How much is optimal to have in 401K when retiring?

[mjkacmom]

Depends where you live. Our school board always votes with the teacher’s union so our property taxes go up big time every year. We live in a middle class suburb and houses in our neighborhood pay between $8000/$10000 a year for school taxes!

I honestly don’t know anyone paying $10,000, our average is over that.

 

[Dakota731]

You are talking about local tax money for the local school districts. State taxes pay for the retirement programs.

Not that simple. Because of the high costs of the pensions, state funds to the districts are lower so taxpayers make up the difference. Something needs to change in our state but unions are too strong here

 

[kymom99]

Not that simple. Because of the high costs of the pensions, state funds to the districts are lower so taxpayers make up the difference. Something needs to change in our state but unions are too strong here

But what I'm saying is, our local district doesn't pay any of our retirement. It is a state system, funded by the teacher contributions and state contributions.

 

[disneymagicgirl]

I honestly don’t know anyone paying $10,000, our average is over that.

Thank God for TN.

 

[Dakota731]

But what I'm saying is, our local district doesn't pay any of our retirement. It is a state system, funded by the teacher contributions and state contributions.

But what I’m saying is in OUR state school districts (via property taxes) pay over 32% of teacher pension costs. I guess every state operates differently, but here property taxes are bankrupting senior citizens and discouraging young people from home ownership so hopefully changes to the system will be made soon.

 

[mjkacmom]

But what I’m saying is in OUR state school districts (via property taxes) pay over 32% of teacher pension costs. I guess every state operates differently, but here property taxes are bankrupting senior citizens and discouraging young people from home ownership so hopefully changes to the system will be made soon.

But, property values, at least here, are closely tied to how good the school system is. My kids will all be out of the school system soon, but I vote yes for every budget and referendum, even though my property taxes have increase almost $10,000 since we purchased our home 20 years ago. I don’t mind my money going to the schools, I mind the government corruption at the state level.

 

[Dakota731]

I don’t mind my money going to the schools

I don’t mind money going to the schools either, however in our area music and art programs are being cut as well as many other beneficial programs to pay pensions for teachers who contribute very little to their retirement. Teachers here earn 95% of their highest year’s income for the rest of their lives staring at age 57 plus keep their healthcare. I have neighbors who were both teachers making $190,000 a year in pension plus social security and insurance. I think teachers have a hard job but I don't know anyone in the private sector (many who work just as hard) who get quite as lucrative a deal as this.

 

[Dakota731]

Personnel costs consume about 80 percent of school districts' budgets, according to the Educational Research Service, an Alexandria, Va., nonprofit that examines K-12 data and policy.

You also have to factor in utilities, transportation etc. So that doesn’t leave a lot for books, music, art, sports, special education etc. There is a pension crisis in this country that needs to be addressed immediately. A good start would be to enact a 401k system that teachers contribute to just like the one most Americans use for their retirement.

 

[rkstocke5609]

Well, the last few posts have convinced me that there’s trouble on the horizon. I’m just gonna keep enjoying my Disney trips as long as they are available because these numbers discussed are absolutely unsustainable. Don’t save too much for the future, get out there and enjoy the here and now!

 

[focusondisney]

I don’t mind money going to the schools either, however in our area music and art programs are being cut as well as many other beneficial programs to pay pensions for teachers who contribute very little to their retirement. Teachers here earn 95% of their highest year’s income for the rest of their lives staring at age 57 plus keep their healthcare. I have neighbors who were both teachers making $190,000 a year in pension plus social security and insurance. I think teachers have a hard job but I don't know anyone in the private sector (many who work just as hard) who get quite as lucrative a deal as this.

Sorry, that just burns me. I am an RN, working for 40 years already in an inner city hospital. I still have a little over 4 years til I retire at 65. I do have a pension but it certainly won't be 95% of my salary, even at 65. More like 50% & will be reduced even more because I am choosing a survivor benefit for my DH. And NO health care in retirement. So I will work til I qualify for Medicare. And then pay for my own supplemental insurance, just like everyone else. And 40+ years of nursing is hard both physically & emotionally. As are many other jobs in the private sector.

I really see no reason for most people being paid by taxpayers to retire at 57 (or even earlier for some!) & make their full retirement. Not when the rest of us, those footing their bill, have to work for 8 -10 years or more past that for our own retirement. Yes, police & firefighters are risky, physically demanding jobs & I understand early retirement for them. The public safety depends on them being physically able to do their jobs. But for everyone else, just not sustainable or right for the taxpayers to keep funding those kinds of benefits.

 

[crisi]

Sorry, that just burns me. I am an RN, working for 40 years already in an inner city hospital. I still have a little over 4 years til I retire at 65. I do have a pension but it certainly won't be 95% of my salary, even at 65. More like 50% & will be reduced even more because I am choosing a survivor benefit for my DH. And NO health care in retirement. So I will work til I qualify for Medicare. And then pay for my own supplemental insurance, just like everyone else. And 40+ years of nursing is hard both physically & emotionally. As are many other jobs in the private sector.

I really see no reason for most people being paid by taxpayers to retire at 57 (or even earlier for some!) & make their full retirement. Not when the rest of us, those footing their bill, have to work for 8 -10 years or more past that for our own retirement. Yes, police & firefighters are risky, physically demanding jobs & I understand early retirement for them. The public safety depends on them being physically able to do their jobs. But for everyone else, just not sustainable or right for the taxpayers to keep funding those kinds of benefits.

