As a career international teacher, I have had to learn the hard way about international school finances and savings. As an established teaching nomad, I have made the conscious choice of forgoing my national teachers’ pension and accepting the reality that when retirement comes, I will be fully responsible.
Having worked in 4 schools, on 4 different continents, I have learned that work contracts never tell you enough about the real cost of living. Many international teachers find it hard to save money, as the cost of an expat-lifestyle can be more costly than our home country.
It is possible to save ANYWHERE, but it does require a plan and some helpful hints from teachers that have worked in the international teaching circuit for a number of years.
Helpful Hint #1: Save 70% of your Salary (Anywhere)!!!!
In every country, I have always saved at least 70% of my salary.
For countries around the Indian subcontinent of South Asia, that is very easy because of an exceptionally low cost of living. I managed to save 97% of my salary simply by eating locally, avoiding restaurants that never agreed with my gastrointestinal tract, and only succumbing to the $9 bag of Doritos on super special occasions.
While working in China, the online food applications were a lifesaver, as the food was at your door faster than you could walk to the grocery store. A little help from locals with a basic understanding of Chinese was needed, but after the learning curve was mastered, the savings were exponential.
Many of my colleagues would shop exclusively at the expat grocery store and spend more on one meal than I would for an entire week. The high cost of expat food is justified in the name of organic, natural, GMO-free food, that was grown with the same soil and water as everything else. Yes, you can buy the $5 green pepper if it makes you feel better and safer, but that security is mostly an illusion. In China, you can easily spend half your salary on food and daily living. Starbucks can be delivered to your school, but the local apps are just as good and less than half the price.
Anywhere you live, saving 70% of your salary is not only possible but easy to achieve.
Stay tuned next month for Part 2 on Save $$$ ANYWHERE!
This article was submitted by an ISC member and veteran international school teacher. If you are interested in being a guest author on our blog, please contact us here.
My name is Sorcha Coyle and I’ve been teaching in the Gulf (Qatar and Dubai) for the last 8 years. I have always taught local students and I love the unique cultural insight that this has given me. Outside work, I love travelling (not at the moment, of course! #flattenthecurve) and the sunny expat lifestyle! In my time abroad, I have been fortunate enough to save six figures, which I have used to purchase 2 properties (a 4-bedroomed house in my home country and a 3-bed apartment in Spain), start a profitable investment portfolio, complete my Masters, set up a side business, and travel the world. Today I will talk about my “why” and how it pushes me to save more and more each year. Then I will share my “how” with you, so you can boost your savings too!
9 years ago, when I lived in the UK, I was working at a lovely school but because of my long hours and low pay, I was incredibly stressed and overwhelmed. I was spending well over 50% of my salary on rent (in a shared apartment) and after council tax and bills; I was barely breaking even each month. Meanwhile back in my home country of Ireland, we were facing our worst economic crash. In 2008, the construction industry collapsed. Businesses went bankrupt. Property values plummeted. Almost overnight, hundreds of thousands of citizens lost their jobs. Honest hardworking people couldn’t repay their mortgages. Many lost their homes. From that moment on, I swore to myself that I would be financially empowered. I wanted to have peace of mind no matter the state of the economy. Soon I realised that I had to take a drastic step to fulfill this goal, so after much research, I moved to the Gulf region in 2011. As an expat there, I have job security, a great salary, zero rent, and zero tax- what is not to love about it?
It is true that the expat life has so many wonderful aspects- the high salary, the job security, the sun, and the standard of living. However, it has one downside- it is unpredictable. We might plan to teach here forever with its tax-free salary and perks, but life here can change in the blink of an eye. We might lose our job (sadly more common since COVID reared its ugly head), do something silly and get deported, or we may have to go home for family reasons. Whatever the reason, we want to have something to show for all our hard work.
Moreover, many of us are no longer paying into our private teaching pension at home, which means we must have alternative methods to fund a comfortable retirement that will allow us to lead the kind of life we have now. Speaking of pensions, right now we have longer to work before retirement (until 68 instead of 65) to qualify for the state pension. Unfortunately, by the time we get closer to retirement, the state pension age may even have been pushed up to 74 years.
