "Boy! I wish I could retire at 62!" (My guess is that he's in his fifties.)

And I thought, there's really something wrong with this picture. I'm a CPA, and I made decent money, but not top tier level. I wasn't a partner in the firm, but I had survived a merger, and kind of had my own role in the organization at the manager level. Which is to say that I was a tax specialist in a firm that mostly did audits. But this guy's a doctor? And I can retire at 62, but he can't?

Definitely not what you'd expect. But it happens.

Bill
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Bill""And I thought, there's really something wrong with this picture. I'm a CPA, and I made decent money, but not top tier level. I wasn't a partner in the firm, but I had survived a merger, and kind of had my own role in the organization at the manager level. Which is to say that I was a tax specialist in a firm that mostly did audits. But this guy's a doctor? And I can retire at 62, but he can't?

Definitely not what you'd expect. But it happens."

If you read the MND, you'd learn that doctors have to 'live large'. Actually, after they get out of med school, and do their residency, they want that fancy new car. Maybe a fancy wife who 'is married to a doctor' and spends lavishly. They probably join a $10,000 a year country club. After all, a doctor has 'status'. He's not going to be seen driving a 20 year old car, but likely a Lexus or $$$ car. Mercedes....BMW......

Then, of course, if he has kids, they aren't going to community college or 'one of them state schools'....no way. It's private expensive top rank colleges for the kids....probably including Masters degrees. Maybe med school? Doctor's kids expect the best. Oh, and cars at age 16, and not little Toyota Yaris......more like a Hummer or a Caddy Escalade.....

That's why your doctor can't retire early.

My dentist retired at 60.........

My first doc when I moved to TX probably was 72 when he retired....he last few years he didn't take new patients....and he mainly did aviation physicals for a while......and a few legacy patients.....

Second doc lasted five years before he decided to go into medical records and group coordination as his full time job.....100 doctor practice and he brought in the electronic records end of things and ran it.....no more patients to see......

t.
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Wradical writes,

And I thought, there's really something wrong with this picture. I'm a CPA, and I made decent money, but not top tier level. I wasn't a partner in the firm, but I had survived a merger, and kind of had my own role in the organization at the manager level. Which is to say that I was a tax specialist in a firm that mostly did audits. But this guy's a doctor? And I can retire at 62, but he can't?

Definitely not what you'd expect. But it happens.

</snip>


Yeah, but I'm sure the doctor is driving a fancier car and lives in a better neighborhood.

Would you go to a doctor that drove a Kia to work? <LOL>

intercst
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Would you go to a doctor that drove a Kia to work? <LOL>

——————————————————-

My doctor rides his bike to work.
Tim
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Would you go to a doctor that drove a Kia to work?

How would you know?
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Would you go to a doctor that drove a Kia to work? <LOL>

You mean someone who understands a good value and the desire on my part to put value over high cost flashy labels even in medical care? You bet I would. Happy to use generic meds if they work well.

IP,
driving a 9 year old Hyundai that is still serving me well, even though I could afford to pay cash for any car I wanted
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<<Would you go to a doctor that drove a Kia to work? <LOL> >>


My doc doesn't drive anything that nice. But he's a bit of a surfer hippie who lives and thinks outside the box. Which why I wound up with him. I got tired of allopathic "write a scrip" doctors and went in search of a doc who is serious about functional medicine (identifying and restoring underlying function issues).
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Wradical Bill writes: At my initial appointment with him, I told him all this, as he was getting my background info on me as a new patient. And he really kind of shocked me with his comment, "Boy! I wish I could retire at 62!" (My guess is that he's in his fifties.)

And I thought, there's really something wrong with this picture. I'm a CPA, and I made decent money, but not top tier level. I wasn't a partner in the firm, but I had survived a merger, and kind of had my own role in the organization at the manager level. Which is to say that I was a tax specialist in a firm that mostly did audits. But this guy's a doctor? And I can retire at 62, but he can't?

Definitely not what you'd expect. But it happens.


It happens a lot more than we all realize. Financial Advisors and Planners, Credit Counseling services, tax preparer's, etc... all get to see it on a daily basis a lot more than the rest of us.

Ramsey's study, based on the 10,000 surveyed found:

"The top five careers for millionaires include engineer, accountant, teacher, management and attorney." - https://www.daveramsey.com/research/the-national-study-of-mi...

