Monday, August 13, 2012
Texas Retired Teachers and the Elections
Are you ready for some hardball? OK, so hank Williams Jr. said football, not hardball but hardball may be the sport retired teachers need to play during this election season. So what do I mean by playing hardball?
I first heard the term hardball used by Richard Nixon, who was himself quoting Franklin Roosevelt. Roosevelt said that in politics we must play hardball, meaning"reward our friends and punish our enemies". In a political context that means vote for your friends. I'm a pretty consensus kind of guy and don't like to think about enemies but I do think we need to vote for our friends: but first we have to find out who our friends are.
How Do We Find Our Friends?
The current general election season is the perfect time to find out who our friends are. My suggestion is that we should go to the candidate forums and have a list of questions for the candidates. Our best friends, TRTA , may have some suggested questions on their website www.trta.org . I have not seen such a list though, so here are my suggested question
1. Are you aware that Texas Retired teachers do not have any automatic cost of living adjustment and have not received any cost of living adjustment since 2001. This means that retired teachers have lost 30 per cent of their purchasing power since 2001, putting some at the poverty level
2. If you believe that this situation should be corrected , are you willing to raise the state contribution to give the teachers some relief?
3. What other legislation or ideas do you have to rectify the cost of living situation for Texas retired teachers?
4. Are you aware that Texas teachers do not pay into Social Security or receive social security but have a defined benefit retirement program . Some have suggested changing the defined
benefit plan be changed to a defined contribution plan where Texas teachers will be completely dependent on their own knowledge of investments to fund their retirement. Do you favor changing the current defined benefit plan to a defined contribution plan?
What Do We Do With This Information?
After we have the answers to out questions, what can we do with those answers ? Here are some suggestions:
Write letters to your local newspapers and explain the issues concerning retired teachers and the candidates stand.
Work for a candidate. I have worked in many campaigns through the years and, believe me, they always look for and appreciate help.
Go to your trta local meetings and share what you learned about the candidates stands and see if there are any other suggestions.
Your Turn:
Do you agree with the suggestions above about playing "hardball?
Do you have any other issues you think the candidates for office should address?
Just scroll to the bottom and click on comments. a screen will appear for your comments. Thanks for reading and I look forward to your comments.
Friday, January 20, 2012
Texas Retired Teachers , Defined Benefits, Defined Contributions And Social SecurityThree Proposed Reforms
Does the current Teacher Retirement system of Texas need reform? Apparently some politicians, journalists and other inquiring minds think so. The main purpose of this blog is to discuss the two main reform suggested: moving from the current defined benefit plan to a defined contribution plan and moving the retired teacher system into social security.
The Current TRS defined benefit Plan
The current retirement plan for Texas Retired Teachers is a defined benefits plan. www.investopedia.com/terms/d/definedbenefitspensionplan.asp The defined benefit plans are a promise of a defined amount of pension for life based on a predetermined formula. In the case of the Texas retirement system the formula is to multiply the number of years paid into the system by 2.3 and then multiplying the average of the three highest salaries by that number. Lets say a teacher had taught for thirty years ; multiply thirty by 2.3 and you get 69; lets further suppose this retired teacher had an average of $ 50,000 for their three highest years; multiply that number by .69 and you get $34,000 for our fictional teachers lifetime pension. You probably already know the average retired Texas teacher makes quite a bit less. Though the purpose of this blog is descriptive and not persuasive I will reveal that this current TRS defined benefit plan, with some tweaking, is my choice. Now, onward to the proposed alternatives.
The Defined Contribution Alternative
Some state legislators and political commentators such as Bill King, Houston business man and occasional Houston Chronicle columnist. www.billkingblog.com have suggested that future the TRS be changed from a defined benefits plan to a defined contribution plan. What would that mean? Well, rather than a guaranteed lifetime amount, the retired teacher's final retirement amount would be based on the amount of contributions made by the teacher( with possible contribution from their school district) and how well or ,how poorly, these investments chosen by the retired teacher or at least those choices allowed by their district, perform over their active career in education, very much like the 403B plan most of us are familiar with. Obviously the investor ( teacher) would need to educate themselves about investing, which would require not only an interest in investing, but probably some aptitude for investing as well. My speculation is that under this system, some retirees would be better off, some about the same and some worse off, maybe a lot worse off.