From the day I began teaching abroad, I realised the incredible saving potential that this situation gave me and made a decision there and then to maximise it to its fullest.
Regardless of where we work, us single teachers have a great opportunity to save tonnes and set ourselves up for life, financially.
How much you save all depends on 2 factors:
1) How much you want and plan to save
2) Your desire to do extra to save as much as you can
Let me go into more detail…
1) How much you want and plan to save
Saving does not happen by chance; you must absolutely plan for it. You need to set a financial goal, make a budget, and then work hard to stick to it to achieve it. I highly recommend setting SMART financial goals. This means that your goals are:
From Day 1 in Qatar, I told myself I’d save €100,000 before I turned 30. I don’t even know where I plucked that number from- it just seemed like a nice round number! By having this SMART financial goal, I was focused and knew that I had to save a certain amount each month. It also continuously motivated me as I would have a competition with myself and try to beat my previous month’s savings! I was 25 when I moved to Doha and I managed to smash that goal when I left 4 years later at the grand old age of 29. However, I didn’t reach my savings goal just from sticking to a budget and saving as much of my teaching salary as possible. I knew that if I wanted to accelerate my ability to save, I would have to increase my (streams of) income! Read more below….
2) Your desire to do extra to save as much as you can
In addition to saving as much of my teaching salary as possible, I do a few more things too…
All those actions above have helped me reach my target of saving six figures in 8 years, so these small “sacrifices” are 100% worth it! What can you do this year to boost your savings?
As well as teaching full-time, I am also the founder of Empowering Expat Teachers and my mission is to empower future and current expat teachers to lead personally, professionally, and financially rewarding lives! Follow me on Facebook, IG, and my blog for lots of helpful tips and advice to help you become an empowered expat teacher too! I have recently set up the Financially Empowered Expat IG that focuses exclusively on saving more, earning more, and retiring with more and you can find me @thefinanciallyempoweredexpat on IG!continue reading
It’s never to early to think about your retirement plan. As many of you know, we have a wealth of information on the International School Community website. There are now over 17500 reviews and comments submitted on over 900+ international school across the globe. We’re certain to reach 20000 by the end of this year! A number of schools have reached the 100 comments milestone (with a few even going over 200 comments!). Check out this blog article regarding the most-commented schools on our website from July 2016.
A number of our members are curious about their future, especially if their future is to become a “seasoned international school teacher“. Part of our future is planning for retirement. Many of us have unfortunately stopped contributing to the retirement plans we were paying into before we moved abroad.
In turn, we now are hoping that international schools will help us do the saving. But not all international schools are a great help in this area; the truth is that some have non-existent retirement plan options for their teachers.
There are a few though that are leading the way in terms of helping you save something for when retire. Using our unique Comment Search feature (premium membership access only), we found 203 comments that have the keyword “retirement”. After scouring through these comments, we would like to share nine of them that highlight some schools that appear to have some excellent retirement benefits.
1. Seoul Foreign School (Seoul, South Korea)
“SFS is a treasure amongst international schools. It is not spoken of as much as other “top” Asian international schools–this is what keeps it special. This school has allowed me to grow professionally and in my faith, has set me up with a hefty retirement for my future and plush savings for the present. The amount of on site training, college certificates, and international conferences I have been allotted to participate in haa been fully funded by the school. The package retains teachers and the demand of hard work keeps the professional teachers here for the long haul. It is a living, learning, and growing community with lots of busyness and potential to never become stagnate.”
2. American School Foundation of Monterrey (Monterrey, Mexico)
“There are 2 things:
1. Mexico has a “social security” plan and you pay into that so you pay in for your years, leave, and you can come back when you are 65 to collect.
2. The school has a 13% matching program that you can collect 1 or 2 times a year based on your choosing. This is the retirement plan but it is up to you to do move the money somewhere.”
