Your retirement plan is a defined benefit plan which requires contributions from you and your employer, is determined by a formula based on your years of service and/or age and your final average salary, and will be paid to you throughout your lifetime. Eligibility for this benefit makes you an exclusive member of a small population of employees in the country who are fortunate enough to have such a pension plan. According to Towers Watson, between 1998 and 2015, the percentage of employers still offering a traditional defined benefit plan to most newly-hired employees fell from roughly 50% to 5% (401Kspecialistmag.com 2-22-16).
Another wonderful aspect of your TRS plan is that your benefit is not tied in any way to the stock market. Whether stocks go up or down, you can always rely on your TRS benefit to stay the same from month to month. When there is inflation, your benefit also includes cost-of-living adjustments, which may grow your benefit each year. And if you decide to take a retirement plan that leaves a benefit to your beneficiaries, they will receive a benefit for life!
What you receive from TRS is based on a formula that involves your length of service and your high average salary. TRS uses a very generous formula compared to other state plans as we calculate your benefit using your highest 24 consecutive months of pay when other states use 3 to 5 years of pay. Basically, the longer you work, and the higher your salary is, the more money you will receive from TRS.
Today most Americans rely on defined contribution plans, like 401(k) and 403(b) plans, which only last as long as the money you’ve earned through your investments, to save and prepare for retirement. But you are lucky! As a TRS member, you are automatically enrolled in a defined benefit plan.
Unlike 401(k) and 403(b) plans, your TRS benefit lasts as long as you are living, and could potentially live on past you if you choose a plan that leaves a benefit to a beneficiary. You will know exactly how much to expect every month. Many retirees find security in the knowledge that they can prepare budgets for their future plans and are comforted by knowing they will not outlive their savings. Ensuring that all of our members can retire with confidence and security!
Our goal is to help you retire with confidence and financial security! That includes offering you the knowledge, resources, and tools you need to effectively plan ahead. Our free seminars, workshops, and individual counseling events cover every stage of your career to help you prepare for retirement.
We offer programs to you, our new hires, which lay the foundation to help you plan for your future. You may think you have plenty of time to start planning for retirement, but it’s never too early to plan and save for your future.