Moving To Social Security
A second reform mentioned is that Texas would move all the teachers out of the TRS and join the social security system. www.ssa.edu. Would this be good for future teacher retirees? Probably not. The average social security recipient receives $18,000 while the average TRS annuitant makes $ 32,000, so although I was not a math major, I think I know enough math to recognize a bad deal when I see it. However, if retired teachers go another decade without a cost of living adjustment then the Social Security option might start looking better. I also think a case could be made for changing Social Security into a true retirement system by requiring that all Americans including members of Congress join the system and assuring that all American workers receive a pension worth 80 % of their working salary. However that's a topic for a future blog.
Your Turn
I would really love to have your opinion on:
1. Do you favor keeping the current defined benefit TRS system or one of the reforms.
2. Is there another reform you would favor?
3. Another comment you would care to make?
Just scroll to the bottom, click on comments and a space will magically appear for your comment Thanks for reading.
The Current TRS defined benefit Plan
The current retirement plan for Texas Retired Teachers is a defined benefits plan. www.investopedia.com/terms/d/definedbenefitspensionplan.asp The defined benefit plans are a promise of a defined amount of pension for life based on a predetermined formula. In the case of the Texas retirement system the formula is to multiply the number of years paid into the system by 2.3 and then multiplying the average of the three highest salaries by that number. Lets say a teacher had taught for thirty years ; multiply thirty by 2.3 and you get 69; lets further suppose this retired teacher had an average of $ 50,000 for their three highest years; multiply that number by .69 and you get $34,000 for our fictional teachers lifetime pension. You probably already know the average retired Texas teacher makes quite a bit less. Though the purpose of this blog is descriptive and not persuasive I will reveal that this current TRS defined benefit plan, with some tweaking, is my choice. Now, onward to the proposed alternatives.
The Defined Contribution Alternative
Some state legislators and political commentators such as Bill King, Houston business man and occasional Houston Chronicle columnist. www.billkingblog.com have suggested that future the TRS be changed from a defined benefits plan to a defined contribution plan. What would that mean? Well, rather than a guaranteed lifetime amount, the retired teacher's final retirement amount would be based on the amount of contributions made by the teacher( with possible contribution from their school district) and how well or ,how poorly, these investments chosen by the retired teacher or at least those choices allowed by their district, perform over their active career in education, very much like the 403B plan most of us are familiar with. Obviously the investor ( teacher) would need to educate themselves about investing, which would require not only an interest in investing, but probably some aptitude for investing as well. My speculation is that under this system, some retirees would be better off, some about the same and some worse off, maybe a lot worse off.
Moving To Social Security
A second reform mentioned is that Texas would move all the teachers out of the TRS and join the social security system. www.ssa.edu. Would this be good for future teacher retirees? Probably not. The average social security recipient receives $18,000 while the average TRS annuitant makes $ 32,000, so although I was not a math major, I think I know enough math to recognize a bad deal when I see it. However, if retired teachers go another decade without a cost of living adjustment then the Social Security option might start looking better. I also think a case could be made for changing Social Security into a true retirement system by requiring that all Americans including members of Congress join the system and assuring that all American workers receive a pension worth 80 % of their working salary. However that's a topic for a future blog.
Your Turn
I would really love to have your opinion on:
1. Do you favor keeping the current defined benefit TRS system or one of the reforms.
2. Is there another reform you would favor?
3. Another comment you would care to make?
Just scroll to the bottom, click on comments and a space will magically appear for your comment Thanks for reading.
Friday, October 21, 2011
The pensions of Texas legislators and the pensions of retired Texas teachers
The Face book page of the Texas Retired teachers Association www.face book.com/pages/TRTA-Texas-Retired-Teachers -Association/126989714019649 recently posted an article from USA Today describing how state legislators pass laws to give themselves lucrative pensions. In the case of the Texas Legislature, the House and Senate passed a law tieing their pensions to the salary of state judges, and then in the intervening years raised judges salaries from $42,000 to $125000, and thus have now guaranteed themselves a retirement pension of $125,000 per year. By way of contrast the average retired Texas teacher receives a pension of $ 30,000.