3. International School of Kuala Lumpur (Kuala Lumpur, Malaysia)
“We get paid monthly but receive July’s salary in June also. Salary is paid in RM with up to 40% at a fixed USD rate. Tax is around 21-23 % depending on salary. Average for 8 yrs experience (max entry point) and an advanced degree would be appx 5000 USD after tax and deductions (this includes travel and housing allowance) Additionally 11% is previously deducted for retirement fund with an extra 17% added by the employer. On same criteria this would be 1500 USD per month into a retirement plan.”
4. American School in Japan (Tokyo, Japan)
“The school provides a retirement plan and contributes 5.27% of base salary in each of the first two years, 11.57% in year three, and increasing each year up to a maximum of 16.82%. The school does not participate in US or Japanese social security. The retirement age at ASIJ is 65 years old.”
5. Escola Americana do Campinas (Campinas, Brazil)
“Retirement plan is 8% school contribution a month. School pays 8% of salary to local savings plan for employee.”
6. United Nations International School (Vietnam) (Hanoi, Vietnam)
“In lieu of a school-established retirement plan, the school currently reserves an annual salary supplement of fifteen percent (15%) of the annual base salary and disburses the total amount of this annual salary supplement to the expatriate professional staff member upon termination of employment with UNIS. Alternatively, this supplement may be paid to the employee on an annual basis.”
7. Hong Kong Academy (Hong Kong)
“With a reasonable mix of some travel and eating out it is possible for a single teacher to comfortably save anywhere from 8,000-12,000 US$ per year not including the 10% +10% of base salary matching retirement plan.”
8. American School of the Hague (The Hague, The Netherlands)
“The school offers a retirement plan which is open to all employees on a voluntary basis. ASH offers two different plans: Nationale Nederlanden (pre-tax) and ECIS. ASH contributes 8% of the pensionable salary to the plan. Participation in the ECIS scheme on a pre-tax basis is only possible if one has vested and contributed regularly at another school before coming to the Netherlands. The teacher may make additional pre-tax pension contributions based on his/her age, ranging between 0.2% and 26% of the pensionable salary for employees. The pensionable salary is the gross annual salary minus about â‚¬ 12,500 (on a full-time basis).”
9. Seoul International School (Seoul, South Korea)
“I have 14 years experience and my Masters. I earn about $1,500 per month in Won (about $400 of that is taken out of my paycheck for a retirement plan which is matched by school which I have access to at the end of the school year), and then another $2,000 in US dollars which is sent to my US account every month. I pay no taxes. The school takes care of it. I am paid 12 times a year although we get the summer pay all at once, in May.”
Of course there are many more schools that have attractive retirement plans for their teachers, but the nine schools we’ve highlighted here sure do seem nice! It all depends on what stage you are at in your career and how old you are, regarding how attractive a retirement plan would be to you. But we suppose that any retirement plan option is better then none at all!
Please share what you know about the retirement plans of the international schools you’ve worked at. Login to our website today and submit some comments here!continue reading
Many international school teachers don’t think enough about retirement. And that’s understandable. The whole concept can seem confusing. Andrew Hallam, however, says it isn’t. He says that those who fail to plan are planning to fail. That could mean eating dog food instead of gourmet, during your golden years.
So, what are the top 10 tips for international school teachers to build a solid retirement?
If you can’t save at least this amount, and you’re not just “experiencing” international teaching for a year or two, then go home or find another school. Otherwise, you might be eating dog food when you retire.
At private international schools abroad, you won’t be contributing to Social Security (for Americans) or its foreign equivalents. Nor are you contributing to a defined benefit pension plan, offering guaranteed income for life. Don’t glibly suggest that Social Security or your home country equivalent won’t be around when you retire. In one form or another, it will.
No, you don’t need to work at a top-tier school to save these amounts. Meet Andreas Clesle. He saves $20,000 a year teaching in Myanmar.
