I’ve mentioned the books I’ve written (and am continuing to write) a few times on here, but I realized I haven’t really shared why I’m writing them or what got me started. I talked about it a little on the Teach and Retire Rich podcast, but I haven’t put it all together in one place. So I’m going to share a bit of the backstory of what led me to think of this idea, why I see the need for this series, and then a bit about what’s coming up in the series.
Ironically, this post is going to be TL, but hopefully it won’t be DR.
Sometime in the early to mid 2000s I became “the guy” in my school that some folks came to when they had financial questions. It started because I spent a couple of years on the negotiating team for benefits. Each year the school district negotiates with employee groups about benefits for the next year, with most of the time spent on managing the increase in health insurance costs. (This was alongside salary and general contract negotiations, but was a separate committee.) I would ask questions of my colleagues to see what their issues and concerns were and to get feedback on how benefits were working for them.
It quickly became clear that most of the people I worked with really didn’t know that much about the benefits that were being offered to them or why they might want to take a little time to understand them to make sure they were making the best choices for their circumstances. So I began occasionally offering an after school session titled “LPS Benefits 101” for any staff in my building who were interested in learning more. First I simply talked about what all the benefits were, because many people weren’t even aware of what was offered (many folks simply signed up for the same health, dental and vision insurance each year as they did the previous year). But then I also talked a bit about why you might consider making certain choices over others, and also talked about the 401k, 403b, and 457 plans that were available to them (technically not part of district benefits, as the district doesn’t contribute anything, but still very much related.)
I found that there was a lot of misunderstanding about benefits and, surprisingly, I also discovered that many of my colleagues really didn’t know much about their pension plan. Most folks knew they had a “good” pension, and they knew that a lot of folks said that getting to “30 years” was a good idea, but they were pretty fuzzy on the details. This despite the fact that at the time, our Superintendent was actually serving on the pension’s Board of Trustees. So I began to add in to my presentation information about the pension plan as well (including that there was nothing magic about “30 years”). And, a few years later, when my Superintendent decided not to run for the Board again, I ended up running and serving three years on the Board of Trustees myself (I would’ve served longer, but I ended up retiring, and the seat I held was for active members.) That, combined with the presentations I had been doing, really sealed my fate as “the guy” to go to with questions.
Even after I retired some folks continued to reach out with questions and I realized there was still a need, which led to the creation of this website and my offering of financial education to fellow educators. Now, to be clear, I’m not a financial advisor, but I try to help educate them on topics ranging from their district benefits, their pension benefits, fees in their 401k/403b/457 plan, why index funds might make sense for them, and similar topics. Many of them didn’t want to use a real financial advisor, either because it was too expensive or because they were intimidated that they didn’t know enough and might get taken advantage of. And, unfortunately, many of my colleagues who did have a financial “advisor” really had a sales person from a high-cost 403b vendor.
In my last years as a teacher I also realized that the high school students I was working with also didn’t have much financial knowledge. Thankfully our district was implementing a graduation requirement for a financial literacy course, which I fully supported, but I felt like the content of the course was less than ideal (this is not a knock on the teachers of the course who were working their tails off to make it better). For example, it included a version of the ubiquitous “stock market game” which does more harm than good, and generally felt like it was written by the financial services industry (from their perspective, not necessarily a fiduciary respective).
Since I had a little bit of time on my hands, I decided to try to write a very short book that might communicate the basics of financial literacy to teenagers and young adults. I didn’t want to write a comprehensive financial literacy book, because I felt like they weren’t ready for that and likely wouldn’t read it because it would be too long (and perhaps intimidating). After I distilled down what I thought was the most important “starter” ideas that young folks needed to know, it turned out that I had about a 35 page “book” that was more like a series of blog posts. As I tried to decide what to call it, I settled on the TL;DR abbreviation as really summing up what I was going for: trying to reach an audience that desperately needed the information yet was likely to ignore anything that was too long and complicated. My hope was that it would be just enough information to get them started on the right foot, but also would give them the interest and the confidence to learn more. So I included a link to a website I created with further resources that hopefully would encourage them to explore further.
Since I was retired, I also had more time to further my own financial knowledge. My initial interest started when I was lucky enough to work part-time in a credit union in high school and college. Over the years I read some financial books and magazines and then, of course, the financial internet exploded about the same time I was getting involved with benefits and the pension plan. Now that I was retired, I had much more time to dive into the resources on the internet (as well as read more financial books) and particularly the burgeoning FIRE movement (Financial Independence Retire Early).
While all this information was fantastic, I also began to realize that something was missing. Almost without exception, the books and podcasts and websites discussing financial topics ignored defined benefit pensions. At best, they might say, “And if you have a pension, then you might do things a bit differently.” At worst, they didn’t even mention pensions. Now, there’s a good reason for this, which is that not that many folks have defined benefit pensions anymore. Certainly they are few and far between in the private sector, and even in the public sector there are not as many defined benefit plans as before (as some pension plans have switched to defined contribution or hybrid plans). The people writing these books, recording these podcasts, and blogging about financial topics were trying to meet the needs of their audience and so naturally didn’t talk much about pensions. (And, realistically, many of these folks’ intended audience tended to be higher income individuals. While teachers make a decent living, we often don’t fall into that demographic.)
This seemed like a problem. Because teachers should often be thinking about all these financial topics being discussed in at least a slightly, and often a significantly, different way, and throughout their teaching career, not just when they near retirement. Many of these financial books, websites and podcasts focus primarily on the private sector, with a lot of talk about 401ks, social security, and negotiating your salary (as just a few examples). Yet each of these topics look very, very different for teachers, and the decisions they make are often going to be different (or at least should be). Let’s take a (very brief) look.