This obviously reflects poorly on the legislatures' sense of equity and openness. Perhaps the old joke is true that" no man's life or property is safe as long as the Texas Legislature is in session". Should something be done to correct this accumulative abuse of power? Absolutely! Would this make us feel better? Probably! However this would do little to improve the problems of retired teachers in areas where laws could ameliorate those problems. Instead we need to insure we have clear goals , and strategies to reach those goals, in order to persuade the public and the legislature to favor our cause.
Goals
1. Cost of Living Adjustment. As most of us are well aware retired Texas Teachers have not received a cost of living adjustment since 2001. Although, fortunately, the inflation rate has been low the past couple of years, the inflation rate has still averaged three% for the decade, meaning a teacher who retired in 2001 with an annuity of $ 30,000 now has the equivalency of $20,000 in spending power. Ten more years without a COLA and the same inflation rate would leave the same retiree with $ 10,000 in spending power. I, therefore, believe that a COLA is the most pressing problem facing retirees. However there are others that the legislature needs to adjust such as:
2. TRS Care. The TRS Care program for retirees is currently serving 212,000 retirees, their spouses and their beneficiaries. Unfortunately the program is funded on a pay as you go basis meaning each session of the legislature must declare the funding is available for the next biennium. The fund is currently due to run out of funds by 2014. Some form of permanent funding must be created quickly. These two problems must be addressed at the state level but some others must be addressed at the national level, such as:
3. WEP and the Offset The U.S. Congress passed two laws referred to by the acronyms WEP and the offset. One of these laws limits the amount of Social Security a TRS retiree can draw by up to two-thirds, while the other prevents the spouse of the retiree from drawing any of his/her social security.
4. Paying TRS Care premium pretax. One of the benefits enjoyed by many workers including those still employed by school districts is the premiums for health care are paid pretax ; a benefit not currently enjoyed by TRS annuitants. To illustrate, a current TRS retiree might be receiving a pension of $35,000 and paying $4,500 a month in TRS Care premiums. Under current laws the TRS annuitant must pay taxes on all $35,000. If Congress were to change the tax laws to give TRS retirees the pretax befit of most employees, the retiree in the previous example would only have to pay taxes on $30,500 of their pension, rather than on the entire $35,000. This would be a nice bit of relief for most retirees.
5. You may be aware that Medicare has frozen their premiums the past two years because social security recipients did not receive a cost of living adjustment. Guess who did get an increase in their medicare premiums. Well, yours truly for one. When I called Medicare to inquire about my increase I was told that Congress only exempted Social Security recipients. I explained that in Texas teachers did not have a social security option and not only did we miss a cost of living adjustment in 2010, like social security recipients, but Texas teacher retirees had not had a cost of living adjustment since 2001! After some weak attempt at sympathy I was told that nothing could be done because Congess' action only dealt with Social security; so my medicare premiums are now$110 rather than $ 96. So we are basically punished for not being part of a system we were not allowed to join.
6. In a future blog I will suggest some strategies I believe will help reach some of these goals.
Your Turn.
Please give your thoughts on the goals mentioned. Which of the goals do you consider most important ?Are there other goals you think we should push for that were not mentioned?
How To Comment:
Just scroll to the bottom of this page; click on comments and a box will open for your comments. Thanks in advance for your participation.
This obviously reflects poorly on the legislatures' sense of equity and openness. Perhaps the old joke is true that" no man's life or property is safe as long as the Texas Legislature is in session". Should something be done to correct this accumulative abuse of power? Absolutely! Would this make us feel better? Probably! However this would do little to improve the problems of retired teachers in areas where laws could ameliorate those problems. Instead we need to insure we have clear goals , and strategies to reach those goals, in order to persuade the public and the legislature to favor our cause.
Goals
1. Cost of Living Adjustment. As most of us are well aware retired Texas Teachers have not received a cost of living adjustment since 2001. Although, fortunately, the inflation rate has been low the past couple of years, the inflation rate has still averaged three% for the decade, meaning a teacher who retired in 2001 with an annuity of $ 30,000 now has the equivalency of $20,000 in spending power. Ten more years without a COLA and the same inflation rate would leave the same retiree with $ 10,000 in spending power. I, therefore, believe that a COLA is the most pressing problem facing retirees. However there are others that the legislature needs to adjust such as:
2. TRS Care. The TRS Care program for retirees is currently serving 212,000 retirees, their spouses and their beneficiaries. Unfortunately the program is funded on a pay as you go basis meaning each session of the legislature must declare the funding is available for the next biennium. The fund is currently due to run out of funds by 2014. Some form of permanent funding must be created quickly. These two problems must be addressed at the state level but some others must be addressed at the national level, such as:
3. WEP and the Offset The U.S. Congress passed two laws referred to by the acronyms WEP and the offset. One of these laws limits the amount of Social Security a TRS retiree can draw by up to two-thirds, while the other prevents the spouse of the retiree from drawing any of his/her social security.
