Do Ontario Teachers Earn More Lifetime Income Than Most Ontario Engineers? A Mom Who Crunched The Numbers Explains
Last July, we hosted our annual neighbourhood BBQ at our place outside Guelph. My three-year-old had just spilled a blue raspberry popsicle all over the picnic bench, and we were crowded around the fire pit swatting mosquitoes, when the conversation turned to money and pensions. My brother Mike, a civil engineer who graduated the same year as my best friend Sarah, a high school English teacher, wiped sweat off his neck and leaned in. “I swear, everyone says Ontario teachers end up making more total lifetime money than guys like me, when you add salary, pension, and all the perks. Is that actually true?” Sarah, who’d just finished chasing my toddler around the oak tree, stopped and laughed. “I have no idea. I just know my take-home pay is way less than yours when we compare pay stubs.”
Since I’m the person who messes around with spreadsheets when I can’t sleep, and I’ve got a 16-year-old starting to pick university programs, I offered to crunch the numbers for both of them over the following week. What I found surprised even me, and it’s changed how I talk to my son about career choices.
First, the starting numbers don’t lie. When both graduated in 2013, Sarah started at a permanent full-time position with the local school board at $52,000 a year. Mike started at a mid-sized construction firm in Toronto at $68,000. That gap held steady for the first decade: this year, Sarah’s base salary is $94,000, while Mike’s is $109,000. But that’s just the base pay, before you add in all the benefits and pension contributions that shift the whole equation.
Once you account for total compensation (the full amount an employer pays to have you on staff, not just what hits your bank account), the gap shrinks to almost nothing. The Ontario public school system contributes 14% of Sarah’s salary annually to her defined benefit pension, on top of the 11% she contributes herself. Mike’s employer only contributes 4% of his salary to his defined contribution retirement plan, that’s the full match. Add in that Sarah pays nothing for her family health, dental, and vision benefits, while Mike pays $180 a month in premiums for his family plan, and Sarah’s total annual compensation this year comes out to $117,000, while Mike’s is $119,000. That’s barely a $2000 difference after 10 years, when most people think the gap is tens of thousands.
The real gap opens up when you look at lifetime income including retirement, which is what the question is actually asking. After 30 years of full-time work, Sarah can retire at 58 with a guaranteed pension that pays out 70% of her top salary every year for the rest of her life, indexed to inflation. That works out to around $66,000 a year, every year, no matter what the stock market does, and it goes up when prices rise so she never loses buying power.
For Mike, if he keeps saving at his current rate, he’ll have roughly $1.2 million in his retirement accounts when he retires at 65. Financial advisors generally say you can withdraw 4% a year to avoid running out of money, which works out to $48,000 a year, with no guaranteed inflation adjustment. If he lives past 85, there’s a good chance he’ll outlive his savings. Add in that Sarah will get 12 more years of pension income than Mike because she retires earlier, and the total lifetime value of her retirement package ends up hundreds of thousands of dollars higher than Mike’s projected retirement savings.
There are other smaller financial benefits that add up too. Sarah hasn’t faced any risk of layoff in 10 years, while Mike has been laid off twice, once leaving him without pay for three and a half months during a 2018 construction slowdown. She gets 20 paid sick days a year that accumulate, and she currently has 120 days banked if she faces a long-term illness. Mike gets 5 sick days a year with no accumulation. She has 10 weeks of paid time off annually; even if half of that is spent prepping for the next term or going to professional development, that’s 5 weeks of extra time she can spend with her kids or do side work, something Mike can’t do with his 3 weeks of vacation a year.
For parents like me who are helping our kids sort through career choices, this changes things. A lot of parents I know push their kids toward engineering automatically because “teachers don’t make enough to support a family.” That’s a myth, at least here in Ontario, if you’re talking about average full-time teachers and average full-time engineers. There are two concrete things I now do when my son talks about career options: first, I make him look up total compensation, not just starting base salary. Ask for the full breakdown that includes employer pension contributions and benefit costs, don’t just go by what hits your first pay stub. Second, calculate the projected annual retirement income for both paths, don’t just compare the size of a retirement savings pot. A guaranteed pension that pays out for life is worth far more than most people realize.
It’s not all cut and dry, of course. If your kid lands a top engineering job at a big tech firm in Waterloo or a senior role at a large construction company, they’ll make far more over a lifetime than any teacher. This only applies to most engineers, who work at mid-sized firms in average roles, which is the majority. It also only applies to permanent full-time teachers; supply and contract teachers don’t get the same pension and benefits, and they do earn far less on average.
Last week, Mike and Sarah met for coffee to go over the numbers I pulled together. Mike still likes his job, he likes building new roads and housing subdivisions, and says he wouldn’t switch even if the numbers are closer than he thought. He has started putting an extra $200 a month into his RRSP to close the retirement gap, though. Sarah says she’s still tired of people calling her overpaid when she spends three hours a night marking essays after her own kids go to bed, but she knows how lucky she is to have the security she does. My son still hasn’t decided what he wants to study, but I’m not going to push him away from teaching just because of the old salary myths I used to believe. There’s a lot more to lifetime earnings than the first number on your first pay stub.
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