Because that is the deal teachers signed onto 30 years ago when they signed up to teach. They were contracted for that and promised that. And if you had a problem with that, the time to address it would have been when teachers got those contracts, not now, now they are legally entitled to them. If you wanted that deal, you should have been a teacher and not a nurse.

(I happen to think teachers pensions are one of those things that was ill thought out at the time. MOST post WWII pensions were ill thought out at the time, teachers aren't the only ones. But I'm not blaming teachers, I'm blaming our politicians who agreed to their pension system. Put the blame where it belongs, on the people whose job it was to manage the budgets. And teachers pensions are spilt milk - very few states have the same lucrative pension deal for teachers entering the field now.).

 

[WVMomof3]

I don’t mind money going to the schools either, however in our area music and art programs are being cut as well as many other beneficial programs to pay pensions for teachers who contribute very little to their retirement. Teachers here earn 95% of their highest year’s income for the rest of their lives staring at age 57 plus keep their healthcare. I have neighbors who were both teachers making $190,000 a year in pension plus social security and insurance. I think teachers have a hard job but I don't know anyone in the private sector (many who work just as hard) who get quite as lucrative a deal as this.

What state are you in? Going by your name, I checked both North and South Dakota and this does not seem to be true for either state.

 

[DLgal]

What state are you in? Going by your name, I checked both North and South Dakota and this does not seem to be true for either state.

It's true in CA...

https://www.forbes.com/sites/andrew...est-but-calstrs-doesnt-want-you-to-know-that/

My sister is a kindergarten teacher and her salary is already over $100k. She can retire in 9 years at the age of 54 and get lifetime pension of well over $100k/year. That is insane.

 

[Judique]

What state are you in? Going by your name, I checked both North and South Dakota and this does not seem to be true for either state.

I'm just guessing - New Jersey??

 

[kymom99]

Kentucky teachers don't earn near that much

 

[kymom99]

It's true in CA...

https://www.forbes.com/sites/andrew...est-but-calstrs-doesnt-want-you-to-know-that/

My sister is a kindergarten teacher and her salary is already over $100k. She can retire in 9 years at the age of 54 and get lifetime pension of well over $100k/year. That is insane.

Cost of living is much higher in California vs. Kentucky, for example. I retired at 70K.

 

[CalDisneyMomof2]

It's true in CA...

https://www.forbes.com/sites/andrew...est-but-calstrs-doesnt-want-you-to-know-that/

My sister is a kindergarten teacher and her salary is already over $100k. She can retire in 9 years at the age of 54 and get lifetime pension of well over $100k/year. That is insane.

I can confirm this! (Also, salaries are public knowledge) I have clients (husband and wife) who get massages EVERY month, go on weekend getaways almost monthly and 2-3 big trips per year (they just got back from a Panama Canal Cruise plus a few extra days afterwards that lasted 3 weeks). In September they did a month long European vacation including one of those swanky river cruises. They also have season tickets to a local MLB team. Their home is worth about a million dollars but they could have also purchased it many years ago so that's somewhat irrelevant. (Although, their property taxes are nothing to sneeze at nearly $8,000 a year - again, public knowledge)

My point, they're both retired teachers in their early 60s and have been retired for several years. I'm sure there was planning and saving on their part also but I chose the wrong profession!

 

[kymom99]

It's true in CA...

https://www.forbes.com/sites/andrew...est-but-calstrs-doesnt-want-you-to-know-that/

My sister is a kindergarten teacher and her salary is already over $100k. She can retire in 9 years at the age of 54 and get lifetime pension of well over $100k/year. That is insane.

According o this article, that is someone working to age 65.

For those of you who think teacher pensions are too high, don't make blanket statements please. Every state is different and cost of living is not the same from one state to another. To me, 100k is a lot of money. To people in other states its barely enough to pay the bills. Also, don't assume everyone has a paid off house. People who get divorced, etc. may be starting over. They will need as much in retirement as they needed when working. I'm not saying their pension should cover all of that, but when you are making a modest salary compared to level of education required, you are hard pressed to be able to save a lot on your own. I paid 13% of my salary into my teacher's pension. That's a lot of money off my bottom line.

 

[kymom99]

I can confirm this! (Also, salaries are public knowledge) I have clients (husband and wife) who get massages EVERY month, go on weekend getaways almost monthly and 2-3 big trips per year (they just got back from a Panama Canal Cruise plus a few extra days afterwards that lasted 3 weeks). In September they did a month long European vacation including one of those swanky river cruises. They also have season tickets to a local MLB team. Their home is worth about a million dollars but they could have also purchased it many years ago so that's somewhat irrelevant. (Although, their property taxes are nothing to sneeze at nearly $8,000 a year - again, public knowledge)

My point, they're both retired teachers in their early 60s and have been retired for several years. I'm sure there was planning and saving on their part also but I chose the wrong profession!

Wow! You just described my sister and brother in law. She is a nurse and he is a carpenter.

 

[DLgal]

According o this article, that is someone working to age 65.

For those of you who think teacher pensions are too high, don't make blanket statements please. Every state is different and cost of living is not the same from one state to another. To me, 100k is a lot of money. To people in other states its barely enough to pay the bills. Also, don't assume everyone has a paid off house. People who get divorced, etc. may be starting over. They will need as much in retirement as they needed when working. I'm not saying their pension should cover all of that, but when you are making a modest salary compared to level of education required, you are hard pressed to be able to save a lot on your own. I paid 13% of my salary into my teacher's pension. That's a lot of money off my bottom line.

No, working to 65 gets you 105%. Working for 30 years gets you 95%. My sister currently makes $97k. In nine years, she will be over $100k. She will retire at 30 years, and will get $95k for life plus health insurance.