I am an American and I have spent most of my years teaching overseas since graduating from university. My family is debt free and we have been able to save and invest some decent money the past couple of years, although times are rough now and things are going down. I have a number of concerns as I approach 40:
1. Should my family go home and should I put time in the public school system, so we can collect social security and medicare, etc. when we retire? Right now, I cannot envision our family surviving when we retire in the U.S. with the costs of healthcare there.
2. Will I face age discrimination if I wait too long to go home? I teach in a high need area and I feel pretty confident that I could get a job now.
3. Is teaching overseas with a family a realistic possibility (and being able to retire and live comfortably some day)?
We are not opposed to going home, although our experiences teaching overseas and our opportunities to travel are wonderful and, in my opinion, far [i]more [/i]rewarding that teaching the U.S. public school system. In the end, I guess I am just wondering if I am making a mistake by staying overseas too long, or if my dream is, in fact, a pipe dream. Family and friends at home are concerned about our future and have planted a seed that is really making me question if we are doing is right.
Sorry for the long-winded message. I would love to hear any comments from other teachers/families who are doing what we are doing and if people, particularly Americans with our health care system, are able to save for retirement. Thanks!
Savings, Retirement, and Going Home
Hard question
That is a hard question. My folks and I spent nearly 20 years overseas. My folks came back to the US in their mid 50's as teachers. They didn't perceive any age discrimination, and they had saved money from living overseas.
However they hadn't saved enough (obviously that all depends). They are now still teaching in the US system and nearly 70 years old. They both feel they need to keep teaching a few more years to build up their retirement- and then it will be tight. Looking back they feel they should have bought property and planned for retirement better. Others did and are fine.
If you are going to stay overseas with kids, you need to have a very robust retirement plan. I would also factor in whether or not you can stay overseas if you kids go to college in the States.
We know teachers who have made a career of living overseas and invested well.
As I plan on going back overseas in my mid 40's, I realize I will be giving up retirement years that I'm building right now. I have teacher friends in their 40's that have been teaching for 15 years, and need 15 more to reach 30 years experience. They'll then retire at a percentage of their salary- in their late 50's. Their last few years of teaching they'll be making in the low 90's, so their retirement income will be pretty good. Plus if they own their own home, its even better.
If I go over I'll need to aggressively save to make up the loss in years. I just feel that the experience of overseas teaching both to me and my kids is more important than building up retirement years. I might feel different though in a few years. I hope not.
However they hadn't saved enough (obviously that all depends). They are now still teaching in the US system and nearly 70 years old. They both feel they need to keep teaching a few more years to build up their retirement- and then it will be tight. Looking back they feel they should have bought property and planned for retirement better. Others did and are fine.
If you are going to stay overseas with kids, you need to have a very robust retirement plan. I would also factor in whether or not you can stay overseas if you kids go to college in the States.
We know teachers who have made a career of living overseas and invested well.
As I plan on going back overseas in my mid 40's, I realize I will be giving up retirement years that I'm building right now. I have teacher friends in their 40's that have been teaching for 15 years, and need 15 more to reach 30 years experience. They'll then retire at a percentage of their salary- in their late 50's. Their last few years of teaching they'll be making in the low 90's, so their retirement income will be pretty good. Plus if they own their own home, its even better.
If I go over I'll need to aggressively save to make up the loss in years. I just feel that the experience of overseas teaching both to me and my kids is more important than building up retirement years. I might feel different though in a few years. I hope not.
I hate money-or at least planning for it
It is a very difficult question one that I am also looking for answers too, though my wife and I have committed to finishing my career overseas. We are in a bit of a different position in that we are vested in a pension plan back home but certainly not to the extent that we can afford not to be careful while overseas.
I don't think there is a wrong decision here, as long as you are happy doing what you are doing. I think you can make it teaching overseas as long as you commit yourself to saving for your retirement. It takes more work because the pension plan isn't set up for you but it is doable. I think you would also do well in going home. There seems to be a need for teachers in some regions of the country and once you get on you are set. However, that means planning your relocation carefully and being prepared to tough it out until you are a known quantity. I subbed for a year and a half when I first started out and didn't have many commitments. I don't know if I could do the same today.