It's already been mentioned a few times upthread about Stanley & Danko's excellent book "The Millionaire Next Door" that came out in 1996. The original post of this thread that linked to the study conducted by Ramsey Solutions came to a lot of similar conclusions as to how millionaires ended up being millionaires as Stanley & Danko's book. The top 10 list of careers in Stanley and Danko's book are just as interesting.

"How did they hit the million-dollar mark? They did it through consistent investing, avoiding debt like the plague, and smart spending. No lottery tickets. No inheritances. No six-figure incomes."

8 out of 10 contributed to their 401k plans, and 3 out of 4 also contributed to plans outside of the company 401k such as IRA's, HSA's, taxable accounts, etc... . The average hit $1M status by after 28 years of saving.

Anyone maxing out their 401k plus the employer match for 28 years since 1990 is well over $1M in the 401k alone at this point. Charts, graphs, and data about that here:

https://retireby40.org/what-if-always-maxed-401k/

Of course, not all incomes allow (or allowed) for one to cover all household expenses after maxing out, but many make sacrifices to keep lifestyle on the down low especially with the big three items - housing, transportation, and food - to be able to contribute as much as they can.

"The people in the study became millionaires by consistently saving over time. In fact, they worked, saved and invested for an average of 28 years before hitting the million-dollar mark, and most of them reached that milestone at age 49. [That would be after 27 years of working if they began at age 22.]

Three out of four millionaires (75%) said that regular, consistent investing over a long period of time is the reason for their success. So, the story about the young computer genius who developed an app that earned millions overnight is the exception, not the rule."

Pretty similar recipe for success no matter what the career. Perhaps the doctor in Wradical's post was not following the basic tenets of accumulating wealth: regular and consistent investing over a long career, avoiding lifestyle creep, avoiding CC debt, keeping expenses low, etc. Good chance that he had some large debt to service, lifestyle choices to cash flow, college educations for his kids to pay for, and on and on to the point that he wasn't able to pay himself first in the form of saving. It's a common "story" no matter the level of income. Of course, none of us know the true story of the Doc and he may have been saying that in jest based on his own goals, lifestyle, and financial situation.

"Even when millionaires don’t have to worry about money anymore, they’re still careful about their spending. Ninety-four percent of the people we studied said they live on less than they make, and nearly three-quarters of the millionaires have never carried a credit card balance in their lives! They also said they spend $200 or less each month on restaurants. And 93% of millionaires use coupons all or some of the time when shopping. By staying out of debt and watching expenses, they’re able to build their bank accounts instead of trying to get out of a financial hole every month."

It's not always about earning a high salary in many cases.

"Only 31% averaged $100,000 a year over the course of their career, and one-third never made six figures in any single working year of their career."

Perception vs. reality is deeply discussed in Stanley & Danko's book as well. 11 million of the 126.22 million households in the US are millionaires ($1M in investable assets - not including the primary residence). Most you wouldn't be able to tell if they were millionaires by where they live, what they drive, or what they wear, or where their kids go to school.

https://www.cnbc.com/2018/03/21/us-added-700000-new-milliona...

Stanley & Danko found that more millionaires drive Toyota's and Honda's than prestige cars.

http://www.youngincome.com/the-average-millionaire-lives-pre...

https://www.biblemoneymatters.com/what-millionaires-drive-in...

Anyway. None of this is news to most of us.
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Intercst opines:

Would you go to a doctor that drove a Kia to work?


I came out of FIRE (age 45, after 3 years) for an ER job here in Hawaii, all moving expenses paid. I'm back to 2 shifts/month and this doc drives a Prius. And the Prius I got almost free because of the Volkswagen Diesel scandal. They bought back my 4 year old Jetta for almost original list price.

RETim

(p.s. Thanks to everyone over these many years for making my FIRE journey a glorious success)
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Would you go to a doctor that drove a Kia to work?

I have no idea what any of my doctors are driving so that's unimportant. I think I know what my dentist is driving based on what's parked in his parking lot, but it's an older version of what I drive so that's also unimportant.
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Would you go to a doctor that drove a Kia to work?

