Does anybody know an international teacher who wound up retiring overseas? I would think in many places outside the U.S. you could get your retirement money to stretch much further. And seeing as how most international teachers have had a chance to see a lot of the world, they might be suitably prepared to make the choice as to where to spend those "golden years."
We're just getting into this game now. We're in our late 30s with a small child and next to no savings. But we're hoping to save as much as we can over the coming years, and we're keeping the option open to overseas retirement.
We'd love any advice from someone who has experience with this.
Savings, Retirement, and Going Home
I’m glad this topic came up because it is something we have been thinking about a lot lately. We have been overseas for 5 years and have 2 children who were born here. We plan to go recruiting next year. We have no plans to go back to the U.S.
As far as retirement savings go, we are aware that we cannot contribute to our IRAs. Right now we are putting our savings into mutual funds in a regular, taxable account. We have been advised that if we contribute to an annuity, then we can contribute a matching amount to our IRAs. We were told about this through an investment firm so I am not sure if it is the best route or if they are just trying to sell us the annuity.
Does anyone do that? Does it make sense to do that (I’m thinking in terms of taxes and consideration for financial aid when our kids want to go to college)?
We are also wondering about life insurance. We have term life policies, but now that we have kids we are looking for something more. All of the expat policies that I have looked at are much more expensive. Can we get regular, term life insurance through U.S. companies and live overseas?
As far as retirement savings go, we are aware that we cannot contribute to our IRAs. Right now we are putting our savings into mutual funds in a regular, taxable account. We have been advised that if we contribute to an annuity, then we can contribute a matching amount to our IRAs. We were told about this through an investment firm so I am not sure if it is the best route or if they are just trying to sell us the annuity.
Does anyone do that? Does it make sense to do that (I’m thinking in terms of taxes and consideration for financial aid when our kids want to go to college)?
We are also wondering about life insurance. We have term life policies, but now that we have kids we are looking for something more. All of the expat policies that I have looked at are much more expensive. Can we get regular, term life insurance through U.S. companies and live overseas?
You hit it!
"The question is can you save enough overseas that will give you about $50,000 a year in retirement for the rest of your life?"
RobSq's question basically sums up my concern in a nutshell. This is the $50,000 question! I will continue to seek advice and share ideas.
RobSq's question basically sums up my concern in a nutshell. This is the $50,000 question! I will continue to seek advice and share ideas.
Witness, The American School of Dubai no longer pays into Social Security. They used to when they were an ISS school. You might want to check into other ISS schools, because I believe they do pay into Social Security since your contract is actually signed with ISS. You also pay into NJ short term disability, unemployment, etc.
I'm also very interested in this subject. My husband and I are heading overseas for our first international teaching positions this year. We are in our early 30s and have a young child. We also have some debt (student loans mostly). Although our starting income will be good, I doubt it will be enough to both save and pay off our debts--let alone begin to save for retirement.
We knew we wanted to go overseas to teach, but didn't think through the savings part very much. Now that I am, I'm starting to feel a bit worried. Although I think we will be happy at our new school, we will probably be going to another fair in a few years to look for a school that offers a better package, where we can then stay for a number of years and save more money.
I know some schools offer a retirement fund contribution (ours, sadly, does not). Can anyone share their experiences with those funds? Is it possible to carry them from school to school? If not--what happens to it if/when you leave your school? Is it a smart investment to put the maximum amount allowed into such an account, or is it better invested elsewhere?
I appreciate the tip about looking for schools that pay into US SS. I hadn't thought about that before. Other than that and a retirement fund, any other such benefits that I should really be looking for on the next go round?
We knew we wanted to go overseas to teach, but didn't think through the savings part very much. Now that I am, I'm starting to feel a bit worried. Although I think we will be happy at our new school, we will probably be going to another fair in a few years to look for a school that offers a better package, where we can then stay for a number of years and save more money.
I know some schools offer a retirement fund contribution (ours, sadly, does not). Can anyone share their experiences with those funds? Is it possible to carry them from school to school? If not--what happens to it if/when you leave your school? Is it a smart investment to put the maximum amount allowed into such an account, or is it better invested elsewhere?
I appreciate the tip about looking for schools that pay into US SS. I hadn't thought about that before. Other than that and a retirement fund, any other such benefits that I should really be looking for on the next go round?