What I have realized, and I am a little slow financially, is that my wife and I need to be more proactive in our financial affairs as international teachers. We can't count on anyone to be doing it for us. Hopefully we can carry this through for the next 15 years or so.
Good luck in your decision.
I don't think there is a wrong decision here, as long as you are happy doing what you are doing. I think you can make it teaching overseas as long as you commit yourself to saving for your retirement. It takes more work because the pension plan isn't set up for you but it is doable. I think you would also do well in going home. There seems to be a need for teachers in some regions of the country and once you get on you are set. However, that means planning your relocation carefully and being prepared to tough it out until you are a known quantity. I subbed for a year and a half when I first started out and didn't have many commitments. I don't know if I could do the same today.
What I have realized, and I am a little slow financially, is that my wife and I need to be more proactive in our financial affairs as international teachers. We can't count on anyone to be doing it for us. Hopefully we can carry this through for the next 15 years or so.
Good luck in your decision.
Savings, etc.
Thanks for sharing your thoughts and personal experiences. Yes, this is a tough question. Not having a pension, I am concerned. In my experiences with talking with other teachers, I feel most do not give savings and retirement serious thought and that it is an after-thought.
As mentioned, you have to look out for number #1 and you have to have robust investments/savings. One never knows how much you will actually need. I don't want to let fear for our future retirment dictate what we do - staying overseas or going home to teach. The thread on ISR on the state of international schools (i.e. difficulty hiring) has raised some interesting opinions about whether teaching overseas is all that it is cracked up to be and whether you can have a decent job, lifestyle and, in the end, save good money.
The experiences for our kids has been great and they will never forget the things they have seen and done. As a couple, my wife and I have been able to save about $30,000 a year which I have been told is good. I know I wouldn't be able to do this back home with all the bills we'd be paying there.
A couple of other questions and concerns:
1. Do most teachers (or should) have an off-shore account to save money or invest? Right now, we just wire money home and send a check to the investor or an IRA (which is currently not doing so hot - like everyone else's).
2. I know some teachers have property or houses at home and lease them, etc. while they are overseas. It seems like a lot of trouble, especially when we are unsure of where we will end up of living some day. Is this smart?
Thanks again.
As mentioned, you have to look out for number #1 and you have to have robust investments/savings. One never knows how much you will actually need. I don't want to let fear for our future retirment dictate what we do - staying overseas or going home to teach. The thread on ISR on the state of international schools (i.e. difficulty hiring) has raised some interesting opinions about whether teaching overseas is all that it is cracked up to be and whether you can have a decent job, lifestyle and, in the end, save good money.
The experiences for our kids has been great and they will never forget the things they have seen and done. As a couple, my wife and I have been able to save about $30,000 a year which I have been told is good. I know I wouldn't be able to do this back home with all the bills we'd be paying there.
A couple of other questions and concerns:
1. Do most teachers (or should) have an off-shore account to save money or invest? Right now, we just wire money home and send a check to the investor or an IRA (which is currently not doing so hot - like everyone else's).
2. I know some teachers have property or houses at home and lease them, etc. while they are overseas. It seems like a lot of trouble, especially when we are unsure of where we will end up of living some day. Is this smart?
Thanks again.
Buying a home
We bought a home for investment purposes- and being a long distance land lord was not the best of experiences. We ended up getting burned, but that was us.
While buying property now might seem to be a good idea with the market in the crapper- trying to figure out where you'll be living is hard. Where are your kids going to go to college, how do you know you'll end up liking the place?
We have friends (doesn't everyone..) that bought a managed condo in FL for the purposes of both investment and possibly retirement. The investment isn't working out, the market is falling and they now don't know if they want to live there.
If we had to do it over, I'd invest wisely with the understanding I'd be buying later- but retain the flexibility to purchase where I'd want.
While buying property now might seem to be a good idea with the market in the crapper- trying to figure out where you'll be living is hard. Where are your kids going to go to college, how do you know you'll end up liking the place?
