The maximum monthly benefit workers can receive depends on the age at which they retire. In 2013, for workers retiring at the full retirement age of 66 years old in the Social Security system, their maximum allowable monthly benefit is $2,346.
This is based on the optimistic idea that a worker, after just turning 21 years old, could earn the maximum taxable amount every single year for the next 45 years. The maximum taxable earnings in 2012 was over $110K. That leaves both of my kids out of the running.
Stark Comparison
In January 2013, the average monthly Social Security benefit for a retired worker was $1,261, or $15,000 annually. In comparison, the average monthly CalSTRS (California State Teachers Retirement System) benefit was $3,300, or almost $40,000 annually.
Much More …
The average retired educator receives almost $12,000 more than the highest possible pay out allowed under Social Security – and over $25,000 more than the average retired worker in the same system.
… For Less Time Invested
One must remember that to receive a sizeable CalSTRS benefit, the career educator need only work three-fourths of the calendar year for 25 to 30 years, a span of time much less than the 45 years called for by Social Security.
Under-funded Retirement
Compared with government benefits, the more generous benefits being paid by CalSTRS to each of its almost 235,000 retirees – including the 6,600 teachers and school leaders receiving $100,000-plus payouts – are just one of the many underlying causes for its massive, multi-billion dollar, unfunded liability.
Closer Than You Think
Even our own Culver City Unified School District has five such six-figured ex-employee/retirees. Collectively, they receive almost $45K a month in benefits, $537,000 annually, with more on the way.
They Should Know
According to the California Retired Teachers Assn. and CalSTRS, the average teacher has 28 years of service when retiring around the age of 60. Such a person receives 60 to 65 percent of his or her salary in benefits.
According to CalSTRS, the average California teacher retiring last year will receive benefits equal to 60 percent of his or her salary. Almost 30 percent of its beneficiaries are receiving monthly benefits of $4,000 or more.
Fighting For State Funding
It is accepted that education is one of the foundations on which our next generation will build its future. Unfortunately for them, our state Legislature has yet to take state pension reform seriously. By claiming to have fixed the problem after only applying a band-aid, the Legislature has forced our next generation to compete for the little state funding available, especially given the increasing CalSTRS payments due to the new wave of boomer-aged retirees.
Mr. Laase may be contacted at GMLaase@aol.com
