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Retirement Planning For Educators
Standing in front of a room full of students would seem daunting to most of us, but you do this every day. Your ability to educate while inspiring minds is a tremendous skill that you have mastered over time. Understanding your retirement benefits can also take time to master.
In the beginning, you are handed a bunch of forms to fill out with no real help or education on what options to select, how these selections may affect you, or any insight into what might make the most sense for your situation. Though important, these choices may not seem like a high priority when you have so many other things to focus on.
We know how impactful these decisions can be and are ready to help you understand your benefits, make the best selections, and plan for the retirement you want.
Schedule a Free Consultation
What’s Included in This Free 1-Hour Consultation?
Understanding your DRS Benefits
- Log into your site
- Review your pension benefit options
- Confirm your beneficiaries are current
- Review your investment options – if any
- See what your contribution amounts are
How to Save More For Retirement or Your Other Goals
- Learn what your options are for saving more
Bring Your Spouse/Partner
- See how your retirement fits into the big picture
This is a no-obligation, free consultation.
We are here to help you understand your benefits and answer your questions.
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Ready For Some Details?
Your Washington Retirement Plans, TRS, SERS and PERS, have different parts.
Select your plan below to see more:
TRS
Teachers Retirement System
Teachers, your retirement plans have different parts and vary depending on if you are TRS 2 or TRS 3.
Part 1 – The Defined Benefit Plan (Your Pension)
TRS 2 - When you have worked at least 5 years of service you are a "vested" member and qualify for a retirement. 5 years is the minimum, but you can earn an unlimited number of years to increase your pension amount.
The TRS 2 formula used to calculate what your income will be for this part of your plan is:
2% x Service Credit Years x Average Final Compensation = Monthly Benefit
Example:
- If you work 23 years and the average of your highest 60 months of income (AFC) is $5400 per month.
- 2% x 23 years x $5400 = $2484
- When you retire, you’d receive $2484 per month
TRS 3 - When you are "vested" you are eligible to receive this benefit. One way for TRS 3 to be vested includes, having worked at least 5 years of service credits, including at least 12 months after age 44. Other ways are to have 10 service credit years, or 5 service credit years earned in TRS 2 before June 1 of 2003. Full retirement age is 65, or 62 with 30 or more years of service.
The TRS 3 formula used to calculate what your income will be for this part of your plan is:
1% x Service Credit Years x Average Final Compensation = Monthly Benefit
Example:
- If you work 25 years and your average highest 60 months of income (AFC) is $5,500 per month.
- 1% x 25 years x $5,500 = $1375
- When you retire, you would receive $1,375 per month income from your pension.
Part 2 – The Defined Contribution Plan (Your Investment Account)
TRS 2 – Your Plan doesn’t include an investment account.
Your plan was created before this was an included part of the program.
For you, your Pension benefit is your retirement and is calculated at a higher 2% of your average final compensation.
TRS 3 – When you accept your teaching position, part of your paperwork is to set the contributions you will make to this part of your plan.
You can contribute between 5% and 15% of your wages to your investment account, based on your age and what option you choose.
Once selected this is permanent, choose the amount carefully.
The funds in the investment accounts are all managed by the Washington State Investment Board. The options are: One-Step (automatically adjusted for you based on your age), WSIB TAP (Total Allocation Portfolio – Managed the same as the pension fund is invested) or Build and Monitor (the DIY approach choosing from the provided selection of investments).
Part 3 – The 403B and Deferred Compensation Plan (Your optional items)
Not everyone takes advantage of these, but they could help you get to your dream retirement.
403B
- Great way to save more for retirement
- Advisor guides you in selecting funds that align with your goals
- Actively managed investments
- Pre-tax contributions through payroll deductions, minimum $25
- Adjustments made as needed to remain in line with your future plans
Deferred Comp
- Self-Directed Voluntary program
- Pre-tax contributions
- Contribute through payroll deductions, minimum $30 per month, or by percentage deductions
- Change contributions by phone or online
- Funds are selected by the WA State Investment Board.
These are two of the other options available to help you save more for retirement.
Our team at Consilium Financial is here to help you understand your retirement and all the options available to you. Whether just getting started, experiencing a life event that changes your details or getting close to retirement, no questions are too big or small. Let’s talk.