We have friends (doesn't everyone..) that bought a managed condo in FL for the purposes of both investment and possibly retirement. The investment isn't working out, the market is falling and they now don't know if they want to live there.
If we had to do it over, I'd invest wisely with the understanding I'd be buying later- but retain the flexibility to purchase where I'd want.
Hi,
no one can tell you what to do. Everyone has this conversation and then tries to do the math. If you are debt free and have been saving 30k a year you are certainly well on your way and are better off than most americans! Every year SS sends out an update. You probably quality for SS and Medicare at least minimally. I would check on this. How much are you comfortable with?
As for Real Estate, yes, it can be a huge pain in the butt, but there are really good advantages if you are willing to take the risk. It is not for everyone. You need to work with a Real Estate person that understands and has expereince with selling rental property. There are formulas you use (online too) to calculate the return on investment after taxes, expenses, INCLUDING a good property manager. Some properties will more than pay for themselves, others will put you in the hole. Right now may be a good time. Lots of people can't get loans nor do they have the cash for a down payment. You can leverage Real Estate like nothing else
and it will never "disappear" like stock can.
As for other investments, you need to make sure your fees for brokers/managers are as low as possible. Paying someone a few % can really eat into your growth over time.
A great book for this is called "4 pillars of investing" it talks a lot about index funds which are really minimal fee and you can distribute your $ over several sectors and let it ride for the long haul. You don't have to try to time the market etc. Your money trends with the market and over time this seems to be a good thing.
I wouldn't do offshore these days. you need to report these to the IRS anyway and I would be a little nervous about raising red flags when or if i needed to bring the $ into the US again.
Hope this helps.
no one can tell you what to do. Everyone has this conversation and then tries to do the math. If you are debt free and have been saving 30k a year you are certainly well on your way and are better off than most americans! Every year SS sends out an update. You probably quality for SS and Medicare at least minimally. I would check on this. How much are you comfortable with?
As for Real Estate, yes, it can be a huge pain in the butt, but there are really good advantages if you are willing to take the risk. It is not for everyone. You need to work with a Real Estate person that understands and has expereince with selling rental property. There are formulas you use (online too) to calculate the return on investment after taxes, expenses, INCLUDING a good property manager. Some properties will more than pay for themselves, others will put you in the hole. Right now may be a good time. Lots of people can't get loans nor do they have the cash for a down payment. You can leverage Real Estate like nothing else
and it will never "disappear" like stock can.
As for other investments, you need to make sure your fees for brokers/managers are as low as possible. Paying someone a few % can really eat into your growth over time.
A great book for this is called "4 pillars of investing" it talks a lot about index funds which are really minimal fee and you can distribute your $ over several sectors and let it ride for the long haul. You don't have to try to time the market etc. Your money trends with the market and over time this seems to be a good thing.
I wouldn't do offshore these days. you need to report these to the IRS anyway and I would be a little nervous about raising red flags when or if i needed to bring the $ into the US again.
Hope this helps.
IRA contributions
Witness,
I am headed abroad this fall for the first time. I am nearly 30 and have been concerned with many of the same things that your are talking about. Here are my two cents:
1. If you are smart with your money, you should be able to set yourself up nicely for retirement. If you take half of what you have been saving annually and sock it away into a retirement-only type of investment (read: don't touch it) you should be fine. (if at 30 you start with $15,000 and contribute $15,000 a year for 30 years you will have nearly $2 million; you have to adjust that for inflation but you can offset that by raising your contributions over time). As long as you make smart decisions with the other half. Buy property or just stick it into other investments.
2. If you are investing money made abroad into an IRA, you are breaking the law. You should look into it. Either you can hope that they don't find out or you can come forward and deal with it. If they find out, you will get hammered with repayments and rather large penalties. Because IRA are off limits i plan to invest in a simple target retirement fund through Vanguard. It adjusts over time and should save me the hassle of paying taxes as i change my allocations over time. After researching and talking to several friends in the investment industry they felt that was a good option. I will be putting untaxed money into these funds and then only have to pay capital gains on them.
