Mike Johnson, CFP® Teacher Wealth

About Mike Johnson, CFP®

Hello, I’m Mike. I founded Teacher Wealth to raise the standard of financial advice to educators. As a former teacher, I understand the challenges that educators face with their finances; as well as the unique opportunities. Unfortunately, in many ways, the financial services community has ignored the profession.

I am trying to change that. Teachers deserve better!

Many families just need someone to walk with them as they make important decisions. To really get to know them. To ask them the right questions. To challenge them. To offer them accountability. I am honored to be this person for my clients.

At Teacher Wealth clients get holistic, life-centered financial planning advice. We like to say that “it’s not just about the money.” Instead, the focus is on how the money can best create clarity, security, and fulfillment in our lives.

Professionally, I’m a board member of the Financial Planning Association of Iowa and the Iowa Jump$tart Coalition.

On the personal side, I’ve been married to my best friend Tisa for over 15 years. We live in chaos most of the time in our Des Moines, Iowa home as we raise our four awesome kids. We do our best to prioritize our marriage over everything else except our faith. We are active members of Holy Trinity Catholic Church in Des Moines.

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Recently Published

Inflation and IPERS

February 16, 2022

Inflation is in the news these days.  You are probably feeling it when you buy groceries or do other shopping.

As a financial planner for educators in Iowa, my mind automatically goes to IPERS when I hear the word inflation.  For IPERS is a wonderful retirement benefit, more so than most teachers truly realize, but it does have the “inflation problem.”

Because IPERS does not have a cost of living adjustment (like Social Security does), inflation is the number one enemy to an IPERS benefit after checks start to arrive.  Whatever dollar amount your first payment is, that will be your payment going forward each and every month.  It won’t go up.  It won’t go down.  

The dollar amount won’t go down.  But, as prices increase, what that monthly check will actually buy will definitely decrease.  You will likely lose purchasing power each and every year.

Check out this table comparing the long-term historical rate of inflation (3%) to what the economy is experiencing today (around 7%) and its purchasing power impact on an IPERS benefit of $3,500/month.  This would be how much you can actually buy in today’s dollars.

I in no way think that prices will continue to rise at the 7% clip that we are currently experiencing; not even close to it.  But, you can see the risk of having your entire retirement built around IPERS, even at the historical rate of inflation.  

It speaks to the importance of saving additional dollars in outside retirement accounts like Roth IRAs or 403(b)s.  Those are the accounts that a retiree will rely on to fill in this “inflation gap” caused by prices rising over time.  You need additional savings just to stay even with your standard of living.

So if you haven’t started saving in other types of accounts, now is as good a time as ever.  Prepare now, and this won’t have major negative impact down the road.

If you are currently working and paying into IPERS, this current higher inflation episode doesn’t have a major effect on your long-term retirement situation as long as your wages keep up with those prices, other than the impact inflation has on the overall economy.  It is really when you retire and start IPERS benefits when this is a major issue.  

So it is your former teaching colleagues who have started their monthly benefit in the past who are paying the heavy price these days.  They, unfortunately, can’t really do much about it if they didn’t save during their working years.  Alternatively, you still can prepare for those future inflation years in your own retirement. Something to consider.

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5 Important Things To Know About the FAFSA and Financial Aid

October 1, 2021

Dealing with financial aid and completing the FAFSA brings out lots of anxiety for parents. Here are 5 things to know about the FAFSA.

The FAFSA is used to determine your Expected Family Contribution (EFC).

Your EFC is basically what the government “thinks” you can afford to contribute to your child’s education.  Once this number is determined it is compared to a college’s cost of attendance and the result is the need-based aid a student is eligible to receive.  (Notice I said, eligible to receive, not does receive. There are still other factors that are involved before coming up with the actual net cost a student will end up paying.)

Below are a few examples. Notice your EFC is the same no matter what college you go to.

College A

$20,000 - Cost of Attendance

$12,000 - EFC

$  8,000 - Financial Need Eligibility

College B

$10,000 - Cost of Attendance

$12,000 - EFC

$         0 - Financial Need Eligibility

College C

$85,000 - Cost of Attendance

$12,000 - EFC

$73,000 - Financial Need Eligibility

For planning purposes, it is important to estimate your EFC well before your student completes the FAFSA in their senior year of high school.  For sure if you have a freshman or older in high school you will want to get an estimate, but it isn’t a bad idea to get a rough estimate before that.

Many parents are shocked at this number when they first see it.  

