BY: R AY P I E N I A Z E K A G R I C U LT U R E T E A C H E R S A S S O C I AT I O N O F T E X A S E X E C U T I V E D I R E C T O R
HOW TO PLAN FOR RETIREMENT PART I
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art of advocating for yourself is planning for the future. Many of you think you are too far away from retiring to really think about it. However, now is the best time to start planning out your finances for retirement. This is the first of a two part series discussing the topic of the Teacher Retirement System, how it works, and other items you may do to plan for retirement. Although I am not an expert on financial planning, I want to share some options for you to save or invest money for retirement. WHAT IS MY RETIREMENT PLAN? TRS is a pension fund based upon regular payments made during a person's teaching career. The pension is paid monthly from an investment fund to which that person or their employer has contributed. TRS defines their services as “TRS administers a defined benefit retirement plan that is a qualified pension trust under Section 401(a) of the Internal Revenue Code. The pension trust fund provides service and disability retirement, as well as death and survivor benefits, to eligible Texas public education employees and their beneficiaries.”
You contribute to your TRS fund in addition to the state making a contribution during each month of your employment. During the 2021 school year, you will be contributing 7.7% of your salary while the state is contributing 7.5%.
It is utterly important any mistakes are corrected within 5 years. From the Benefits Handbook, “To receive TRS credit for the service not reflected on your annual statement, you must notify TRS within five years of the end of the school year in which the service was rendered and provide verification of the service in a form prescribed by TRS. Once the service is verified, you may purchase it at actuarial cost at any time prior to your retirement to receive the service credit. If you do not verify the service within the five-year deadline, the service cannot be purchased and will not be creditable.” If you move or have a change of address, make sure you change it with TRS.
One question I often receive is “do stipends and extended days I received count towards it?” Yes! Compensation reported to TRS should reflect any type of monetary benefit you receive including sponsorships, stipends for services rendered, or any other payment not excluded by law. If you leave your district and they pay you for unused local leave, that amount will not be counted in your amount reported to TRS as part of your annual salary. There are some WHEN AM I ELIGIBLE FOR other exclusions which can be RETIREMENT? found on the TRS website. No matter which of the following categories you qualify under, to Each fall you should receive a be eligible to retire and receistatement of what is being re- ve a lifetime monthly annuity ported for you including salary you must have at least 5 years and compensation. You shou- service credit, meet eligibility ld create an account at mytrs, requirements, stop your emlinked off the TRS website. It is ployment, apply to receive retivital you check each year and rement benefits, and complete report by the following May 31 a one month break in service. to have any errors corrected. If There are several categories it is your current district, this our current teachers might fit gives them time to correct it in when looking at retirement. before the next reporting period. Teachers “who became mem30