3. How much you can make at home makes a huge difference. I hear people talking about how much they could be making in the states but that isn't true for me. My home state is Idaho and with a Bachelors, certification and 5 years experience i would make $31,000/year. 10 years and a masters only gets me $42,000. However, if you were headed to NY, CT or MA, you would make some serious money and it might make it worth it.
4. Don't know about offshore accounts. They all seem a bit scary to me. I like the protection of the FDIC.
After all this, i realize i can do much better abroad than here. If i come back after 5 years with $150,000 (5 x $30/year) invested in retirement funds and in savings i will be very happy. It would take me 10+ years to save and invest that kind of money.
I would love comments on my plan.
I am headed abroad this fall for the first time. I am nearly 30 and have been concerned with many of the same things that your are talking about. Here are my two cents:
1. If you are smart with your money, you should be able to set yourself up nicely for retirement. If you take half of what you have been saving annually and sock it away into a retirement-only type of investment (read: don't touch it) you should be fine. (if at 30 you start with $15,000 and contribute $15,000 a year for 30 years you will have nearly $2 million; you have to adjust that for inflation but you can offset that by raising your contributions over time). As long as you make smart decisions with the other half. Buy property or just stick it into other investments.
2. If you are investing money made abroad into an IRA, you are breaking the law. You should look into it. Either you can hope that they don't find out or you can come forward and deal with it. If they find out, you will get hammered with repayments and rather large penalties. Because IRA are off limits i plan to invest in a simple target retirement fund through Vanguard. It adjusts over time and should save me the hassle of paying taxes as i change my allocations over time. After researching and talking to several friends in the investment industry they felt that was a good option. I will be putting untaxed money into these funds and then only have to pay capital gains on them.
3. How much you can make at home makes a huge difference. I hear people talking about how much they could be making in the states but that isn't true for me. My home state is Idaho and with a Bachelors, certification and 5 years experience i would make $31,000/year. 10 years and a masters only gets me $42,000. However, if you were headed to NY, CT or MA, you would make some serious money and it might make it worth it.
4. Don't know about offshore accounts. They all seem a bit scary to me. I like the protection of the FDIC.
After all this, i realize i can do much better abroad than here. If i come back after 5 years with $150,000 (5 x $30/year) invested in retirement funds and in savings i will be very happy. It would take me 10+ years to save and invest that kind of money.
I would love comments on my plan.
Stay put
I agree that staying in one school is advantageous. Flipping schools and constantly getting bumped back to step 1 or 2 on the salary scale hurts big time.
If you're married, then that helps a lot. If you can bank one salary that is huge. I regret not staying at a big SE Asian school 10 years back. The savings would have been great.
I also think that teachers who are smart at saving, don't over spend and invest wisely can save substantially. As a teacher in the US, I'm saving little and not coming close to having the experiences I would if I was overseas. Plus I've got kids and I'm focused on providing for them the type of cultural investment that living overseas can bring.
I'm starting a job as a Tech Director in a school district, and once I've got a couple of years admin experience fully intend on hitting UNI or Search to look for a big int'l school in which my family can stay at for a number of years. With my wife teaching I hope to bank as much money as possible. I expect the saving potential overseas to still be greater than in the US, with all the cultural and travel benefits- especially for my kids.
The years I spend overseas will obviously not count towards any future state-side pension plan. However if we concentrate on saving, I think we can put away enough to make it worthwhile. I have many US teacher colleagues that focus on getting their 30 years in to make retirement.
Waiting 30 years to have the type of rich and fulfilling life that oversea teaching can bring seems like a long time to wait.
If you're married, then that helps a lot. If you can bank one salary that is huge. I regret not staying at a big SE Asian school 10 years back. The savings would have been great.
I also think that teachers who are smart at saving, don't over spend and invest wisely can save substantially. As a teacher in the US, I'm saving little and not coming close to having the experiences I would if I was overseas. Plus I've got kids and I'm focused on providing for them the type of cultural investment that living overseas can bring.