There are actually three different methodologies to arrive at the EFC.  Most colleges use the federal methodology, but there are two others that some private and elite institutions will use.  Many times these three numbers are similar but can widely vary depending on a family’s situation.

If you want to get a good estimate of your three EFC numbers click HERE to get a free college money report.

Even if you think you “make too much money” you should complete the FAFSA

The FAFSA is not just used to determine if you will receive federal government grants.  Colleges, universities, as well as states, use the data to determine need-based and merit-based aid given by institutions. 

Additionally, Stafford loans which every student is entitled to receive from the federal government are awarded via completing the FAFSA.  These are generally the best type of student loans out there.  So neglecting to complete the FAFSA is not wise.

Complete the FAFSA as soon as possible

The FAFSA is eligible to complete and submit on October 1st of each year starting the senior year of high school.  This process will be repeated each year the student is attending college.  

The federal deadline is June 30th.  Each state also have their own deadline.  But most importantly, each school has a priority deadline that you will want to know and abide by.  Some schools as early as October 30th.

Some financial aid is given in a first-come-first-served manner based on limited funds.  If the money runs dry, you will be out of luck.  

To be safe, complete the FAFSA as soon as possible on or after October 1st.

This all seems like a complicated and scary process but just follow these steps and it’s not that bad.

Step 1: Create a Federal Student Aid (FSA) account.  Both the student and one parent will need one.

Step 2: Gather the items needed to complete the FAFSA.

Step 3: Start the application and answer questions carefully.  It is important to know if you get stuck you can save your work and return later with the information you are missing.

Step 4: Save and submit.

Step 5: Receive the Student Aid Report (SAR) and review it for accuracy.  This document will state your federal EFC.

Step 6: Reach out to the financial aid office at any colleges of interest and see if there are additional steps or requirements needed to apply for financial aid at the school.

Step 7: Follow their additional requirements (if applicable).

Step 8: Receive award letters from interested schools.  Read carefully, these are not uniform letters and unfortunately and can be confusing sometimes because each school presents the information their own way..

Step 9: Decide on a school.

There are changes coming to the FAFSA

Due to recent legislation, some changes are being made to the FAFSA rules and process.  These changes will come in stages and some think provision will still be adjusted, but here are some examples of changes to be expected as of the writing of this post.

Fewer Questions 

The total number of questions will decrease from over 100 to less than 40.  I will reserve judgement on whether or not it will make it easier to complete.  Theoretically, that is the case.

EFC will be named the Student Aid Index (SAI)

Based solely on the name, some end up thinking their Expected Family Contribution is the amount that they will end up ultimately paying for college, which is not accurate.  Instead it is an indicator of financial need they are eligible to receive.  Hopefully changing the name will be less confusing.  

It will also be possible for some families to have a negative SAI.  This should help more families who are in most need of financial assistance.

Expands the eligibility of the Pell Grant

A different eligibility formula should increase the amount of students eligible for this grant, which doesn’t have to be paid back.

Multiple child benefit is going away

This is one change that I hope will be dropped before it becomes law, especially as a parent of four children.

Currently, a student who has a sibling in college at the same time will see their EFC cut in half.  So, if a college freshman has an EFC of $20,000 in year one, once their sibling who is a year younger starts the next fall, they would each would have a $10,000 EFC in year two.  

With the new law, this adjustment wouldn’t be made, so each student would have an EFC of $20,000 or a total of $40,000 for the family (instead of $20,000).  This would negatively affect many families.

Grandparent giving not penalized

Currently, dollars grandparents (or others) helping out with college can hurt the student’s chance of getting financial aid the following year.  This will no longer be the case.

There is a lot more to know and understand but hopefully, these basics make it a bit clearer to you.

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What is Fee-Only Financial Planning?

September 22, 2021

Financial advisors can get paid in various ways.  In any financial advice relationship, it is important that you to know how you are paying the advisor and how much.  That might seem like common sense, but you would be surprised how many have no idea.  Some even mistakenly think they are getting advice for free!

There are 3 general ways advisors can get compensated:

  1. Commission only

  2. Fee-only

  3. Fee and Commission (Usually called “fee-based”)

We at Teacher Wealth have chosen to be a fee-only firm because we think it minimizes the conflicts of interest when making recommendations and it also incentivizes providing good ongoing service to the client.  But let’s be very clear.  No matter what model is used, it is impossible to get rid of all conflicts of interest when it comes to financial advice.  Incentives matter and do influence behavior.

Our intention is to be fair to all types of these models as we explain them, but just know, we might be a bit biased as we think about these pay structures.  

