Job Discussion Forums

[veiledsentiments]

[Bindair Dundat]

[Stephen Jones]

The State pension scheme in the US is still better than what you would get privately, both in security and return on investment. Look at the effect of provatization schemes in Chile to see the difference.

Neither you nor Veiled seem to be getting my main point though, which is that if your after tax Saudi income still leaves you to finance your own pension and your US after-tax income does not, then you should deduct the cost of the US pension contributions from your Saudi income before you make the comparision.

And remember to factor in your tax deductions for mortage and other things when you calculate your after tax US income.

Finally it all comes down to individual circumstances. Spending twenty or thirty years in the Gulf probably is financially worthwhile, but there are other costs!

[veiledsentiments]

[Bindair Dundat]

[nowasta]

I have worked as both an EFL teacher and a high school teacher. In my experience the work is easier over here and I certainly have a lot more money in the bank account at the end of the month than I ever did in Canada. However, the state of the US $, inflation in the UAE and the erosion of salaries and benefits is becoming increasingly relevant in my household. If I returned to high-school teaching then my after-tax salary would be the same as what I'm currently earning in about 5 years time as I moved up the pay scale. I would have employee rights, job security and a pension. I don't plan to retire in a third world country and I can't rely on inheriting a lot of money so my family will have no choice but to return to Canada at some point. If I wanted anything close to what I would get as a retired Canadian teacher then I would probably have to save and invest approx. 10,000 Dirhams a month for 20+ years. Wouldn't have much money left afterwards to enjoy that "expat" lifestyle in that case.

[Bindair Dundat]

[ecl]

to enjoy that "expat" lifestyle in that case.[

There it is again. Just what exactly is that [/i]lifestyle? IMHO one should be living as one would back home and saving whatever cash there is so that once back home one can...maintain that expat lifestyle.

[sundevil]

Some very interesting points....

It�s tough comparing the US and Canadian salaries, benefits, taxes, etc. as they are so very different; and then comparing it all to an expat salary package (in the ME or anywhere else).

From a US perspective:

1. I don�t look at my future social security benefits as my retirement package. With the school district I�m in now, I will qualify (at age 60) for 31% of my last salary after putting in ten years. That will come out to something like $1,300 a month; and $2,100 a month if I put in 15 years. It increases as a percentage with each additional year worked. It is paid entirely by the school district. While not much, it is something I expect will be there when I need it.

Social security will add probably $300 a month to the above mentioned sum while I�m alive (and the system doesn�t go broke), but does provide important security/monetary benefits to my spouse upon my death.

The big concern for those of us over forty and anyone in the US, is health insurance. While I do pay over $200 a month now, we all have REAL insurance (something I have not had in a long time). I hope this will be another benefit as well when I retire from the school district. I don�t think my colleagues up in Canada or out in Australia/NZ/UK have this particular concern.


2. Working overseas was a tremendous tax advantage when I was single, but now being married with kids and owning a home, is not as sweet a deal. While I was single my income in the US was taxed at about 30%, but now we are probably in a 10% tax bracket. Thus my $40,000 a year salary overseas seemed great when I was single, but now I can earn that same salary teaching elementary school in the US, with very little coming out in taxes due to the wife and kids.


3. Owning a home has turned out to be the silver (golden?) lining in our return the US. In the last two years we have seen the value of our house rise over $150,000. While I do expect a correction in valuation, it should not be more than 10-15% at most. We have a great home location, and this city is ON FIRE with new construction projects, lots of jobs, and growth. I could rent this out though upon a move back overseas, and thus stay connected to my best investment. Having a real home though has turned out to be something special for us, especially after living (and cleaning up) so many rented/school housing units.


Even when I look up the BEST teaching jobs, I can�t seem to find anything PAYING much more than $40,000 a year. I was/am hoping that maybe a Saudi Aramco gig (which my wife would hate) in their international school, or something at a Japanese university may offer the $50-55,000 a year that I need to make an overseas move profitable again.

Just some food for thought......and barely the tip of the iceberg.

Cheers Everyone

[veiledsentiments]

[sundevil]

It is very, very complicated...

Where I live, I loose my Social Security benefit because we do not pay into Social Security as teachers in this state. Those who never had any other career besides teaching, feel no pain. Those of us who have paid into the system, being something other than teachers before, thus have lost most of our built up Social Security. I should qualify for about $900 a month from social security, not much really, but will only receive one-third of that amount due to what is called the Wind Elimination Provision and Government Pension Offset Provision. In short, in many states one cannot get both a state pension (as teachers due) and a federal pension (Social Security) at the same time. How wonderful, no reason to go overseas and complain about unfair treatment, when you can simply stay at home and get shafted.

There is more than one way I can receive my school district retirement benefit. I can take my full entitlement upon reaching sixty (or sixty-five if I only have five years vested). When I elect to take my full entitlement though, nothing is left to my surviving spouse. If I elect to pass on my benefits, than I will only receive 50% of my entitlement, but it will then transfer (partially) on to my spouse.

My wife, has no Social Security benefits of her own, but is entitled to half of my benefits upon my death. As stated above, due to the WEP-GPO provisions, it seems better to max out on my school district/state pension when I can and maximize a nest egg/security blanket for the family, knowing that she will be able to then collect her full Social Security benefit (as little as it is) as a final layer of financial protection. Yes, Medicare adds to that overall layer of protection.

While I have lost out on Social Security benefits by moving to this state, the housing ride has more than made up for it.......wisdom or folly.........I�m still trying to decide.

[veiledsentiments]

It appears that you have chosen the best of the two lousy pension options and I hope that you will also manage to save enough to add to that minimum.

The problem with appreciation in real estate is that you have to sell it to get that money out... and then you probably can't afford to purchase anything decent to replace it. ... perhaps a double-wide in a prairie state?

VS

[Henry_Cowell]

sundevil,

The "Wind Elimination Provision"??? Please tell us that this is not the punchline of a joke about flatulence. What is it? Is it something devised under the baking Arizona sun?

[sundevil]

Sorry, that was the WINDFALL Elimination Provision and the Government Pension Offset Provision. Some call it double dipping, others an unfair advantage, and some plan robbery.....Google it and tell me what you think. It really makes my former employers in the UAE seem fair, and those in Saudi not half bad.

VS,
I was kinda dreaming of a sailboat in some port in Fiji or Thailand......hope I have the courage to make it happen.

[veiledsentiments]