Teir 2 Bring More Masthead

Bring More

Why BRING MORE to your retirement?       

One of the advantages of being a public school teacher is that your service builds a guaranteed lifetime pension from Teachers’ Retirement System.

But you can enhance your TRS pension if you start to BRING MORE to your retirement savings.

And the earlier you start, the better off you’ll be in the future.

Don’t leave your future on autopilot.

If you began teaching after January 1, 2011 and had no prior service in an Illinois public pension system, you’re in the Tier II benefit structure. The three main things you need to know about your Tier II pension are:

  • In Tier II, you’re eligible to retire at age 67 and receive a non-discounted pension. You can retire between ages 62 and 67, but if you do, your initial pension will be discounted by 6 percent for each year that you are under age 67.
  • Tier II contains a cap on the amount of your salary that can be used to calculate your initial pension.
  • Under Tier II the annual automatic increase in your pension will equal one-half of the previous year’s inflation rate, with a cap of 3 percent. Automatic increases are not compounded — each year’s increase will be calculated from your initial pension.

The future is expensive. The average life expectancy is 86 for women and 83 for men. Over the last 20 years, inflation has averaged 2.86 percent annually. The federal government estimated recently that Americans can expect to spend an average of $130,000 on health care while in retirement. Plus, Social Security is not going to be much of a help for you. Illinois teachers have never been participants in Social Security.

Here are four strategies that can help you BRING MORE.

  1. Consult a licensed financial planner for help. TRS cannot provide financial advice to its members about what to do with their money. Reputable, licensed financial planners have experience helping people navigate their finances over their lifetimes to a happy retirement.
  2. Avoid the “here and now” trap. Your life will change. Envision the future you want and set achievable goals to meet that future. Realistically balance current needs with your desires down the road.
  3. Research the options available to help you BRING MORE. The Internet is loaded with helpful, detailed information about the pros and cons of retirement savings plans that you set up and can maintain throughout your career, such as Individual Retirement Accounts — both “traditional” and “Roth” IRAs — as well as tax–deferred retirement investment accounts such as 403(b), 401(k) and 457(b) plans.
  4. Keep in regular contact with TRS about your pension. Don’t wait until you are close to retirement age to understand your TRS benefits. Visit the TRS website. Throughout your career, you’ll be able to access an annual update of your account. Make sure your personal information on file with TRS — addresses, any change in your name, any changes in secondary beneficiaries — are always up–to–date.