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How can a single income public school teacher in their mid 40s with kids amass $600,000? Is this even possible? How much of this is unearned income that is attributable to pure luck - i.e. inheritance, real estate appreciation etc.?
I would bet a majority of it is real estate appreciation, but he's also had 20+ years of steady employment and if he's been investing steadily the whole time he would be right on track. Some people are also ok with plain lifestyles - almost austere- for a big payout at the retirement.
I do wish they'd provide more info in these type of snapshots that articles usually provide. If they've been extremely frugal and he's been investing since the get-go I suppose it's possible for them to be at that range of net worth. Maybe he bought a house in the right place and that accounts for most of the net worth, maybe one of their parents bought them a home, maybe they received an inheritance. Not really a lot you can learn from a 150 word article like that, though the brief mention of keeping fees low is good advice.
How can a single income public school teacher in their mid 40s with kids amass $600,000? Is this even possible? How much of this is unearned income that is attributable to pure luck - i.e. inheritance, real estate appreciation etc.?
I was thinking that maybe his wife worked and they saved most of her income before she became a stay at home mom.
How can a single income public school teacher in their mid 40s with kids amass $600,000? Is this even possible? How much of this is unearned income that is attributable to pure luck - i.e. inheritance, real estate appreciation etc.?
I think it is very doable. A little real estate appreciation on the house, frugal living, maybe the stay at home mom worked before having kids...
My own situation is similar; though both spouses work-one part time.
How's it hard to believe? The average teacher in NJ probably makes $60k a year. Assuming he worked 20 years and saved $10,000 a year at 7%, he'd be at $400k. It's not that hard for a single person to live off $30k, half a teacher's salary, so he could have saved more than ~15% of his gross. The stay at home mom is probably college educated and worked, very uncommon nowadays for people to marry outside of their class. Add in any assets she accumulated, equity in the home, a couple modest cars, present value of his pension... Doable.
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The PERS employee pension contribution rate is increased from 5.5% to 6.5% of salary. An additional increase to be phased over the next 7 years will bring the total pension contribution rate to 7.5% of salary.
The TPAF employee pension contribution rate is increased from 5.5% to 6.5% of salary. An additional increase to be phased over the next 7 years will bring the total pension contribution rate to 7.5% of salary.
The PFRS employee pension contribution rate is increased from 8.5% to 10% of salary.
The SPRS employee pension contribution rate is increased from 7.5% to 9% of salary.
For JRS members the employee pension contribution rate will see a phased increase of an additional 9% of salary over 7 years beginning October 2011.
Cost-of-Living Adjustments (COLA) are suspended for all current and future retirees of all retirement systems.
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It looks like most of these increases went into effect Oct 2011.
I'm a PERS employee in another state - and my contribution is 9%.
Last edited by Gandalara; 07-22-2012 at 10:55 AM..
Reason: Added date.
How can a single income public school teacher in their mid 40s with kids amass $600,000? Is this even possible? How much of this is unearned income that is attributable to pure luck - i.e. inheritance, real estate appreciation etc.?
Teachers are notorious for being frugal with their money. I know a good number of teachers who are millionaires, excluding the impact of their retirement funds.
Also remember that teacher pay has increased a lot over the past twenty-five years. The local teacher pay is $60-80k with some earning over $100k when you include supplemental pay (i.e., coaches, drivers training, etc.)
Also, many teachers, firemen, and police officers have side businesses. The guy who recently refinished my hardwood floors teaches in a local high school. The waiter at the local tapas restaurant that we go to occasionally also waits teaches Spanish in another high school.
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