THE month of May is recognised as Child Month and teachers are also acknowledged on Teachers’ Day, which was celebrated this year on May 8.

Every year teachers are lauded for their contribution to nation-building. However, many of these professionals are challenged by low salaries and working environment, forcing some to seek greener pastures overseas. But how are teachers planning and preparing for retirement from a stressful environment after years of hard work? There are still concerns expressed by some retired teachers about delays in receiving their pensions. This situation can prove damaging to their health and finances as some retired teachers grapple with paying loans and mortgages in retirement. Another concern for some retired teachers is the inadequacy of their pension to meet their needs.

The characteristics and qualities of a good teacher naturally make them good candidates for saving and investing for the future. Some of the important qualities include patience, preparation, adaptability, listening, enthusiasm, management, discipline, and lifelong learning. Teachers are usually goal-oriented. These traits put teachers in an excellent position to plan and save for retirement and their financial freedom. Since many teachers will spend years in the classroom they need to apply these qualities to achieve their personal financial goals. It’s never about how much you earn but what you save and invest over many years. Time and compound interest will never fail in delivering results for investors who demonstrate the capacity to be persistent and patient.

The ‘National Study of Millionaires’, which was released by the US-based Ramsey Solutions in 2023, showed that the top five careers for millionaires in America included teachers. The teaching profession ranked third in creating millionaires. Engineers ranked in the number one position, followed by accountants, then teachers, management, and lawyers. Of the leading careers of millionaires in America, the teacher’s salary ranked the lowest. The study involved the participation of 10,000 millionaires in the USA.

A startling revelation from the survey showed that only 15 per cent of the millionaires interviewed held high-level leadership positions. Of note, 93 per cent of the millionaires obtained their wealth through hard work and wise financial decisions. Frugal spending, good money habits, and debt management contributed to wealth creation.

Their millionaire status was not the result of relying only on substantial salaries earned. The survey found that 75 per cent of the millionaires based their success on investing long-term. Another interesting finding revealed that eight out of every 10 of the millionaires interviewed are from middle- and low-income families.

Eight out of every 10 millionaires surveyed invested in a 401K plan, which is an employer-sponsored retirement plan. Employers’ contributions are not mandatory, but employees must make regular contributions which are paid directly from the employees’ salaries. Funds are invested tax-free, and the survey underscored the importance of having employees contribute to a pension plan. I am an advocate for automatic pension enrolment in Jamaica. Pension funds are also long-term investments and the tax-advantaged status is key to accumulating a significant nest egg for retirement. In Jamaica, teachers who are in the private sector should ensure that they contribute to a pension plan. In fact, all teachers should seek to have a diversified portfolio of assets consisting of a pension, stocks (including pooled funds), bonds, and real estate. Life insurance is important for family protection. Only the cash value of insurance policies is considered a financial asset.

According to financial strategist Dave Ramsey of Ramsey Solutions, “Income is your most powerful wealth-building tool”. But he said low income does not equate to “financial ruin”. Additionally, he explained that teachers in their careers tend to be systematic and obedient to rules and are required to follow guidelines. Similarly, he opined that wealth accumulation relies on “methodical spending and steady investment over time”. This explains why teachers who apply the same discipline and attributes displayed on the job to their finances can reap financial success in the long term.

A retired teacher in Canada expressed regret that she sacrificed her health while seeing to the needs of her students and found herself unhappy in retirement. The advice she would give to her younger self is “be equally dedicated to your students as to your own needs”. Teachers should take note that high income can give a false sense of security and without budgeting and with increased spending, high-income earners can become broke. Dave Ramsey attributes personal finance to 80 per cent behaviour and 20 per cent knowledge. Based on my experience I do agree with this Dave Ramsey quote, “Money is not just Math. It’s behaviour”.

Grace G McLean is a financial advisor and retirement specialist at BPM Financial Limited. Contact her at: gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com