RSS

Tag Archives: Credit card

The Private-Sector, Jealousy-Misery Media Factor – Part 4/5

It is a fact that misery loves company and when the accountants, carpenters, clerks, plumbers, reporters, salesmen, and secretaries and many other professions in the private sector read the Yellow Journalism in Don Thompson’s Associated Press [AP] piece, Public retirement ages come under greater scrutiny, many of these people in the private sector will say, “It isn’t fair. If we have to work longer and suffer, so do they.”

In fact, that is already happening. Due to pressure from the private sector, this has led to: “Earlier in New Jersey, part of a legislative deal struck between Democrats and Republicans raised the normal retirement age from 62 to 65,” AP’s Thompson wrote.

In addition, “An initiative circulating for California’s 2012 state ballot seeks to increase the minimum retirement age to 65 for public employees and teachers and to 58 for sworn public safety officers.” [California’s teachers may retire at 55 now but those that retire early also will earn about 30% of gross pay and most will have to go without medical coverage.].

I know where the money comes from that funds CalSTRS. Part of it was from the monthly contribution from my paycheck for thirty years and when I retired, the taxpayer money that was used to pay me as a teacher stopped.

Moreover, I was a public school teacher in California for thirty years but I do not qualify for Social Security.  I also retired without medical benefits because I was unwilling to pay $1,400 a month for COBRA insurance until I qualified for Medicare.


The Teacher Pension Blues” tells the story AP’s Don Thompson did not!

On the other hand, when given a choice, many private sector employees do not save toward retirement other than Social Security. Many do not put money into 401k plans or pay into tax deductable IRAs.  Many that own homes take out equity loans to finance vacations, purchase new cars, pay off credit card debts, or to have money to go on spending sprees.

The result is that the average family in America cannot afford to retire as early as many public employees that paid into employer-based defined benefit pensions.

For example, total U.S. consumer debt was $2.43 trillion as of May 2011. Average credit card debt per household with credit card debt: $15,799. Average total debt in 2009 (including credit cards, mortgage, home equity, student loans and more) for U.S. households with credit card debt: $54,000. Source: Credit Card.com

As for me, instead of paying into Social Security while I taught, I paid 8% of my gross monthly pay for thirty years into CalSTRS, and the school district where I taught contributed a matching amount of about 8%.

To force public educators in California to work more years may cost more than it will save.

When I retired, the school district stopped paying me and saved the tax payers money since most teachers that retire after teaching 30 years or more are replaced by younger teachers that are paid much less.

Keeping older, higher paid teachers longer will only cost the taxpayer more in the long run since those same teachers that are working longer will end up with a larger monthly pension check since the longer a teacher spends in the classroom, the larger the pension.  [Note: Part 1 explains how this works.]

In fact, I know three teachers that worked more than 42 years in the classroom and all three retired with a raise, while my annual retirement is about half of what it was the last year I taught.

Continued on December 19, 2011 in Part 5 or return to The Private-Sector, Jealousy-Misery Media Factor – Part 3.

______________

Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

Advertisements
 

Tags: , , , , , , , , , , , , , ,

What, Me Worry about Debt! – I’ve got self-esteem protecting me – Part 3/3

What looming disaster has the self-esteem movement created?

Rachel Dwyer of Ohio State University says, “By age 28, those students may be realizing that they overestimated how much money they were going to earn in their jobs. When they took out the loans, they may have thought they would pay off their debts easily, and it is turning out that it is not as easy as they had hoped.”

According to The Smart Student Guide to Financial Aid, these debts range from $10,000 to more than $100,000.  In fact, a total of more than $1.7 trillion in federal education loans have been made since beginning of the loan programs.


Link to the entire program of Your Life, Your Money

In addition, the estimated total private student loans outstanding as of June 30, 2009 were approximately 157.8 billion.  The overall total education loans outstanding, federal and private, was about $763.4 billion in 2009.

When I wrote this post, the Student Loan Debt Clock said that number now stood at more than $900 billion dollars.

If we go back to the beginning of this series of posts, you will recall that many of these young adults also carry credit cards beyond the student loans and undergraduates are carrying record-high credit card balances. Source: Credit Cards.com

The average (mean) balance grew to $3,173, the highest in the years the study has been conducted. Twenty-one percent of undergraduates had balances of between $3,000 and $7,000, also up from the last study.

In addition, close to one-fifth of seniors carried balances greater than $7,000, while the average college graduate has nearly $20,000 in credit card debt. (Source: Sallie Mae, “How Undergraduate Students Use Credit Cards,” April 2009)

The results of this study has revealed that the movement to boost vanity among our children for the last five decades has created a debt crises that many young adults may struggle for decades to pay off while sacrificing a better lifestyle than their parents may have experienced.

Even more disturbing is a piece by Lori Gottlieb in the Atlantic, How to Land Your Kid in Therapy, which deals with why the obsession with our children’s (self-esteem) happiness may be dooming them with unhappy adulthoods. I will write summary of this long article in another post (Gottlieb’s Atlantic piece ran 12 pages printed).

Return to What, Me Worry about Debt! – Part 2 or return to Part 1

______________

Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “Crazy Normal”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

 
 

Tags: , , , , , , , , , , ,