Sahara, just a word of caution. From my experience the first year, or at least the first six months, of a new position can be very expensive. Even with experience at a number of different schools I always panic when I begin to count how much we spend vs how much we are saving. It costs money to set up a household, and it is always more expensive to shop etc until you figure out the "lay of the land". I assume one reason you joined the circuit is to travel, that can be expensive as well until you learn what hotels to stay in, who offers discount flights, when is the best time to go etc. You will also learn quite quickly what activities truly cost a lot of money and then you can pick and choose what you want to do.
Also, remember its not how much you earn, its how much it costs to live wherever you are going. My wife and I have worked in schools where we barely made $50,000 together but even with three kids we managed to save a great deal because the cost of living was so little.
Good luck in your new adventure, I am sure you will enjoy it!
Also, remember its not how much you earn, its how much it costs to live wherever you are going. My wife and I have worked in schools where we barely made $50,000 together but even with three kids we managed to save a great deal because the cost of living was so little.
Good luck in your new adventure, I am sure you will enjoy it!
I'd like to pose a question, first: Do you teach overseas for the money, experience, or both? And are you committed to the education profession of and advancing with it? Stateside and international teaching are two different systems. Each has advantages. Each has disadvantages. Every person must sort out these issues on their own, I believe. There are oodles of examples of people who have made the best of each of these worlds, and those who have really struggled.
My husband and I are currently in education in the states -- have been for 7 years now. (You can read my past posts for more details.) We taught overseas for 10 years where we paid off college debts, started investments, took amazing vacations and travels, spent too much money unwisely, had our kids and then came back so our children could know their aging grandparents. We were at an OK place financially when we returned, yet we did not know how fast our international earnings would slip away once back in the states. If you stay overseas too long (who knows how long too long is!), you can definitely get a warped sense of the value of money AND of being responsible with your earnings.
We experienced some serious shock the first few years in the USA with all the expenses we had forgotten about living overseas -- insurances, cars, gasoline, home ownership issues, utilities, food, supporting children in activities. Not even to mention learning to clean your own house and do your own laundry and not being able to get a massage or a pedicure for a few bucks on a weekly basis. International living is very different than stateside living for public servants in education.
What we also realized right away was that we were very behind in public schools with regards to curriculum, teaching practices, etc. The system had gone on without us and here we felt we were really up on everything by going to NESA and other little trainings here and there. Not true. NCLB was in full swing. Good public schools are data-driven. We were 'fish out of water' and had to learn to swim real fast. My husband got a job first. He started his 2nd masters degree immediately. I started my 2nd masters degree soon thereafter and began teaching at university level. Then I went back into public schools.
Today, we have fantastic jobs with excellent health insurance, and retirement programs. We make twice the money now that we made overseas, yet we have more than enough bills. We've saved for our children's colleges through GETS funds since the day they were born. We have huge equity in our home that we bought when we returned at a very low locked interest rate.
Public education is NOT easy. It's not for the timid. The continued required training and certifications are endless. But like I said in the beginning, the two systems are different and there are advantages and disadvantages to both.
My husband and I are currently in education in the states -- have been for 7 years now. (You can read my past posts for more details.) We taught overseas for 10 years where we paid off college debts, started investments, took amazing vacations and travels, spent too much money unwisely, had our kids and then came back so our children could know their aging grandparents. We were at an OK place financially when we returned, yet we did not know how fast our international earnings would slip away once back in the states. If you stay overseas too long (who knows how long too long is!), you can definitely get a warped sense of the value of money AND of being responsible with your earnings.
We experienced some serious shock the first few years in the USA with all the expenses we had forgotten about living overseas -- insurances, cars, gasoline, home ownership issues, utilities, food, supporting children in activities. Not even to mention learning to clean your own house and do your own laundry and not being able to get a massage or a pedicure for a few bucks on a weekly basis. International living is very different than stateside living for public servants in education.
What we also realized right away was that we were very behind in public schools with regards to curriculum, teaching practices, etc. The system had gone on without us and here we felt we were really up on everything by going to NESA and other little trainings here and there. Not true. NCLB was in full swing. Good public schools are data-driven. We were 'fish out of water' and had to learn to swim real fast. My husband got a job first. He started his 2nd masters degree immediately. I started my 2nd masters degree soon thereafter and began teaching at university level. Then I went back into public schools.
Today, we have fantastic jobs with excellent health insurance, and retirement programs. We make twice the money now that we made overseas, yet we have more than enough bills. We've saved for our children's colleges through GETS funds since the day they were born. We have huge equity in our home that we bought when we returned at a very low locked interest rate.