SERS
School Employees Retirement System
Are you a Certificated or Classified Employee of a Washington State Public School District? This retirement plan is just for you! It will vary depending if you are SERS 2 or SERS 3.
Part 1 – The Defined Benefit Plan (Your Pension)
SERS 2 - The SERS Plan 2 is a lifetime retirement pension plan. You and your employer contribute a percentage of income to fund the plan. The contribution rates are set by the state Pension Funding Council (PFC) and are updated every 2 years. There are some limits for high income earners.
Here is the formula used to calculate what your income will be from the pension.
2% x Service Credit Years x Average Final Compensation = Monthly Benefit
Example:
- If you work 23 years and the average of your highest 60 months of income (AFC) is $5400 per month.
- 2% x 23 years x $5400 = $2484
- When you retire, you’d receive $2484 per month
You will need 10 or more years of service to qualify for retirement, with the full retirement age being 65. If you want to go early, you can leave as early as age 55, though the benefit could be reduced depending on your total years of service.
SERS 3 - The First part of your plan is your pension. Your employer contributes to this part of your retirement plan.
When you meet plan requirements and retire, you are guaranteed a lifetime monthly benefit from the pension.
The formula used to calculate what your income from your pension will be is:
1% x Service Credit Years x Average Final Compensation = Monthly Benefit from defined benefit portion of plan 3.
Example:
- If you work 23 years and your average highest 60 months of income (AFC) is $5,400 per month.
- 1% x 23 years x $5,400 = $1242
- When you retire, you would receive $1,242 per month in pension income.
Remember, your investment income, from part 2, is calculated separately.
You will need one of the following to be eligible for a pension retirement:
- 10 Service Credit Years
- Five years service credit with at least 12 months earned after age 44
- Five service credit years earned in Pers Plan 2 before Sept 1, 2000
Part 2 – The Defined Contribution Plan (Your Investment Account)
SERS 2 – Your Plan doesn’t include an investment account.
Your plan was created before this was an included part of the program.
For you, your Pension benefit is your retirement and is calculated at the higher 2% of your average final compensation.
SERS 3 – When you accept your teaching position, part of your paperwork is to set the contributions you will make to this part of your plan.
You can contribute between 5% and 15% of your wages to your investment account, based on your age and what option you choose. If you don’t select an option for your contribution rate, your withholding will default to Option A, 5%.
Be careful to choose wisely, once your rate is set, you can change it only when you change Plan 3-covered employers. Changing means working for a different employer, not another division or department within your current workplace.
There are two types of funds to choose from for your investment account:
One-Step
There are two One-Step Choices
Target Date: These investments are automatically adjusted for you based on your age.
This is the default investment type for customers who do not select investments.
WSIB TAP (Total Allocation Portfolio): This fund option is not adjusted based on aged, but is managed in the same way the state pension fund is invested.
If you select this option, all your new contributions will be invested in this fund.
Build and Monitor
This is a DIY (do it yourself) approach to investing your funds.
You choose from a selection of investments and create your own mix from a list of funds.
The DRS and the Plan 3 record keeper can provide you with information about investments, but cannot offer investment advice.
The funds in the investment accounts are all provided by the Washington State Investment Board.
Part 3 – The 403B and Deferred Compensation Plan (Your optional items)
Not everyone takes advantage of these, but they could help you get to your dream retirement.
403B
- Great way to save more for retirement
- Advisor guides you in selecting funds that align with your goals
- Actively managed investments
- Pre-tax contributions through payroll deductions
- Adjustments made as needed to remain in line with your future plans
Deferred Comp
- Self-Directed Voluntary program
- Pre-tax contributions
- Contribute through payroll deductions, minimum $30 per month, or by percentage deductions
- Change contributions by phone or online
- Funds are selected by the WA State Investment Board.
These are two of the other options available to help you save more for retirement.
Our team at Consilium Financial is here to help you understand your retirement and all the options available to you. Whether just getting started, experiencing a life event that changes your details or getting close to retirement, no questions are too big or small. Let’s talk.
PERS
Public Employees Retirement System
Public Employees, your retirement plans have different parts and vary depending on if you are PERS 2 or PERS 3.