4. Paying TRS Care premium pretax. One of the benefits enjoyed by many workers including those still employed by school districts is the premiums for health care are paid pretax ; a benefit not currently enjoyed by TRS annuitants. To illustrate, a current TRS retiree might be receiving a pension of $35,000 and paying $4,500 a month in TRS Care premiums. Under current laws the TRS annuitant must pay taxes on all $35,000. If Congress were to change the tax laws to give TRS retirees the pretax befit of most employees, the retiree in the previous example would only have to pay taxes on $30,500 of their pension, rather than on the entire $35,000. This would be a nice bit of relief for most retirees.
5. You may be aware that Medicare has frozen their premiums the past two years because social security recipients did not receive a cost of living adjustment. Guess who did get an increase in their medicare premiums. Well, yours truly for one. When I called Medicare to inquire about my increase I was told that Congress only exempted Social Security recipients. I explained that in Texas teachers did not have a social security option and not only did we miss a cost of living adjustment in 2010, like social security recipients, but Texas teacher retirees had not had a cost of living adjustment since 2001! After some weak attempt at sympathy I was told that nothing could be done because Congess' action only dealt with Social security; so my medicare premiums are now$110 rather than $ 96. So we are basically punished for not being part of a system we were not allowed to join.
6. In a future blog I will suggest some strategies I believe will help reach some of these goals.
Your Turn.
Please give your thoughts on the goals mentioned. Which of the goals do you consider most important ?Are there other goals you think we should push for that were not mentioned?
How To Comment:
Just scroll to the bottom of this page; click on comments and a box will open for your comments. Thanks in advance for your participation.
Friday, September 30, 2011
Retired Teachers: Finding a Way to Use All That New Time
Some of you may remember the old Hank Williams song If You Got The Money Honey I Got The Time. Well in retirement we may or may not have the money but we do have some new found time. How could we use that new found time? Well we could tell our spouse what to do but the only use of time that would provide is the time building the dog house we would soon be living in. A more productive pursuit might be to find a hobby, voluntary activity or part-time work. The purpose of this blog is to provide some ideas concerning hobbies or part-time work using a career personality survey called the Self Directed Search. www.self-directed-search.org
What Is The Self Directed Search
One man deserves credit for the Self Directed Search: Dr. John Holland. Dr. Holland is a professor of psychology at Johns Hopkins University and one of the nations preeminent career counselors. He developed the theory of the Self Directed Search while working as a classification specialist with the U.S. Army. Dr. Holland concluded that there are six basic personality types and six work environments and that by matching the personality with the work environment , one could help career searchers and those searching for college majors choose a satisfying career. The tests and surveys based on these personality types( Dr. Holland called them codes) have become the widest career counseling tools in the world. So what are these six types? Glad you asked; here they are:
Realistic
Investigative
Social
Artistic
Enterprising
Conventional
Realistic: Realistics are people who prefer what they consider the real world, the world they can see hear, smell , touch and feel. They like to work outdoors or with their hands. They usually like sports and are often quite good at them. Their favorite T. V. shows might include Extreme House Makeover and any sports shows.
Possible hobbies and jobs for Realistics:
gardening, landscaping, woodworking, golf, tennis work at Home Depot or Lowes, teach a physical skill.
