Qualitative Decisions

Working After Retirement

We recommend some form of employment after you retire from teaching. There are two main benefits of part-time or full-time employment. The first is the financial benefit. The extra income will allow you to supplement your TRS annuity and delay withdrawals from your IRAs and 403(b)s. By giving your money more time to grow, your nest egg will be larger and can have the potential to last longer into your retirement. The second benefit is that it is good for your emotional health to get out of the house and engage with other people. We’re not suggesting another full-time career, but a part-time job can give structure to your life.

Inflation

The Challenge

I call inflation the silent assassin of purchasing power. Each year, your purchasing power erodes very gradually. Since your TRS is a fixed payment and doesn’t increase each year to keep up with inflation, at some point you will feel the impact.

Why It’s Important

Think about teachers who retired around 1990 with a salary of $45,000 per year and TRS income of $32,000 per year. Thirty years ago, that was enough to retire upon. How do you think you would manage with a TRS Annuity of $2,700 per month?

Recommendation

As you can see in the example, even with today’s low inflation rates, your purchasing power will be cut in half in 20 years. So, it is VERY important to have a plan to deal with inflation. We can help you develop that plan.

This hypothetical example is for illustrative purposes only. The above illustration does not take into account the effect of any state or federal taxes. Actual results will vary.