Will You Live Your Retirement Dream Or Have a Retirement Nightmare?

Why You Should Save More in Your Retirement Plan

by Keith W. Young

Paying off debt, saving for retirement, and funding college savings for children are almost impossible to achieve without proper planning. As a teacher, it is very important for you to put aside savings for your future and for retirement. Today, 3 out of 4 educators retire financially stressed.  One of the major reasons is that only 1 out of 4 save in a 403(b) planto supplement their TRS.  Why?  It is because of lack of financial literacy and an advisor to work with.

Did you know that in the state of Texas, public school and government employees are not eligible for Social Security? A retiree must rely on his or her state pension (TRS), a 403(b)/457(b) plan and savings to maintain their lifestyle in retirement, so they can retire in dignity.

Here are the facts … The average teacher in Texas works 24.6 years. He or she retires at an average salary of $52,000.  After taxes, health insurance, joint survivor benefit cost, the net monthly spendable income is $1,648! Can you afford to retire on $1,648 per month? This is why it is so critical for you to save in a 403(b) today.  The average teacher saves $225 per month.  How does that change his or her paycheck?  In a 15% tax bracket and with a salary of $50,000, the teacher’s take-home pay would be reduced only by $191.25.

A 403(b) plan offers pre-tax savings.  And savings grow tax free until you begin withdrawing funds after 59 ½ or at retirement.

The more you can save, the bigger your nest egg will be for retirement and living expenses.

Save now for your future and retire in dignity!

The Truth About State Pension Plans for California and Texas Educators

The average retirement age for California public school teachers is about 62, according to the California State Teachers’ Retirement System. They retire with an average of 27 years on the job, at just above $48,000 a year before taxes and other deductions.California teachers currently contribute 8% of each paycheck to their own retirement fund.

According to the Teacher Retirement System in Texas, school district employees retire at 62 years old with the average years of service at 24.6 years.  They average about $51,000 a year before taxes and other deductions.  After deductions and insurance, most have a net spendable income of $1,600 to $1,800 per month.  Why? 

Unlike most of us, they don’t get Social Security. That is why saving in a 403(b) or 457(b) plan is critical for their financial futures and retirement.