Investigative: Investigative types usually like math and science and enjoy solving problems. Favorite T. V shows CSI; House
POSSIBLE HOBBIES AND JOBS:
Webb designing, math and science tutor, work in electronic stores like Best Buy and Frys , detective
Artistic: Artistic types not surprisingly , are creative and like music the visual arts or writing. Favorite T.V shows: Glee, American Idol
Possible hobbies or jobs: square dancing or Latin dancing, writing classes, learn to play a musical instrument, freelance writing, dance or art teacher, photography
Social: Social types enjoy working with people and also excel usually at mentoring and teaching. They are also good team players. Favorite T. V. shows: Dr. PHIL, Oprah
Possible jobs and hobbies. teaching,tutoring, any retail work that is service related, church worker, volunteering in hospital
Enterprising: Enterprising types like to be in responsible positions, are good decision makers, and are action oriented. They also are often good at speaking to groups. Favorite T.V.shows: Donald Trumps Apprentice
Possible jobs and hobbies: Toastmasters , sales, speak to groups about jobs, start their own business announce sporting events for school
Conventional: Conventional types like to use organizational or clerical skills. They are usually very good at detail work and math. Favorite T. V. show: Numbers
Possible jobs or hobbies: Helping others with income tax or budgeting, cooking, working in bank, helping people organize
Your TURN
1. Which of the Holland personality types are you and does it fit with any of your work history or hobbies?
2. How do you spend or plan to spend your extra time in retirement?
3. Any other comment you wish to make as long as it's not a personal attack or overly political.
4. To comment, just click on "comments" below and a screen will appear for your comments
What Is The Self Directed Search
One man deserves credit for the Self Directed Search: Dr. John Holland. Dr. Holland is a professor of psychology at Johns Hopkins University and one of the nations preeminent career counselors. He developed the theory of the Self Directed Search while working as a classification specialist with the U.S. Army. Dr. Holland concluded that there are six basic personality types and six work environments and that by matching the personality with the work environment , one could help career searchers and those searching for college majors choose a satisfying career. The tests and surveys based on these personality types( Dr. Holland called them codes) have become the widest career counseling tools in the world. So what are these six types? Glad you asked; here they are:
Realistic
Investigative
Social
Artistic
Enterprising
Conventional
Realistic: Realistics are people who prefer what they consider the real world, the world they can see hear, smell , touch and feel. They like to work outdoors or with their hands. They usually like sports and are often quite good at them. Their favorite T. V. shows might include Extreme House Makeover and any sports shows.
Possible hobbies and jobs for Realistics:
gardening, landscaping, woodworking, golf, tennis work at Home Depot or Lowes, teach a physical skill.
Investigative: Investigative types usually like math and science and enjoy solving problems. Favorite T. V shows CSI; House
POSSIBLE HOBBIES AND JOBS:
Webb designing, math and science tutor, work in electronic stores like Best Buy and Frys , detective
Artistic: Artistic types not surprisingly , are creative and like music the visual arts or writing. Favorite T.V shows: Glee, American Idol
Possible hobbies or jobs: square dancing or Latin dancing, writing classes, learn to play a musical instrument, freelance writing, dance or art teacher, photography
Social: Social types enjoy working with people and also excel usually at mentoring and teaching. They are also good team players. Favorite T. V. shows: Dr. PHIL, Oprah
Possible jobs and hobbies. teaching,tutoring, any retail work that is service related, church worker, volunteering in hospital
Enterprising: Enterprising types like to be in responsible positions, are good decision makers, and are action oriented. They also are often good at speaking to groups. Favorite T.V.shows: Donald Trumps Apprentice
Possible jobs and hobbies: Toastmasters , sales, speak to groups about jobs, start their own business announce sporting events for school
Conventional: Conventional types like to use organizational or clerical skills. They are usually very good at detail work and math. Favorite T. V. show: Numbers
Possible jobs or hobbies: Helping others with income tax or budgeting, cooking, working in bank, helping people organize
Your TURN
1. Which of the Holland personality types are you and does it fit with any of your work history or hobbies?
2. How do you spend or plan to spend your extra time in retirement?
3. Any other comment you wish to make as long as it's not a personal attack or overly political.
4. To comment, just click on "comments" below and a screen will appear for your comments
Friday, April 22, 2011
Seven Questions And Hopefully Some Answers For Retired Texas Teachers
If you’re new to this teacher retirement thing, this is meant as a primer for those who are just taking those baby steps into the world of retirement. I will present this in a question and answer format ( the Socratic method though I make no claims to be a Socrates) with the questions based on questions I myself had when I retired in 2005 and questions I have been asked by more recent retirees. If you have a question I don’t ask please go to the comments page at the bottom of this blog and ask your question. O K here goes:
1. Where Should I Start
If you’ve already decided to join our group of happy retirees
the best place to start is by visiting the TRS website. www.trs.state.tx.us . There , if you haven’t already done so you can order the packet you need to fill out to make your retirement official. The TRS website also has calculators for determining your retirement annuity( TRS refers to your monthly payment as an annuity) and you can also find out where TRS is holding meeting for retirees. I found these meetings most useful and reassuring and I believe most of you will also.