Commission Only

These advisers get paid any time they sell a product.  It could be an investment product (like a mutual fund) or an insurance product (like life insurance or annuities).  The company that offers the product pays the salesperson.

Examples of common commissions you may see:

  • Life insurance - the commission is often 50%-100% of the first year’s premium.  Additionally it can average 2%-5% of premiums in subsequent years.

  • Long-term care insurance - the commission is often 30%-70% of the first year’s premium and can average 4%-6% in years afterward.

  • Disability insurance - 30%-50% of first year’s premium.

  • Annuities - a range of 1%-10% depending on the type of annuity.  Usually the more complex the annuity, the higher the commission.

  • Mutual funds - sales loads often average 3%-6% of the amount invested.

Some argue that commissions influence the advice given in negative ways. For example, the potential of a whole life insurance product being sold instead of term life insurance when it’s not appropriate because the insurance salesperson gets a much higher commission for the sale of the whole life product compared to term.

We don’t get paid this way but these advisers are important.  People need insurance.  We work with many good commission advisers all the time as we help our clients get the important products they need.


With fee-only advice, advisors are only paid by the fees they directly charge their clients.  No third party is paying the advisor.  So many argue it is cleaner.

Advisors are different in the specific fee they charge.  Here are some possible fee arrangements:

  • Assets under management (AUM) - Advisors are paid based on a percentage of the total assets that the advisor manages for their clients.  This usually ranges 0.8% - 1.5% per year.  Sometimes this fee will include financial planning as well; sometimes not.

  • Project-based - A fee is charged for a specifically defined project.  This is usually a one-time engagement.  Often this is a comprehensive financial plan or work to advise on a specific part of a person’s finances (like college planning or Social Security decisions).

  • Retainer or Subscription - An ongoing fee (often monthly) allowing you access to the advisor.  Advice is probably more comprehensive in nature.  This can be all over the place depending on what services are offered but a common range would be $4,000 to $10,000 per year (or $350 to $850 per month).

  • Hourly - Clients pay based on the time that an advisor is working either meeting with a client or analyzing and preparing in the planning process.  The longer the time needed, the higher the total fee.  Hourly rates often range from $200-$400 per hour.

  • Other - There are a few other fee structures out there like basing the fee on complexity of the planning a family needs or a percentage of net worth.

All of these different fees have their pros and cons.  Trust me when I say that there are debates (often heated) within the fee-only advisor community about which type of fee serve clients best.

From my perspective, there is no perfect fee structure and what is best for one client might not be ideal for another.

One advantage of hiring a fee-only professional is that they are almost certainly a fiduciary advisor when they are giving you advice.  Meaning they are obligated to put their clients’ interests ahead of their own.  (You might be asking yourself, “Shouldn’t all advisors be held to the fiduciary standard?”  Well, I don’t make the rules, but understand your pain.)

Fee and Commission

These advisors are able to charge either fees or commissions.  It depends on how the company is organized, but often they charge a fee on any investment management or financial planning they do, but are still able to sell investment or insurance products for a commission.  

Some of their clients are paying fees while others are paying commissions.  Some clients are paying both.  

Whether these advisors are under the fiduciary standard can depend on how they are working with you or what services they are providing.  To make sure you understand, it is best just to ask them if they are fiduciaries and when they stop being one.

Other Considerations

It is important to understand that no matter how you are being charged you may or may not be getting financial planning.  And the advice they are giving may or may not be comprehensive to your entire finances.  Both of which we at Teacher Wealth feel is very crucial to getting sound advice.

Also, the fees (and commissions) discussed above is what goes to the advisor.  There are also other fees that you are likely paying.  These can include:

  • Administrative fees

  • Annual investment operating expenses

  • Trading fees

  • Management fees

  • And more

Not sure about other types of advisors, but a fee-only advisor will be able to (and should!) show you all of the types of fees that you are paying and specifically how much they will cost you.  Unfortunately, fees have often been glossed over in the financial industry causing ignorance and confusion.

Advisors are valuable and should be paid for their advice.  But you should know exactly how and what you are paying. 

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Ideal Clients

  • College Planning
  • Educators, Teachers, and Academics
  • Gen X
  • Holistic Financial Planning

Ways Advisor Charges

  • Monthly Fee
  • Hourly
  • Assets Under Management

Fee Options

  • Monthly Fee: $125+/mo
  • Hourly Fee: $200+/hr
  • Assets Under Management: 1.25%

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