Public education is NOT easy. It's not for the timid. The continued required training and certifications are endless. But like I said in the beginning, the two systems are different and there are advantages and disadvantages to both.
[quote="stateside"]I'd like to pose a question, first: Do you teach overseas for the money, experience, or both? And are you committed to the education profession of and advancing with it? [/quote]
My husband and I are definitely doing it for the experience of living abroad and experiencing another culture. Well--if we couldn't make a living teaching abroad and save some money as well, at least on par with what we could do if we stayed put, we probably wouldn't be doing it. We didn't get into teaching for the money of course, but you have to make a living. We consider teaching abroad as the best way to combine two things we really love, teaching and traveling. Being able to save money and plan for the future--a necessity, but not the motive for teaching overseas.
I'm actually pretty new to the teaching profession, and just finished my M.Ed. I wasn't thrilled with my experience in a public school here in the US--most of the teachers I worked with were very dedicated and passionate about teaching and their love of their students was evident. BUT, they were being constrained by the system they were in and by NCLB. They had so little freedom to do what they knew to be best for the kids. I'm hoping my experience abroad will be different and I'll have more freedom to teach they way that I believe is best.
Overhere--thanks for the caution. I suspected as much. We've put our loans on deferment for a year for that reason--we're not expecting to be able to save much right away. We're also not planning on much travel the first year, except perhaps in-country. Though we do hope to do a bit of traveling elsewhere at some point.
My husband and I are definitely doing it for the experience of living abroad and experiencing another culture. Well--if we couldn't make a living teaching abroad and save some money as well, at least on par with what we could do if we stayed put, we probably wouldn't be doing it. We didn't get into teaching for the money of course, but you have to make a living. We consider teaching abroad as the best way to combine two things we really love, teaching and traveling. Being able to save money and plan for the future--a necessity, but not the motive for teaching overseas.
I'm actually pretty new to the teaching profession, and just finished my M.Ed. I wasn't thrilled with my experience in a public school here in the US--most of the teachers I worked with were very dedicated and passionate about teaching and their love of their students was evident. BUT, they were being constrained by the system they were in and by NCLB. They had so little freedom to do what they knew to be best for the kids. I'm hoping my experience abroad will be different and I'll have more freedom to teach they way that I believe is best.
Overhere--thanks for the caution. I suspected as much. We've put our loans on deferment for a year for that reason--we're not expecting to be able to save much right away. We're also not planning on much travel the first year, except perhaps in-country. Though we do hope to do a bit of traveling elsewhere at some point.
One thing to keep in mind is that if you are already vested into a state teacher retirement back in the states U have some options to buy years. In California for example you can buy up to 5 years teaching experience. You have to be presently employed by a public school in California to buy your years but it is possible.
It takes 5 years to be vested in STRS in Cali. Once you are then any year you come back after that will count towards your retirement. In order to buy years you will have to presently be working in the public schools of california.
Now the cost to buy years changes as you make more money in your salary and as your age increases. But I think a good figure to factor it up on is that to buy 5 years of your retirement it will cost you roughly a years gross salary. You can finance the cost over 10 years at like 5% interest and take it out of your checks or you can pay in a lump sum.
Thus if you leave for 5 years and save money, although you don't have a pension internationally many times, you can come back and take that money you saved and buy years in your states retirement system. It will vary state by state but there are provisions in each state. Something to think about that will give you more freedom.
It takes 5 years to be vested in STRS in Cali. Once you are then any year you come back after that will count towards your retirement. In order to buy years you will have to presently be working in the public schools of california.
Now the cost to buy years changes as you make more money in your salary and as your age increases. But I think a good figure to factor it up on is that to buy 5 years of your retirement it will cost you roughly a years gross salary. You can finance the cost over 10 years at like 5% interest and take it out of your checks or you can pay in a lump sum.
Thus if you leave for 5 years and save money, although you don't have a pension internationally many times, you can come back and take that money you saved and buy years in your states retirement system. It will vary state by state but there are provisions in each state. Something to think about that will give you more freedom.
Decent resource
If you are looking for state specific information, this forum might be of help (AZ Teacher Forum)
http://forums.atozteacherstuff.com/inde ... 36af295573
http://forums.atozteacherstuff.com/inde ... 36af295573
-
hydrogonian
- Posts: 9
- Joined: Wed Aug 05, 2009 7:10 pm
Re: My 2 cents again
[quote="RobSg"]Hi-
I've known may teachers who have taught overseas their whole professional life. You DO save more money overseas. No question about that. You have more money in the bank. No question about that either. However, you need to factor in the state teacher retirement plans that are also great. The money you save and put in the bank needs to be re-invested to give yourself a pension when you retire.
