Episode 77 – The school champion for better retirement planning
What if one conversation could change your financial future? In this episode, we talk with Anthony, a Yakima School District leader whose passion for retirement education stems from his family history and years in labor advocacy. He shares how his path from delivery driver to union rep to HR leader shapes his mission to help school employees understand their benefits, start meaningful conversations about saving, and navigate the unique challenges of planning for retirement.
Episode transcript:
[music intro]
Jenny
Welcome back to Fund Your Future with DDS. Today we’re talking with Anthony, who works as the Assistant Superintendent of Operations over at the Yakima School District.
And we found out recently that Anthony has quite a passion for talking about retirement and helping employees, especially new employees, with the onboarding process and getting the ball rolling with them to help them start thinking about that retirement conversation early on. So, Anthony, we’re really excited to have you here.
Anthony
Thank you very much. It’s a pleasure to be here.
Seth
So, Anthony could you just tell us a little bit about your background and how you came to your current role with the school district?
Anthony
Sure. I’m probably the most unlikely person to ever be in this role. I started off in transportation. I was a loader and then a truck driver for many years. I became, president of our local union. Spent the last 17.5 years of that career in office, helping members and working to our retirement system was one of the things that really interested me.
I’m a third-generation teamster, so both of my grandfathers were in the retirement system and being able to see how much better their lives were because they had a retirement compared to some family members who did not really kind of set the stage. And then I was, fortunate enough to have a father who was also a rep and learning more about the system as I grew up. So, it just naturally became a passion.
Jenny
Tell us a little bit more about that, how you kind of went from being a truck driver to working in education.
Anthony
Well, the locals that I worked for both had public employees. One was local 174, and Teamster 763. I was the representative for the Highline School District classified employees. And while working with that school district and Trevor Green, who was in HR, he went on to become the superintendent of this school district. I was going to retire.
We then we’re talking about what was going on in his transition over at Yakima. He had a lot of labor issues and was asking advice. And then one day just said, “I really wish you wouldn’t retire. And possibly apply for a job over here and help me with labor relations.” So, I am our chief negotiator, as law as well as transportation and maintenance operations. Custodial services. So, yeah, I kind of absolutely accidentally fell into this job.
Jenny
That’s awesome. You said that had a huge impact with your grandparents getting a pension and how that affected your family and how do you think that kind of affected you as a kid? Like, were you diligently trying to save every penny? And, you know, do you remember a moment where you, started kind of seeing your savings grow and having those ‘ah-ha moments’ around money?
Anthony
No, I did not save money. So, all four of my grandparents were Mexican immigrants. All four of them had quit school at a very early age to go to work full-time. And I always grew up thinking we were poor. I think my father’s favorite sentence was, we can’t afford that. And so as I moved out of the house and, and got a good job, I, had the attitude that I deserved to reward myself.
And I spent every dime I had on dumb things that depreciate. One day, my daughter, who was five years old at the time, asked me why we didn’t have nice things. I realized it was because I was trying to look at the short-term pleasure that, you know, going on vacation could bring me, but those weren’t long term investments.
When I went back to college, I figured out I wasn’t going to get a degree, but I was going to learn how to be a better father, how to handle my finances, and to provide better. And so at that moment, the best thing for me was to go back to the transportation industry. I had learned about compounding interest and about retirement.
I knew that we belonged to a wonderful system, and in our system, everybody had to contribute the same amount because it was a collective bargaining agreement. And so, once I got that bug of realizing I had a lot of money in an account, that I had to wait till I was 65 to get to, it made a lot of sense to teach other employees, make this a top priority in our negotiations, and just build upon it.
Seth
One of the things I loved, Anthony, when we talked earlier about how much you engage with people right when they start as an employee, but you also, you know, as an employer in the bargaining process, really want to make sure people understand how valuable their retirement benefits are and how important that is. So, could you just tell us a little bit about how those conversations go, how you introduce people to their teachers’ retirement plan or their school employees’ retirement plan, and help them understand the value of their pension?
Anthony
Sure. It begins with the running joke that when you see Anthony coming, he’s going to ask: “are you Plan 2 or Plan 3?” And yeah, I do. I ask, you know, what plan they’re in. I ask if they are aware of what their retirement benefit looks like. The majority say no, they don’t know. I ask if they’ve ever looked into their Social Security benefit. They again tell me no.
So, then I finalize the questioning or the interrogation with: “do you know how much money you’re going to need to retire?” And again, they tell me, no. So I say, “well, why don’t we get together, make an appointment.” And we will go out to DRS [website]. We will look at your account, there’s a wonderful estimate tool.
