Reply to Unpopular opinion: DCPS teachers are super well paid!

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Since we’re talking salaries and be edits, the public would be well-serviced by hiring a financial planner to come in each year and present to teachers about their pension benefit. Since teachers are not high-income, most probably don’t understand how valuable their defined benefit pension plan is.

For example, I suppose you’re a teacher that starts after college and retires at age 62 with 40 years of service. Assume further your highest three salaries are $120,000.

In this scenario, you would receive at least 80% of your income annually for life just from the single defined-benefit component. To purchase this product in the market right now would cost you $1.3 million dollars. So, just the single (albeit main) prong of your retirement is worth $1.3m. Teaching for five more years would raise the cost of the an unity to $1.5m.

Most people with defined benefit plans are not particularly high-income and so, I suspect, they don’t realize how incredibly valuable their pension plan is.

When you add social security on top, teachers easily receive more than 100% of their working income in retirement. IRAs and 401(k)s, like most non-public employees have exclusively, are additional valuable savings vehicles. But it is all about the DB pension. 
[/quote]

Very very few teachers in DC have anywhere near 40 years of service at retirement and they are excluded from social security.

Pension is still great.  Just fact checking the details.[/quote]

Most teachers also can't contribute to an IRA, as the pension changes the threshold maximum for cutting off the deduction. Roth IRAs are an option. 401k is also not an option. We have the government 457 plan, and lots of extremely high cost 403b plans.

I agree, though, that the pension is an incredible benefit. Just wanted to make sure that the rest of the financial options are correctly understood.[/quote]

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