The question is can you save enough overseas that will give you about $50,000 a year in retirement for the rest of your life? If you can, it's great.
Rob[/quote]
Exactly. Its all about cash flow. Depending on pure savings for a retirement, stateside or abroad, is a risky game. Its cash flow that matters, as it wont run out. Pensions provide this. Unfortunately, the majority of workers in the sates have no pension and will depend on their social security payments. Fortunately, teachers are an exception to this, but for how long? How long until new stateside teachers are handed the matching 401K? The problem with IS teaching is that you have no pension and, if you are not careful, will not be eligable for social securiy payments unless you have 40 quarters(10 years) paying into the system. Therefore, you have to be creative. Real estate and interent businesses are probably your best bet for cash flow. Real Estate is difficult, but many people LUCKILY buy right.
For those of you saving 30k per month, and considering that as doing well, I agree if you are not counting on that for retirement. Because you would have to do that for 30 or more years to equal what you would get in a pension each year, and even then you would be getting about 20k more per year on an average stateside teachers retirement pension. Also, who knows how long you will live or what life circumstances will lead you to deplete that account before you retire? Hope that you dont get the alzheimers.
I agree with the living life for now philosophy. You dont want to wait until 60 to start living.
So option 1 is just not to care. This is a legitimate strategy if you dont have kids. Just trust that life will eventually deal you the cards that will enable you to live a comfortable retirement somewhere. But I would plan on doing this in a much cheaper locale than the states. Or try to marry a local of a socialist country in which you will teach.
The second option is to have side businesses such as book writing or internet ventures.
The third option is real estate.
The fourth option is to teach in the states to get that pension.
I would rather bury my cash in a hole in the desert than to give it to a money manager or put it into the stock market. The odds are just too heavily weighted against you. Trust me, I know what Im talking about. The only exception to this would be to look into putting it into a swiss annuity, as they are very regulated, conservative, secure, and well managed. However, I would argue that buying a business or property in your retirement, that you can touch, see, and personally manage might give better returns. If you dont have the mind or the energy for it, then look into those swiss annuities.
I've known may teachers who have taught overseas their whole professional life. You DO save more money overseas. No question about that. You have more money in the bank. No question about that either. However, you need to factor in the state teacher retirement plans that are also great. The money you save and put in the bank needs to be re-invested to give yourself a pension when you retire.
The question is can you save enough overseas that will give you about $50,000 a year in retirement for the rest of your life? If you can, it's great.
Rob[/quote]
Exactly. Its all about cash flow. Depending on pure savings for a retirement, stateside or abroad, is a risky game. Its cash flow that matters, as it wont run out. Pensions provide this. Unfortunately, the majority of workers in the sates have no pension and will depend on their social security payments. Fortunately, teachers are an exception to this, but for how long? How long until new stateside teachers are handed the matching 401K? The problem with IS teaching is that you have no pension and, if you are not careful, will not be eligable for social securiy payments unless you have 40 quarters(10 years) paying into the system. Therefore, you have to be creative. Real estate and interent businesses are probably your best bet for cash flow. Real Estate is difficult, but many people LUCKILY buy right.
For those of you saving 30k per month, and considering that as doing well, I agree if you are not counting on that for retirement. Because you would have to do that for 30 or more years to equal what you would get in a pension each year, and even then you would be getting about 20k more per year on an average stateside teachers retirement pension. Also, who knows how long you will live or what life circumstances will lead you to deplete that account before you retire? Hope that you dont get the alzheimers.
I agree with the living life for now philosophy. You dont want to wait until 60 to start living.
So option 1 is just not to care. This is a legitimate strategy if you dont have kids. Just trust that life will eventually deal you the cards that will enable you to live a comfortable retirement somewhere. But I would plan on doing this in a much cheaper locale than the states. Or try to marry a local of a socialist country in which you will teach.
The second option is to have side businesses such as book writing or internet ventures.
The third option is real estate.
The fourth option is to teach in the states to get that pension.