You can then look to see what you think your benefit will be around retirement. We can sign up for your Social Security web page. And now we have two of the three legs in your retirement stool. At that point in time, you have a pretty good idea of what the dollar value would look like, and you kind of figure out where you want to be.
It doesn’t seem like such an impossible gap to get to, once you look at the other two components. Then, I start talking to them about alternative savings plans like deferred compensation or the 457. As a public employee, they have access to a 403 B, but we’re not supposed to give them advice or steer them in any direction.
But I think that the rules around a 457 are a little less penalizing. I just share the difference between the two plans, and I let them know that they can do payroll deduction. I let them know that in September when they get a new contract, they’re going to get an increase in their and their wages, and that it would be great for them to carve out a little bit of that wage right before they even get it in their paycheck. And then this way, if you do that every year, year after year, you’re incrementally adding to your savings. You don’t ever feel the loss, and you can watch it grow.
And what really ends up happening is I have employees that come back a couple of years later and say, “oh my gosh, you know, I have this much money already and I talked to my wife or my husband and I got together and we made a decision that we’re going to we’re not going to put half of the raise, we’re going to put this much in!”
They really get excited about how much it’s growing and what a difference it’s going to make, not only in their long-term future, but that can be left to their children and create generational wealth.
In Yakima, where about 90% of our population are Latinos and many of them are first generation Americans. I suspect they don’t have these financial conversations at home either. So, I start the conversation.
Jenny
Yeah. That’s awesome. Which is why it’s so great that you are starting the conversation. It sounds like when there are new employees, you sit down and tell them, you know, in September when the contract renews, go ahead and increase your DCP. Do you guys ever send out reminders to people to say, hey, it’s September, you’re going to get an increase. You know, this is a great time to increase your DCP.
Anthony
You know, in all truthfulness, I haven’t. When we do orientation, I do try to introduce this subject. Orientation is very overwhelming. So, I just give the introduction to retirement at that point in time. I let them know that we’re part of a great system, that have it, on either TRS, 2 or 3, whatever their choice is, it’s an individual choice.
And then, quite frankly, I do, have this reputation where people just either call or they pick up the phone. This year at opening day, there was, a woman who walked up to me and she said, “somebody told me you were Anthony. I’m supposed to get together with you to talk about my retirement.”
And then the conversation just grew to you know, 2 or 3 more people jumping in and saying, “hey, can I make an appointment? Can I make an appointment?” And then I always end the meeting with, “if you like this process and if you if you felt like it was it was a value, go back and tell a friend.”
You know, spread the word because it’s going to mean more coming from one of their coworkers and one of their friends that this was a good, positive experience than me going out there. In the past, I would be told I sounded like a salesman. You know, what was in it for me? Was I going to get a commission?
And I’m like, “no, man, I’m just trying to teach you how to be financially independent in your old age.” You know, when you’re young, you could always work overtime. You could always get a second job. And I have four children. It was tight. When my kids were growing up. But when you’re old, tired. What do you do then? It’s better to prepare.
And then being in a school district that I picked up, there’s a child’s book called The Ant and The Grasshopper. Grasshopper played all summer long. While the ant stored all his food away. And, you know, I just kind of joke. The all know what I’m talking about. I’m like, look, some people are ants, some people are grasshoppers. It’s silly, but it gets the point across.
Jenny
I love that I’ve heard that story before, and I never kind of thought about that in terms of saving for retirement. But it totally works.
Seth
I so appreciate, Anthony, what you’re saying too about peers being able to support peers. If the teacher down the hall is telling you, “hey, think about putting a little bit extra in for your retirement,” or “I wish I would have started saving earlier.” It has such a much bigger impact than a random stranger, a person from DRS or maybe even a person from the district office.
So I’m curious if there’s anything that you’ve seen that folks who work in schools maybe have more of a challenge with, or if there’s anything that’s unique, for them, that it’d be helpful for people to think about to increase their savings or to be planning more for their future retirement.
Anthony
Sure. About two thirds to three quarters of our employees only work nine months a year. And so, an hourly wage, that might look like a good living wage. And you’re only working nine months, and then that’s divided up over 12 months, sometimes can be challenging, and you’re on a tight budget. So, everybody wants more money in their pocket today, and it’s very difficult to get started.
Yeah, that’s really the hardest part. So having the access to a 457, I explain to the employee that nobody can guarantee you that you’re going to get a great return. But what we can guarantee is that any money you put into this is going to lower your taxable income. And so, the tax break is a huge benefit. And what you could find out is you get more actual savings by utilizing, deferred compensation than you would if you just try to put it in the bank.
The other thing is, once it’s there, you’re going to have to wait until you leave this career before you can collect. I do try to remind them that once you put the money in, you’re not going to have access to it.