Part 1 – The Defined Benefit Plan (Your Pension)
PERS 2 - When you have worked at least 5 years of service you are a "vested" member and qualify for a retirement. 5 years is the minimum, but you can earn an unlimited number of years to increase your pension amount. Though full retirement age is 65, you can choose to retire as early as age 55, but your benefit can be reduced depending on your total years of service.
The PERS 2 formula used to calculate what your income will be for this part of your plan is:
2% x Service Credit Years x Average Final Compensation = Monthly Benefit
Example:
- If you work 23 years and the average of your highest 60 months of income (AFC) is $5400 per month.
- 2% x 23 years x $5400 = $2484
- When you retire, you’d receive $2484 per month
PERS 3 - When you are "vested" you are eligible to receive this benefit. One way for PERS 3 to be vested includes, having worked at least 10 service credit years. Other ways are to have 5 years of service credit with at least 12 months earned after age 44, or 5 service credit years earned in PERS Plan 2 before June 1, 2003. Full retirement age is 65.
The TRS 3 formula used to calculate what your income will be for this part of your plan is:
1% x Service Credit Years x Average Final Compensation = Monthly Benefit
Example:
- If you work 23 years and your average highest 60 months of income (AFC) is $5,400 per month.
- 1% x 25 years x $5,400 = $1,242
- When you retire, you would receive $1,242 per month income from your pension.
Part 2 – The Defined Contribution Plan (Your Investment Account)
PERS 2 – Your Plan doesn’t include an investment account.
Your plan was created before this was an included part of the program.
For you, your Pension benefit is your retirement and is calculated at the higher 2% of your average final compensation.
PERS 3 – When you accept your position, part of your paperwork is to set the contributions you will make to this part of your plan.
You can contribute between 5% and 15% of your wages to your investment account, based on your age and what option you choose. If you don’t select an option for your contribution rate, your withholding will default to Option A, 5%.
Be careful to choose wisely, once your rate is set, you can change it only when you change Plan 3-covered employers. Changing means working for a different employer, not another division or department within your current workplace.
There are two types of funds to choose from for your investment account:
One-Step
There are two One-Step Choices
Target Date: These investments are automatically adjusted for you based on your age.
This is the default investment type for customers who do not select investments.
WSIB TAP (Total Allocation Portfolio): This fund option is not adjusted based on aged, but is managed in the same way the state pension fund is invested.
If you select this option, all your new contributions will be invested in this fund.
Build and Monitor
This is a DIY (do it yourself) approach to investing your funds.
You choose from a selection of investments and create your own mix from a list of funds.
The DRS and the Plan 3 record keeper can provide you with information about investments, but cannot offer investment advice.
The funds in the investment accounts are all managed by the Washington State Investment Board.
Part 3 – The 403B and Deferred Compensation Plan (Your optional items)
Not everyone takes advantage of these, but they could help you get to your dream retirement.
403B
- Great way to save more for retirement
- Advisor guides you in selecting funds that align with your goals
- Actively managed investments
- Pre-tax contributions through payroll deductions, minimum $25
- Adjustments made as needed to remain in line with your future plans
Deferred comp
- Self-Directed Voluntary program
- Pre-tax contributions
- Contribute through payroll deductions, minimum $30 per month, or by percentage deductions
- Change contributions by phone or online
- Funds are selected by the WA State Investment Board.
These are two of the other options available to help you save more for retirement.
Our team at Consilium Financial is here to help you understand your retirement and all the options available to you. Whether just getting started, experiencing a life event that changes your details or getting close to retirement, no questions are too big or small. Let’s talk.
Now For The Big Question…When Can I Retire?
You are eligible for a pension retirement when you are vested. To be vested varies depending on which retirement plan you are participating in.
Whether you are in TRS, SERS or PERS, it is a good idea to review all your options at least 5 years before you are ready to retire. This will help you adjust your savings plan and exit date as needed to maximize what you get out of your benefits.
You don’t have to figure it out on your own. We can review your options with you, help you see what a full vs early retirement would look like, and help you save more for retirement.
Whether you are just getting started or getting close to retirement,
Understanding your benefits can help you get where you want to go.
Let’s help you navigate the details to find what fits you best.