I'm starting a job as a Tech Director in a school district, and once I've got a couple of years admin experience fully intend on hitting UNI or Search to look for a big int'l school in which my family can stay at for a number of years. With my wife teaching I hope to bank as much money as possible. I expect the saving potential overseas to still be greater than in the US, with all the cultural and travel benefits- especially for my kids.
The years I spend overseas will obviously not count towards any future state-side pension plan. However if we concentrate on saving, I think we can put away enough to make it worthwhile. I have many US teacher colleagues that focus on getting their 30 years in to make retirement.
Waiting 30 years to have the type of rich and fulfilling life that oversea teaching can bring seems like a long time to wait.
Enjoying the feeback
Wow! I really appreciate all the feedback. I think this topic really needs to be discussed, debated, and shared. I don't see a lot of people out there in the international school world (ISS, superintendents, etc.) helping us out in this department. There are a lot of young teachers teaching overseas and they need advice on this as well. I am always thinking, "If I had only known..." I don't have any major regrets though and I am at a decent school now where my wife and I are able to save good money.
I sometimes wonder if the grass is any greener at other schools, but obviously with ISR you see that each school has its own issues. Very good points about not hopping from one to school to another every two years. When I was young and single and wanted to see the world, I could afford to do that. Now that I have a family, I need to plan better for our future. Plus, we can still travel a lot and save money. We might go recruit next year, but we will be very selective. There are so many schools out there, but the salaries don't look great at many of them. I know salaries and savings potential are very different whether you are overseas or in the U.S., Canada, or...
Danda, in regard to your investments, we are bascially doing the same thing you are doing. I have heard good things about Vanguard and will look into that this summer. We are investing money with the plan to not touch it. We keep some 'emergency' money in a savings account, but I don't see the need to keep a lot there since it collects so little interest. We have a couple of CDs as well. We try to diversify and we are not risk-takers. I read up on investing, etc. but I am not the brightest bulb in this department, so that is why we work with an investor who we trust. He knows our situation and goals and will hopefully lead us to a good retirement and money for a college education for our kids. By the way, anyone doing these 529 savings plans for college education?
Someone said something about finding a school that pays into U.S. Social Security. Are there many out there? I heard that the American School of Dubai does. Anyone know of other international schools that also do this? I have asked people before about whether it would be worth it to pay into S.S. and it sounds like I'd be better off doing what I am doing. I have put enough quarters in S.S. to be eligible to collect, but it looks so miniscule now that it would barely buy me a park bench and a shopping cart. Most teachers I meet seem to downplay S.S. and question whether it "will be around in 20 years." I am not sure if they really believe this.
Danda, the salaries may sound better in the Northeast, but it's all relative. I taught in the northeast and made what I make now (high 30s'K, not including a lot more in tutoring - no taxes) and it still seemed like I lived month to month investing a paltry few hundred dollars at the very most each month. After car payments, insurance, rent, etc. etc. I was left with little. I was single then, of course, but it gives you a sense of what life is like and what we would be returning to.
How many of you have kids or work with families with kids? Our children are very young now, so this also seems to be a good time to be overseas. Not sure if I would want to do this with children in middle school or high school, but it seems like there are a lot of families out there and most of the kids seem pretty well-adjusted. Like some of you have said, these experiences are awesome for families and children. I would like to think that my children will be more open-minded, mature, empathetic, etc. etc. for these experiences. Finally, I wonder if I would be bored going back home also.
Thanks for all of the advice and keep it coming. Savings, retirement, and school quality are important issues that NEED to be discussed. Enjoy your summers. Look forward to reading more.
I sometimes wonder if the grass is any greener at other schools, but obviously with ISR you see that each school has its own issues. Very good points about not hopping from one to school to another every two years. When I was young and single and wanted to see the world, I could afford to do that. Now that I have a family, I need to plan better for our future. Plus, we can still travel a lot and save money. We might go recruit next year, but we will be very selective. There are so many schools out there, but the salaries don't look great at many of them. I know salaries and savings potential are very different whether you are overseas or in the U.S., Canada, or...