So the only guarantee is the tax break today. But when they withdraw their money, they’re only going to be taxed on the federal income. They’re not being taxed on, say, L&I or on long term health care or you’re not paying Social Security benefits on that. So all of your money actually goes a bit farther, than when you’re working.
So, again, getting to that point to where you have three funds to look at, and then there’s strategies to look at. As I read the IRS tax code, the 457 was put in place to bridge the gap between early retirement and the time they would get to their full retirement. Some people want to supplement their income by taking a small amount every month, and they want that to last the rest of their life.
Some people can utilize that amount of money to get from where they retire at an early age, not take the early withdrawal penalty, wait to take their full benefit, or even say with your Social Security, wait until you can get your maximum benefit. There is no right plan. It’s all personal choice, but yeah, if you don’t look at this ahead of time and if you don’t try to play with the numbers, you won’t know what your choices are.
Jenny
With the DCP contribution. Obviously, they can contribute to their plan by percentage or by a dollar amount. Do you try to recommend one over the other, or do you prefer one over the other?
Anthony
So, I really try not to recommend anything. It just doesn’t come across right when you’re like, well, you should do this. But yes. So recently I met with, a new employee. This is the son of a current employee. So his dad sent him over to me. He said, okay, you know, I’m 19 years old. I’m living with mom and dad.
And I said, all right, I have a spreadsheet for the Roth [IRA]. You’re going to pay the money after taxes. So it’s not the same as DCP. Even though it is, part of a 457 Roth. If you put in $100 and you do that each year until you hit the maximum amount, which I believe is $583, if you’re doing it on a monthly basis, you come in just a hair under the $7,000, maximum contribution that’s law today. And if you did this every year until you retired. And again, we have to make some assumptions. I currently use the 7% assumption, which I know might be high. But I also go to my personal, DRS page and look at my deferred comp.
We’ll print it out and black out what the numbers are, but I will show them what the fund produced in the three, five and ten year aggregate. And quite frankly, almost all of your accounts beat 7% on the 10-year average, and have continue to do that. So I tell them, look, if they want to manage their money, make their choices, have a little bit of money at all 20 different plans you have, or you can put them all in one, or do nothing and let the state manage it.
Every employee of mine who’s come in and said, “oh yeah, I did this once and I never looked at it again. It’s probably nothing.” They’re shocked how well the fund did. And then, I also play with the numbers and say, “look, let’s just assume a horrible year,” and I go randomly to a cell and take a 20% reduction. And then let’s just play that out for the rest of your career and, you know, you’d be surprised how quickly that can be absorbed.
I tell them no guarantees in life. You know, tomorrow the whole world could come to an end. The reality of it is, you’re doing this because you’re planning for your future and stay the course.
Even my wife, my wife was a city employee during March of 2020, when the market took a huge dip. I told her just raise your hands in the air, pretend like you’re on a roller coaster and say, “wee!” You know, we’re going for a ride, baby. And at the end of the year, you know, it had been a pretty good year.
Seth
So, Anthony, we’ll wrap up with this. But in an earlier conversation, you mentioned to us that you’re actually approaching retirement yourself. So, is there anything that you’re looking forward to in retirement, and is there anything you wish you would have done differently in preparing for your own retirement?
Anthony
Absolutely. My wife and I love to camp. So, we’re looking forward to visiting all over Washington and Oregon. I mean, this is just, beautiful part of the country. We kayak, hike, bicycle ride. So. Yeah. What we’re looking forward to doing all of those things.
I’m actually very structured, believe it or not. I made a spreadsheet for my whole year of activities. And, you know, when, you know, when you break out the snowshoes and, you know, maybe the summer activities.
On the question, I wish I would have started earlier. I wasted eight strong years of earning potential. Sometimes I look back and I think, well, I wish I would, I would have been more aware, but you know, the youth is wasted on the young.
The thing I’m happy about is I really start paying attention somewhere around the age of 27. And so, by starting that late, I still was able to develop a good strong nest egg. And I think it doesn’t matter how young you are or how old you are, it’s never too late to start.
Jenny
That’s great. Well, yeah, even starting at 27. I mean, you were saying starting later, but that’s still pretty early for most people. I would say, like, if you can start before you, you’re 30. I feel like that’s a good benchmark. But yeah, people always go, I wish I would have started earlier.
Anthony
Oh yeah. Have you ever run to compounding interest sheets side by side? Start one when you’re 20, start one when you’re 30. In dollar value. And what a huge difference.
So yeah, you know, and I’m fortunate that I had grandparents, who set a good example and a father who was able to teach me, because of the industry, my dad worked in, I was able to have access to the chairman of the, Western Conference of Teachers Pension Trust. One day when I went to work with my dad, you know, he just took me aside and started talking to me, and I was really excited about this stuff. So, it set a good solid seed.