2. What Is A Standard Annuity And What Are My Options
The standard annuity is quite simply the maximum annuity you can receive. The standard annuity is calculated by : first the average of your five highest salaries , second multiply your years of service by 2.3 and, third multiply your second figure by your average salary and you have your annual annuity. In addition to the standard annuity there is the joint and survivors annuity. These options allows the retiree’s spouse or beneficiary , in return for a reduced standard annuity, to receive a percentage of the retirees annuity if the retiree predeceases the beneficiary. Under option 1 the beneficiary would receive 100 percent of the annuity, under option five 75 percent and under option 2, 50 percent. This is a critical decision and the employee and his/her spouse needs to think this over carefully. The amount of the reduction from the standard annuity depends on an actuarial calculation. You will need to contact TRS to get the exact amount; hey, sorry, I measured in history, not math.
3. What About Health Insurance?
You could of course try to go with out health insurance just
as you could choose to sleep over night in a rattlesnake den but neither would be a wise choice! If you are a “seasoned” citizen and have reached the age of 65 you will need to apply for Medicare. If you are eligible or receiving social security, Medicare will contact you; however if you are only with TRS you will need to contact Medicare at least three months before you turn 65 to sign up. If you are retiring before 65 you will probably want to sign up for the health insurance option for retired teachers: TRS Care. You can also sign up your spouse for TRS Care if she is no longer working. TRS Care has two options with different deductibles and premiums; make certain you reflect carefully on these options as TRS will not allow changes When you turn 65 ,TRS Care will become your secondary policy and will pay most of what Medicare does not pay. Also if your spouse is still working you could find out the cost of the coverage for you and compare this to your Medicare and TRS Care options.
4. Can I Work In The Public Schools After Retirement?
The short answer is yes. However the state legislature passed a law in 2001 that limited the amount of work a retiree
can work in a public school or college to 50 percent of what is considered full time for that month. For example in the public schools
, a retiree may teach for a half day or two weeks of a month. Adjunct professors at a community college could teach two classes in the spring and fall semester since five classes are considered a full load and one semester in the summer since two classes are considered a full load. So what happens if you exceed this limit? You will receive a nice little letters from TRS saying you must return your annuity for that month; I know because I once received one of those “ nice little letters”. There is no limit on the amount a retiree can work in a private school and no limit on substituting, except your desire to go fishing that day.
5. What About My 403 B
If you have a 403 B plan at work, which allowed you to invest tax free, and hopefully was matched by your district, (sometimes referred to as an annuity) you will need to decide what to do with your investment. Your first step should probably be to visit with your plan administrator to check on your options; usually these include rolling over to an IRA
or keeping your investment with your districts plan. If the thought of investing is about as appealing as translating ancient hieroglyphics ,you might want to consider finding a financial advisor or better yet educating yourself. Allow me to make one suggestion: there is a wonderful website called www.bogleheads.org that has a lot of guys and gals who are very knowledgeable about investments. Best of all they will answer your questions with great insight and the only cost is the time needed to sign onto the internet.
6. Are There Any Organizations For Retirees
I’m really glad you asked that question! We have a wonderful organization called Texas Retired Teachers Association. www.trta.orgAustin
and Washington. You will also be able to avail yourself of many discounts such as dental insurance and you will have an opportunity to meet a lot of nice folks in your local chapter.
7. What Will I Do With My New Spare Time?
This is not a trivial question and merits serious thoughts; however I think I have thrown enough words at you so I’m going to make that the subject of my next blog. Yes this is a shameless enticement to keep reading my blog.
