Save We Must: Tips for Building Financial Security
TEACHER CONCERNS, PERSPECTIVES
Teachers have some unique needs and perspectives when it comes to investments and retirement planning, experts told Education World. Since most are ensured a pension, they often are cautious about investing money in products that dont guarantee a return, said Dan Candura. Teachers tend to be security-oriented," he said. They have nice pensions -- in Massachusetts, its 80 percent of what they earned the last three years they were working -- so they are lucrative pensions compared with the rest of the world.
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Teachers are not financially-savvy and not investment-oriented. They are savings- oriented. Annuity salespeople would come to schools and walk the halls and they would sign up for annuities."
Teachers often need some convincing to look past traditional retirement income sources, said John Wendland, program manager of investments for the National Education Association (NEA) member benefits. The NEA provides retirement planning resources through its member benefits division.
The key issue we do encounter is that teachers often say they have enough with their pensions and Social Security, but often they do need additional income," Wendland told Education World. Everyones life expectancy is increasing, and as they get older, medical expenses increase."
In Canduras experience, teachers often are wary when it comes to financial matters. They are good at analyzing and evaluating information and are very cost-conscious," he said. Teachers, like engineers, though, can be so skeptical that they get in their own way. They are afraid someone might be trying to sell them some things. If fees are involved, it puts them off."
At the same time, because of the duration of teachers retirements and the make-up of the population, they need more assets. They may have a longer retirement than most, since the teacher population is heavily female and women live longer," Candura noted. While teachers pensions are very good, they should still be saving for retirement because retirement will be very long, and pensions often are not adjusted for inflation."
Marilyn Capelli Dimitroff, a financial planner with Capelli Financial Services in Bloomfield, Michigan, who is chairwoman-elect of the board of directors of the Certified Financial Planner Board of Standards, Inc., said many of her educator clients are researching ways to segue into a second career.
Many of them look to retire at a point where they have time to pursue other interests or careers, like around age 60," said Capelli Dimitroff, herself a former teacher. They want to build into a financial plan some level of continued work after teaching. They look at their skills, their experience from teaching, and look how they can combine those with other interests." And because of their pensions, that does allow them to have a different level of comfort when it comes to retirement."
Although lately, Capelli said, a trend she has noticed is that people are working longer. They say, Oh, Ill work one more year, and then they work another year -- its the idea of making sure they have a good cushion."
Click the links below to read more on this topic.
Different Approaches to Financial Planning
How financial planners work and are compensated depends on their affiliations.
Teachers Ask for Help
Like many Americans, educators are struggling with debt, and the NEA has answered the call for help.
Choosing a Financial Planner, Investment Tips
Suggestions for selecting a financial planner who works best for you and broad advice for saving and investing.
Article by Ellen R. Delisio
Education World®
Copyright © 2008 Education World
02/18/2008