And then, you know, and with, my accounting professor, that was another seed. And then having a father who was constantly driving into my head to pay attention too, I was young, I thought, “yeah, that’s for old people, you know, I’ll pay attention to that later.”
But once I understood the value of compounding interest, it really kicked in that it’s never too early to start. And you can start with smaller figures when you’re young. So, you know, get started early because it’s not as painful.
Jenny
Well, it sounds like you had a good foundation, but are there any other like books or podcasts or websites that you like for financial know-how?
Anthony
I really like Susan Orman, because I think she speaks, very down to earth, and she really focuses on, like, get out of debt, you know, don’t be paying a credit card with 18-25% interest.
One of the people that I was working with had a lot of credit card debt. So collectively we thought, let’s get out of debt first. But the person just was kind of addicted to spending. And so, the strategy wasn’t working so great. So, what if at some point in time when we reconnected and they came back and said, well, you know, I’m trying, I reduced my debt, but I’m not out of debt yet. So, this person decided I’ll start with $100 contributions and didn’t think that that would really be that much.
But again, we had a couple of really good years back-to-back. And they saw how quickly it was growing and that was enough to incentivize them to really focus on paying down their credit card debt so they could put their credit card payment into their DCP. They had already developed a lifestyle where they were used to paying $400 a month towards credit cards, and it was for stuff that they had already bought. So get out of debt. Yeah. And, you know, refocus that attention on retirement. It worked.
And, you know, like I said, everybody’s different. There is no right way. There is really no wrong way. I try not to be judgmental because the reality of it is nobody wants to come and talk to me and then say, “oh, look, I made poor choices,” you know?
That’s how I felt when my kid asked me why we didn’t have nice things, you know, but that kid’s 41 now. And, you know, we’re in a whole different and a whole different position today. It’s nice.
Jenny
Nice. Yeah, well, thank you so much. This is very inspiring. And I think I wish that every school had someone like you there to kind of help guide these new employees in. And I mean, for that matter, every child should have a dad like you that can kind of tell them, here’s the facts and here’s how you save for retirement.
Anthony
Maybe another little story that that is my daughter, that same daughter she graduated college, she started working. I begged her to bring me home her 401(k) information and let’s get started. And she wouldn’t. She had the same attitude. It must be in our genes. She’s like, “yeah, that’s for old people, you know, I’ll deal with that in the future.”
But one day she needed some help and I said, I’m not going to help you until you bring me all your 401(k) information. And she got really angry, and I said, “you’re the one who needs help. You want you want it. It’s going to cost you two hours of time.” So, we sat down with her pamphlets, and then I put the information into the compounding interest sheet.
She only worked there for a few years. Her entire lifetime’s worth of contributions was $19,000. She is now 41. She called me up because the 401(k) company said, “you have to roll this money over somewhere. You haven’t been contributing for many years.” And so, she had $95,000. That $19,000 investment just left alone and let it grow.
So, I told my daughter, okay, let’s roll this into an IRA. And then if you start making contributions and if it continues to grow at a very modest rate, I think we use 5% as the number. She could easily be at a quarter of $1 million with no contributions. If she started, with contributions again, we figured out – she would very easily be somewhere between $450 and half a million dollars at age 62. So, she’s actively putting money away again.
Seth
I appreciate it so much, and I’m glad you took the time. I also want to just echo what Jenny said. That DRS is lucky when we have so many wonderful employer partners across the state in administering the retirement plans and, having folks like you who are actively helping people think about their future makes such a huge difference. And it makes it makes our jobs much easier as well. So, thanks for taking the time and joining us on the podcast.
Anthony
Yeah. Thank you, I appreciate it. I told you before Seth, this is really one of the highlights of my life. I work with problems and I work with issues, you know, but when people come in and they start talking about this, they’re so happy and it’s positive. So, thanks for giving me a boost there.
Seth
No problem.
Jenny
Yeah.
Seth
All right. Thanks, Anthony.
Anthony
Thank you, thank you Jenny. Appreciate it.
Jenny
Yeah. Thank you.
Anthony
All right. Bye bye.
[music outro]
Disclaimer
Thanks for listening. And now we’d love to hear from you. What topics would you like to hear about? What questions do you have for us? Send an email to drs.podcasts@drs.wa.gov that’s drs.podcasts@drs.wa.gov. The Department of Retirement Systems provides this podcast as a public service, but it’s neither a legal interpretation nor a statement of DRS policy.
References to any specific product or entity do not constitute an endorsement or recommendation. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. Views and opinions expressed by DRS employees are those of the employees and do not necessarily reflect the view of DRS or any of its officials.