Danda, in regard to your investments, we are bascially doing the same thing you are doing. I have heard good things about Vanguard and will look into that this summer. We are investing money with the plan to not touch it. We keep some 'emergency' money in a savings account, but I don't see the need to keep a lot there since it collects so little interest. We have a couple of CDs as well. We try to diversify and we are not risk-takers. I read up on investing, etc. but I am not the brightest bulb in this department, so that is why we work with an investor who we trust. He knows our situation and goals and will hopefully lead us to a good retirement and money for a college education for our kids. By the way, anyone doing these 529 savings plans for college education?
Someone said something about finding a school that pays into U.S. Social Security. Are there many out there? I heard that the American School of Dubai does. Anyone know of other international schools that also do this? I have asked people before about whether it would be worth it to pay into S.S. and it sounds like I'd be better off doing what I am doing. I have put enough quarters in S.S. to be eligible to collect, but it looks so miniscule now that it would barely buy me a park bench and a shopping cart. Most teachers I meet seem to downplay S.S. and question whether it "will be around in 20 years." I am not sure if they really believe this.
Danda, the salaries may sound better in the Northeast, but it's all relative. I taught in the northeast and made what I make now (high 30s'K, not including a lot more in tutoring - no taxes) and it still seemed like I lived month to month investing a paltry few hundred dollars at the very most each month. After car payments, insurance, rent, etc. etc. I was left with little. I was single then, of course, but it gives you a sense of what life is like and what we would be returning to.
How many of you have kids or work with families with kids? Our children are very young now, so this also seems to be a good time to be overseas. Not sure if I would want to do this with children in middle school or high school, but it seems like there are a lot of families out there and most of the kids seem pretty well-adjusted. Like some of you have said, these experiences are awesome for families and children. I would like to think that my children will be more open-minded, mature, empathetic, etc. etc. for these experiences. Finally, I wonder if I would be bored going back home also.
Thanks for all of the advice and keep it coming. Savings, retirement, and school quality are important issues that NEED to be discussed. Enjoy your summers. Look forward to reading more.
Re: Enjoying the feeback
[quote="witness"]How many of you have kids or work with families with kids? Our children are very young now, so this also seems to be a good time to be overseas. Not sure if I would want to do this with children in middle school or high school, but it seems like there are a lot of families out there and most of the kids seem pretty well-adjusted. Like some of you have said, these experiences are awesome for families and children. I would like to think that my children will be more open-minded, mature, empathetic, etc. etc. for these experiences.[/quote]
I went overseas as a child of two teachers when I was in 3rd grade. Now, my children are in 1st & 3rd. I'm planning on hitting the fairs in two years, when they are in 3rd & 6th. I'm not sure if there is a good time to go. I think that if kids are to young, they'll not understand the experiences they're having. On the other hand if they're in high school they might not adapt well. However in teaching at an int'l school, we had kids at all ages do well. I think if they have an open mind, are exposed and educated, they'll do fine.
As far as savings and salary. Right now I'm in the midwest and making in the mid 60's. However I'm also paying $12k+ for health insurance and retirement. So my actual take home is in the low 50's. At that level my family is pretty much living paycheck to paycheck. It's not how much you make, buy how much you can save, and often overseas with the benefits, housing and insurance provided, you can save a considerable amount.
I went overseas as a child of two teachers when I was in 3rd grade. Now, my children are in 1st & 3rd. I'm planning on hitting the fairs in two years, when they are in 3rd & 6th. I'm not sure if there is a good time to go. I think that if kids are to young, they'll not understand the experiences they're having. On the other hand if they're in high school they might not adapt well. However in teaching at an int'l school, we had kids at all ages do well. I think if they have an open mind, are exposed and educated, they'll do fine.
As far as savings and salary. Right now I'm in the midwest and making in the mid 60's. However I'm also paying $12k+ for health insurance and retirement. So my actual take home is in the low 50's. At that level my family is pretty much living paycheck to paycheck. It's not how much you make, buy how much you can save, and often overseas with the benefits, housing and insurance provided, you can save a considerable amount.