How to Plan for Retirement: Part I

BY: RAY PIENIAZEK AGRICULTURE TEACHERS ASSOCIATION OF TEXAS EXECUTIVE DIRECTOR

HOW TO PLAN FOR RETIREMENT

PART I

Part 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.

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.”

WHAT IS MY RETIREMENT PLAN?

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%.

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 other exclusions which can be found on the TRS website.

Each fall you should receive a statement of what is being reported for you including salary and compensation. You should create an account at mytrs, linked off the TRS website. It is vital you check each year and report by the following May 31 to have any errors corrected. If it is your current district, this gives them time to correct it before the next reporting period. 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.

No matter which of the following categories you qualify under, to be eligible to retire and receive a lifetime monthly annuity you must have at least 5 years service credit, meet eligibility requirements, stop your employment, apply to receive retirement benefits, and complete a one month break in service. There are several categories our current teachers might fit in when looking at retirement.

WHEN AM I ELIGIBLE FOR RETIREMENT?

bers of TRS prior to September 1, 2007, had at least five years of service credit on August 31, 2014, and maintain membership until retirement, the following eligibility requirements must be met to qualify for normal age retirement; either be age 65 with five or more years of service credit, or any combination of age and service totaling 80 with at least five years of service credit.”(TRS website)

Teachers “who first became members or returned to membership on or after September 1, 2007, but prior to September 1, 2014, had at least five years of service credit on August 31, 2014, and maintain membership until retirement, the following eligibility requirements must be met to qualify for normal age retire-

“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.”

ment with age 65 with five or more years of service credit, or at least age 60, meets the Rule of 80 (combined age and years of service credit equal at least 80), and have at least five years of service credit.” (TRS website)

The last group of teachers are ones newest to the profession, including teachers “for whom any of the following apply: first became a member or returned to membership on or after September 1, 2014, (2) had less than five years of service credit on August 31, 2014, or (3) had at least five years of service credit on August 31, 2014, but terminated membership in TRS on or after September 1, 2014, and resumed membership in TRS again at a later date, the following eligibility requirements must be met to qualify for normal age retirement of age 65 with five or more years of service credit, or at least age 62, meet the Rule of 80 (combined age and years of service credit equal at least 80), and have at least five years of service credit.

In our next issue we will discuss other parts of TRS including accrued sick leave, your benefits payment from TRS and other options you might consider as ways to save money for retirement.

AG TEACHER SPOTLIGHT GINGER HOLTON

CISCO HIGH SCHOOL

TENURE: 19 YEARS

WHY DO YOU TEACH AG?

I have always wanted to be an ag teacher. I can't remember ever wanting to do anything else. My dad, Bob Andrew, taught ag for 49 years, 46 in Valley View where I grew up. I was fortunate to be able to tag along with my dad to all kinds of FFA events and activities. I loved spending time with him, and as I got older, I began to notice the impact he made on students and in our community. I always hoped to have that same influence in my own program and community.

I had a very well rounded experience as an FFA member and I know the impact it had on me personally. I truly believe kids are still good and there is something for every student in the FFA program. I believe students can find their place to shine in the FFA. I also feel a responsibility to advocate for the agriculture industry, especially in the day and time in which we live. What better place to promote ag, but in the classroom.

WHAT IS YOUR FAVORITE FFA MEMORY?

I have millions of memories of student successes and fun both in and out of the classroom. I think one of the happiest days was last year at our local show when we cut the ribbon on our new barn. We had waited for a very long time to build a project center. It snowed that day, but the barn was warm and full of our local FFA and 4-H members, parents, and what seemed like the entire community. People came to enjoy the show, support the kids, and support the program. The project center in my home town was like the hub of the community. That day, ours served the same purpose.

WHY DO YOU BELIEVE THAT AG EDUCATION IS SO IMPORTANT?

Now more than ever we have to advocate for our industry. We don't want to lose our way of life as we know it. Kids need support and guidance, and I think we as ag teachers have a great opportunity to not only teach young people about the ag industry and the importance of sustaining it but also to provide a positive influence in the lives of young people.