- Teachers generally don’t have 401ks (ironically, we do in Colorado), they have 403bs (and sometimes 457s), and they rarely get any employer match. And, unfortunately, the majority of 403bs are awful. When these writers, podcasters, and bloggers even acknowledged public employees, they often just substitute 403bs for 401ks without realizing the very different fee structure and investment offerings, and they assume an employer match. The investment decision making process for educators often looks very different than the “traditional” decision making tree in the private sector.
- Teachers in roughly 15 states don’t pay into Social Security at all. And even when they do, the defined benefit they get from their pension plan should make a significant difference in their financial decisions throughout their career. Most of these financial folks discuss decision making in the context of 401ks and then eventually receiving Social Security. But most teachers retire well before Social Security’s Full Retirement Age, and they usually begin drawing a significant defined benefit much earlier than age 67. This should often dramatically alter financial decisions along the way, yet most of these resources don’t talk about it.
- While teachers who have collective bargaining have someone negotiating their salary each year, they can’t simply go to their boss and ask for 20% more or they’ll start looking for another job. Plus, most teachers are on a salary schedule, so their future income is much more predictable than most of the financial resources talk about (as well as their job security), which should also affect their decision making.
So while I felt good as I continued to help educate my former colleagues, I also felt like it was really hit-and-miss. Only folks who knew me, or friends of those colleagues, reached out to me, and only those who felt comfortable enough talking to me about financial stuff. And while there was a wealth of resources freely available on the internet (and at the public library), I knew that many of my educator friends didn’t have the time (or wouldn’t make the time) to explore them and, even if they did, those resources were ignoring the pension and other factors somewhat unique to teachers. I was trying to figure out a way to make a bigger impact when the pandemic hit.
Now not only did I have a lot of time on my hands, but my former colleagues had even more than the usual high level of stress that goes along with teaching, and those that were getting close to retirement were trying to figure out if they could go earlier. I began to wonder if I could expand on the information in my “book” for teenagers and young adults; to add on and try to synthesize the most important information about both school district benefits and their pension plan in a way that could possibly reach more people (and perhaps some folks who were hesitant to talk about their finances with me, but would be willing to anonymously read a book). A book that would address some of the shortcomings of the other available financial resources that too often ignored teacher’s pension plans. The result was this book for employees of Colorado public schools. Still in a TL;DR style as, much like the book for teenagers and young adults, I felt that a long and comprehensive book wouldn’t be read by the audience I was trying to reach.
I really didn’t have any expectations for the book, I figured a few folks would come across it and it would hopefully help them, but I knew it wasn’t destined to be a bestseller or anything. A few folks read it and the feedback was good, and then the head of the union at my former school district (who also happens to be a former student and colleague of mine) reached out and said they were going to raffle off 100 copies of it to members. Wow, that was about ten times more copies than had been sold, and more than I figured would ever be sold.
That seemed to go over well, so then the union also decided to purchase it for all the new teachers to the district the following year (another 70 or so), which I thought was a great idea. Not just because of the (small) royalties I get, but because it makes a lot of sense for new teachers. While not all of them are very young, many of them are and all of them are new to the district, so they will be deciding on benefits and perhaps might be new to our state’s pension plan. And, more than just helping those teachers financially, I really feel like it has the potential to make them even better teachers than they already are. If we can remove some of the outside stress from teacher’s lives (in this case, financial stress), then it seems likely that could help them be even better in the classroom. I’m hopeful the union in my former district will be able to continue doing that for new teachers each year. (And, shameless plug, if you are in another Colorado school district and are a union rep, a principal, a superintendent, or a school board member, perhaps you should consider purchasing copies for all of your new teachers each year.)
Then when I was on the Teach and Retire Rich Podcast, Dan and Scott suggested I write similar books for other state’s pension plans. I had actually briefly considered this, but then rejected the idea because I was worried that I wouldn’t know enough about the other state’s pension plans, and school districts, and state tax laws as I did Colorado’s, and that I might miss something important. Dan and Scott then suggested that I could simply try to find some co-authors from those states to help with that part, to be the “local expert” to make sure I didn’t get something really wrong. So I put it out there, got some volunteers, and have now written books for nine other pension plans (so far):
- Illinois (TRS)
- Iowa (IPERS)
- Maine (MainePERS)
- Nebraska (NPERS)
- Ohio (STRS)
- Pennsylvania (PSERS)
- Virginia (VRS)
- Washington (TRS)
- Wyoming (WRS)
We also have books coming later this year (so far) for:
- Alaska (TRS)
- Arizona (ASRS)
- Indiana (INPRS)
- Massachusetts (MTRS)
- Minnesota (TRA)
- Missouri (PSRS/PEERS)
- New Jersey (TPAF/PERS)
- New York City (TRSNYC)
- New York State (NYSTRS)
- Oregon (PERS)
Now, I want to be clear, the purpose of all this is not for me and my coauthors to make money. We make about $3 per sale (total) in royalties and this year that might add up to a bit over $500 for me and maybe another $500 total for all my coauthors. (Obviously, as more books come out this will go up some and, if they actually catch on, could end up being more significant amounts.) This is a passion project for us. Our goal is to help fellow educators become more financially literate, less stressed, and hopefully improve their financial lives in such a way that it improves their overall lives.
So, if you know someone in one of the above pension plans, please consider pointing them to the appropriate book. If you are an educator in a state/pension plan that is not represented above and would like to be a coauthor, please complete this google form. And, as always, if you have constructive feedback (about the books or this blog), please reach out.
Fisch Financial 