Your Turn
I would be very happy to have your comments on:
1. Any elaborations or corrections you might have
2. Any questions you might have not brought up in this post.
3. Any other comments you might have.
How To Comment
1. Scroll to the bottom of this page
2. Click on Comments
3. A box will appear for your comments.
4. After your comments click “publish”
5. My complete Thanks in advance for your comments.
6. Please return to the blog because I will always reply to your comments.
1. Where Should I Start
If you’ve already decided to join our group of happy retirees
the best place to start is by visiting the TRS website. www.trs.state.tx.us . There , if you haven’t already done so you can order the packet you need to fill out to make your retirement official. The TRS website also has calculators for determining your retirement annuity( TRS refers to your monthly payment as an annuity) and you can also find out where TRS is holding meeting for retirees. I found these meetings most useful and reassuring and I believe most of you will also.2. What Is A Standard Annuity And What Are My Options
The standard annuity is quite simply the maximum annuity you can receive. The standard annuity is calculated by : first the average of your five highest salaries , second multiply your years of service by 2.3 and, third multiply your second figure by your average salary and you have your annual annuity. In addition to the standard annuity there is the joint and survivors annuity. These options allows the retiree’s spouse or beneficiary , in return for a reduced standard annuity, to receive a percentage of the retirees annuity if the retiree predeceases the beneficiary. Under option 1 the beneficiary would receive 100 percent of the annuity, under option five 75 percent and under option 2, 50 percent. This is a critical decision and the employee and his/her spouse needs to think this over carefully. The amount of the reduction from the standard annuity depends on an actuarial calculation. You will need to contact TRS to get the exact amount; hey, sorry, I measured in history, not math.
3. What About Health Insurance?
You could of course try to go with out health insurance just
as you could choose to sleep over night in a rattlesnake den but neither would be a wise choice! If you are a “seasoned” citizen and have reached the age of 65 you will need to apply for Medicare. If you are eligible or receiving social security, Medicare will contact you; however if you are only with TRS you will need to contact Medicare at least three months before you turn 65 to sign up. If you are retiring before 65 you will probably want to sign up for the health insurance option for retired teachers: TRS Care. You can also sign up your spouse for TRS Care if she is no longer working. TRS Care has two options with different deductibles and premiums; make certain you reflect carefully on these options as TRS will not allow changes When you turn 65 ,TRS Care will become your secondary policy and will pay most of what Medicare does not pay. Also if your spouse is still working you could find out the cost of the coverage for you and compare this to your Medicare and TRS Care options.4. Can I Work In The Public Schools After Retirement?
The short answer is yes. However the state legislature passed a law in 2001 that limited the amount of work a retiree
can work in a public school or college to 50 percent of what is considered full time for that month. For example in the public schools, a retiree may teach for a half day or two weeks of a month. Adjunct professors at a community college could teach two classes in the spring and fall semester since five classes are considered a full load and one semester in the summer since two classes are considered a full load. So what happens if you exceed this limit? You will receive a nice little letters from TRS saying you must return your annuity for that month; I know because I once received one of those “ nice little letters”. There is no limit on the amount a retiree can work in a private school and no limit on substituting, except your desire to go fishing that day.5. What About My 403 B
If you have a 403 B plan at work, which allowed you to invest tax free, and hopefully was matched by your district, (sometimes referred to as an annuity) you will need to decide what to do with your investment. Your first step should probably be to visit with your plan administrator to check on your options; usually these include rolling over to an IRA
or keeping your investment with your districts plan. If the thought of investing is about as appealing as translating ancient hieroglyphics ,you might want to consider finding a financial advisor or better yet educating yourself. Allow me to make one suggestion: there is a wonderful website called www.bogleheads.org that has a lot of guys and gals who are very knowledgeable about investments. Best of all they will answer your questions with great insight and the only cost is the time needed to sign onto the internet.6. Are There Any Organizations For Retirees
I’m really glad you asked that question! We have a wonderful organization called Texas Retired Teachers Association. www.trta.orgAustin
and Washington. You will also be able to avail yourself of many discounts such as dental insurance and you will have an opportunity to meet a lot of nice folks in your local chapter.7. What Will I Do With My New Spare Time?
This is not a trivial question and merits serious thoughts; however I think I have thrown enough words at you so I’m going to make that the subject of my next blog. Yes this is a shameless enticement to keep reading my blog.
Your Turn
I would be very happy to have your comments on:
1. Any elaborations or corrections you might have
2. Any questions you might have not brought up in this post.
3. Any other comments you might have.
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5. My complete Thanks in advance for your comments.
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