#2 – Work at a school that doesn’t FORCE YOU to invest in an offshore pension. How can you tell? Ask this one question: Can I pull my money out, at any time, without penalty? If the answer is no, find another school. These are usually expensive, inflexible products. They cost so much in hidden fees, that the only person they make rich is the joker who’s selling the product. Unfortunately, many international school administrators haven’t caught on to the racket. When their recruitment pools start drying up, perhaps they’ll start asking why.
#3 – Pay off your student loans, car loans and credit card debts before investing. Then, invest at the beginning of every month. Those that invest while carrying credit card debt are categorically insane. They’re paying interest of 18 percent per year (or more) and expecting to make 9 percent per year in the stock market. Enough said.
#4 – Buy low-cost index funds. Avoid buying actively managed funds. Active funds are pricey.
The Alexander Beard Group is a favorite among financially illiterate administrators. The firm sells actively managed funds. But Jeri Hurd, at the Western Academy of Beijing, is one of the smart teachers who refused to invest. Including the company’s platform costs and actively managed fees, investors pay more than 3 percent per year. So if global stocks make 6 percent, investors will be giving away 50 percent of their profits to the firm. If global stocks average 3 percent in a given year, investors will give 100 percent of their profits to the firm. If you think bonuses, paid by your school, can offset this leakage, think again.
#5 – Don’t let anyone convince you to trade currencies. Trading currencies is not investing. It’s speculating. The only person who makes money, long-term, will be the broker or the bank. And they’ll be making their money from you—not for you. Here, I describe a woman at my former school. Her bank decided to trade currencies on her behalf. It’s a very foolish move indeed.
#6 – Diversify your assets. This means buying a variety of low-cost funds (preferably indexes) allowing exposure to a multitude of different markets: your home country stock market, international stocks, and a bond market product for added stability.
#7 – Don’t base investment decisions on economic outlooks or predictions. Most of them prove to be wrong. The average person listens to forecasts. Often, it’s their broker’s. But consider this. U.S. stocks averaged more than 9 percent per year from 1994-2014. According to Dalbar, the average investor in U.S. stocks made about 5 percent a year during the same time period. Why? The biggest culprit is behavior. They listened to their gut, and to investment speculators. Remember what Warren Buffett says: “Stock market forecasters exist to make fortune tellers look good.”
#8 – Share your annual savings goal with your friends. Studies show that if you want to succeed, write down your goals and track your progress. If you don’t want to save enough for retirement, keep it all to yourself and ignore your expenses.
#9 – Write down what you spend each month. By writing down your spending, you’ll simply spend less.
#10 – Remember that you aren’t on a holiday. You’re working overseas. And your future is in your hands.
This top 10 list was submitted to us by a guest author Andrew Hallam. He is the author of The Global Expatriate’s Guide To Investing. He’s a columnist for AssetBuilder and for The Globe and Mail. He’s also the author of the international bestseller, Millionaire Teacher. He taught at Singapore American School from 2003-2014.
Check out the pension plan details of 100s of international schools on our website. Currently, we have 336 comments that have been submitted on the comment topic “Pension plan details” on our school profile pages. Here are just a few of them:
“There are 2 things: 1. Mexico has a “social security” plan and you pay into that so you pay in for your years, leave, and you can come back when you are 65 to collect. 2. The school has a 13% matching program that you can collect 1 or 2 times a year based on your choosing. This is the retirement plan but it is up to you to do move the money somewhere.” – American School Foundation of Monterrey (Monterrey, Mexico) – 34 Comments
“For certain nationalities, the required contributions for staff member and school into the Employee Provident fund are locked in until the age of 60 so people leave without this money and no hope for ever retrieving it.” – Kodaikanal International School (Kodaikanal, India) – 53 Comments
“The school provides no pension, but 9% is deducted from the monthly paycheck to pay into IPS, which is sort of like Social Security. If a teacher retires in Paraguay, he or she will receive money through IPS. So for the most part, saving for retirement is in the hands of the foreign hires; they must have the discipline to do it themselves.” – American School of Asuncion (Asuncion, Paraguay) – 58 Commentscontinue reading