Quote:
Originally Posted by Sliver
Here are some rough numbers on my understanding of pensions. Will you please correct me if I'm wrong?
I've understood you will receive 70% (or is it 80%) of the average of your last five years in your job. Principals make around $125K in Calgary (I think, although maybe it's more like $140k). That means when you retire after 30 years (assume you started teaching at 23, so at 53 you work your last day), you would make $87,500 per year (adjusted for inflation, too) from 53 to around 90 (assuming that's when you die). That's a value of $3.2 million in today's dollars. On top of that, it's also my understanding that you will have full medical and dental benefits during that time, which also has a high monetary value. Finally, this pension is bulletproof since it's backed by the taxpayers. If it's underfunded, the taxpayers will top it off.
That, to me, sounds like a guaranteed stress-free retirement. You will never have to worry about money. Never have to worry about medical or dental care. Never have to watch the stock market. Never have to meet with your financial advisor and discuss going back to work. It's amazing. Am I wrong on any of that?
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Lots wrong here. 70% pay is the maximum, but that's only achievable if you put in 35+ years of pensionable service or wait age 65 to retire. If you retire early or don't have enough years of service (often the case with people who sub for years or women who've gone on maternity leave during their career) you see a reduction in that number. And extended medical and dental coverage certainly isn't free. You're looking at another $400 or so a month for that once you hit 65.
And it's not like that's free money. Teachers have 13-14% of their gross salary deducted to fund the pension every year.