Typical Teachers Can Save Half Million in 12 Years?

Typical Teachers Can Save Half Million in 12 Years?
November 1, 1997

George A. Clowes

George Clowes is a Heartland senior fellow addressing education policy. He served as founding... (read full bio)



American Express Financial Advisors wanted a print advertising campaign showing how they could help those with modest incomes save for a comfortable retirement. But their decision to feature a hypothetical couple consisting of two public school teachers inadvertently reveals the high salaries teachers now receive for just nine months of work each year.

Teachers Steve and Evelyn Davis are the creation of a public relations firm promoting the American Express Financial Advisors service. The magazine ad recounts how the teachers weren’t sure how to save the money they needed for retirement. After talking over investment options with a financial advisor from American Express, the couple embarked on a “twelve-year journey” to their goal of retiring with a half-million dollars.

“Retiring with a half million?” asks the ad. “Not bad for a teacher. Not bad, period.”

Joseph L. Bast, president of The Heartland Institute, believes the ad is correct, but thinks it misses a crucial point. “A married couple consisting of two teachers earns, on average, about $90,000 a year for a nine-month work year. The value of employment benefits, such as free health care and taxpayer-paid pension contributions, boosts total compensation to over $112,000. Such a household is in the top 5 percent of all income earners.”

After taxes and deductions, Steve and Evelyn would have to invest some $21,250 every year for twelve years to build a $499,858 nest egg. According to the U.S. Census Bureau, the average household in 1996 earned an annual income of just $35,492.

“American Express knows that the average reader thinks teachers are poorly paid,” says Bast. “But their own ad exposes the truth: teachers are paid much better than the average taxpayer who pays their salaries.”


George A. Clowes is managing editor of School Reform News. His email address is clowes@heartland.org.

George A. Clowes

George Clowes is a Heartland senior fellow addressing education policy. He served as founding... (read full bio)