I would rather bury my cash in a hole in the desert than to give it to a money manager or put it into the stock market. The odds are just too heavily weighted against you. Trust me, I know what Im talking about. The only exception to this would be to look into putting it into a swiss annuity, as they are very regulated, conservative, secure, and well managed. However, I would argue that buying a business or property in your retirement, that you can touch, see, and personally manage might give better returns. If you dont have the mind or the energy for it, then look into those swiss annuities.
Some really interesting discussions on this topic and I for one really appreciate all of the advice and information. I've been in the states for the last ten years since teaching overseas, and both my wife and I are completely gobsmacked by NCLB and the testing requirements therein. So much emphasis on teaching to the test and very little, if any, emphasis on creativity. We have friends that teach in private schools and they simply shake their heads when we tell them of all the "state mandates" and "requirements" that come down the pike. I have one colleague who teaches calculus to underclassmen (high achievers, these) but must stop instruction once a day to perform mandated practice for the state exam that focuses on beginning Algebra......
As for money, yes---it plays a huge part in our decision to return overseas. I don't think there is anything wrong with that nor should anyone ever apologize for that particular line of reasoning. Like many of you, I've worked extremely hard in my profession; I have advanced degrees, national board certification, and taught AP/IB classes as well as classes that couldn't spell AP or IB. I attend conferences and workshops over the summer related to my subject and mentor new teachers for a program in my district. I do and have all of this, yet cannot afford a home in my region (at least, not one where I don't have to put bars on the window). Therefore, what both my wife and I see in international education is much more of a free market, where those teachers that can demonstrate mastery of subject and skills will be compensated for their hard work and level of dedication; compare this to public ed where a guy who has more years experience but never takes home work or stays past the bell will ALWAYS make more than someone with less experience but stays late for clubs and tutoring and grades essays into the wee hours of the night! In this economy all we have seen in my state are cuts, cuts, and more cuts. No raises in years and insurance premiums going up and up. My wife and I, if we are lucky, might save 3-5K per year as we are debt free. When you compare this the possibility of saving 20, 30, 40, even 50(!)K per year while living well and debt free AND having some teaching flexibility outside NCLB AND seeing our child grow in an international environment AND experience a new culture.....I'm just not seeing a down-side to international teaching in comparison our current situation (other than the fact that portion sizes are smaller and I may have to watch football at 4 in the morning).
I do think that it will take more responsibility on our part to invest our money wisely and definitely for the long-term. And while state pensions are typically safe, they are not untouchable--many retired teachers are desperately trying to get back in the system since as their pensions have lost tremendous value with the downturn in the economy.
So, someone please tell me that I am misguided or erroneous in my logic so I can stop reading these boards, stop being thinking about winter job fairs, stop reading the school reviews, and instead begin focusing my attention on my upcoming classes that begin in two weeks! : )
As for money, yes---it plays a huge part in our decision to return overseas. I don't think there is anything wrong with that nor should anyone ever apologize for that particular line of reasoning. Like many of you, I've worked extremely hard in my profession; I have advanced degrees, national board certification, and taught AP/IB classes as well as classes that couldn't spell AP or IB. I attend conferences and workshops over the summer related to my subject and mentor new teachers for a program in my district. I do and have all of this, yet cannot afford a home in my region (at least, not one where I don't have to put bars on the window). Therefore, what both my wife and I see in international education is much more of a free market, where those teachers that can demonstrate mastery of subject and skills will be compensated for their hard work and level of dedication; compare this to public ed where a guy who has more years experience but never takes home work or stays past the bell will ALWAYS make more than someone with less experience but stays late for clubs and tutoring and grades essays into the wee hours of the night! In this economy all we have seen in my state are cuts, cuts, and more cuts. No raises in years and insurance premiums going up and up. My wife and I, if we are lucky, might save 3-5K per year as we are debt free. When you compare this the possibility of saving 20, 30, 40, even 50(!)K per year while living well and debt free AND having some teaching flexibility outside NCLB AND seeing our child grow in an international environment AND experience a new culture.....I'm just not seeing a down-side to international teaching in comparison our current situation (other than the fact that portion sizes are smaller and I may have to watch football at 4 in the morning).
I do think that it will take more responsibility on our part to invest our money wisely and definitely for the long-term. And while state pensions are typically safe, they are not untouchable--many retired teachers are desperately trying to get back in the system since as their pensions have lost tremendous value with the downturn in the economy.
So, someone please tell me that I am misguided or erroneous in my logic so I can stop reading these boards, stop being thinking about winter job fairs, stop reading the school reviews, and instead begin focusing my attention on my upcoming classes that begin in two weeks! : )