There's a lot of truth in thinking that the professional who looks *least* like the stereotype is likely to be the best at his job. You know that he's got his position because of competence rather than looking the part. (That's from one of Nassim Taleb's books, I think "Skin In The Game.")
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There's a lot of truth in thinking that the professional who looks *least* like the stereotype is likely to be the best at his job. You know that he's got his position because of competence rather than looking the part. (That's from one of Nassim Taleb's books, I think "Skin In The Game.")

This might be true, but aren't people more willing to trust someone who looks the part, because it fits their mental model of what that professional looks like?

For instance, a DJ can cut their dreads, put on a suit, and become a financial adviser: https://www.nytimes.com/2016/06/11/your-money/deciding-if-a-...

Here's the video: https://youtu.be/yJFrkNY4n1g

Chris
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This might be true, but aren't people more willing to trust someone who looks the part, because it fits their mental model of what that professional looks like?

I'd take a doctor driving an old Honda Accord to work any day over one who pulls up in a top of the line import.

Why? It probably means they are not having to work harder and longer to sustain their lifestyle of living from paycheck to paycheck, and can focus and give more attention to my medical needs due to being fresh rather than burned out.

https://www.physicianonfire.com/doctors-live-paycheck-to-pay...

https://www.mdmag.com/physicians-money-digest/personal-finan...

https://money.cnn.com/2012/01/16/smallbusiness/doctor_money_...

https://www.kevinmd.com/blog/2018/05/10-reasons-why-doctors-...

https://www.kevinmd.com/blog/2011/06/physicians-wealthy.html...
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Northeast suburbs, not NYC. About 20 miles from the city.

The top school superintendents around here take home over $300k. Yep.
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For instance, a DJ can cut their dreads, put on a suit, and become a financial adviser: https://www.nytimes.com/2016/06/11/your-money/deciding-if-a-......

Or the CEO of Goldman can take off his suit and become DJ D-Sol, so I'm not sure that's meaningful info in either direction.
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There's a lot of truth in thinking that the professional who looks *least* like the stereotype is likely to be the best at his job. You know that he's got his position because of competence rather than looking the part. (That's from one of Nassim Taleb's books, I think "Skin In The Game.")

This might be true, but aren't people more willing to trust someone who looks the part, because it fits their mental model of what that professional looks like?

For instance, a DJ can cut their dreads, put on a suit, and become a financial adviser: https://www.nytimes.com/2016/06/11/your-money/deciding-if-a-......

Here's the video: https://youtu.be/yJFrkNY4n1g



Don't you think that illustrates the point I was making rather than refutes it? The person who looks *least* like the stereotypical version of something is more likely to have worked his (or her) way in by skill and effort rather than "looking the part."
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This might be true, but aren't people more willing to trust someone who looks the part, because it fits their mental model of what that professional looks like?

I oversaw hundreds of salespeople during my career. With only a few exceptions those who dressed sharp and drove a moderately new car did better with clients than those who dressed in older clothes and drove a jalopy. One of my best insisted on buying herself a new outfit when she was going in to close a big deal. She drove a Jaguar, and is (now) the owner of a multi-million dollar advertising agency.
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I oversaw hundreds of salespeople during my career. With only a few exceptions those who dressed sharp and drove a moderately new car did better with clients than those who dressed in older clothes and drove a jalopy. One of my best insisted on buying herself a new outfit when she was going in to close a big deal. She drove a Jaguar, and is (now) the owner of a multi-million dollar advertising agency.

With all those expenses, I wonder what her net worth is like!

IP
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I oversaw hundreds of salespeople during my career. With only a few exceptions those who dressed sharp and drove a moderately new car did better with clients than those who dressed in older clothes and drove a jalopy. One of my best insisted on buying herself a new outfit when she was going in to close a big deal. She drove a Jaguar, and is (now) the owner of a multi-million dollar advertising agency.
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With all those expenses, I wonder what her net worth is like! IP


Not taking sides here but there is the old saying: Ya have ta' spend money ta' make money
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"With all those expenses, I wonder what her net worth is like!

IP"

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Unless you plan to give her a loan or marry the lady, why would you care?

Howie52
I care and worry about my own finances.
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Unless you plan to give her a loan or marry the lady, why would you care?

Howie52
I care and worry about my own finances.


Huh. And yet you wasted your precious time replying to my post.

Go figure.
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i could respond to IP’s post and we will go into infinity questioning our motives. :)

It is a message board.
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