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Solving the retirement puzzle

Posted on April 26, 2018

Give yourself the future you deserve

How do you picture your retirement? Traveling with a loved one? Soaking up sun on the beach? Or maybe, you just want to spend more time with your family.

Even if you’re in the earliest stages of your career, retirement should already be on your radar. But retirement can feel like putting together a giant puzzle with many missing pieces. Where exactly will my retirement income come from? How much of my paycheck is already contributing to retirement? How will I come up with enough money?

We can help you put this puzzle together. Understanding the different pieces is the first step. Your state retirement program, for instance, is one piece that is already in place for you.

1. Your state’s retirement system (aka your pension)

Each state has a different teachers’ retirement system (TRS), and each provides different retirement benefits, so ask your employer about yours. Generally, regular payments are taken from your paycheck and gradually increase in time as you earn more money. These contributions may go into a retirement account where the benefit is based on the amount contributed. Or they may go into a pension where the benefit is based on a formula. These small contributions from your paycheck may not seem like a lot of money at first, but over time, that small trickle of funding can make a big splash in your overall retirement pond. However, your state’s retirement system alone may not guarantee a comfortable retirement.

2. Social Security benefits

Depending on your state, you may or may not pay into Social Security. However, it’s still worth finding out if you’re eligible for benefits, especially if you have paid into the system in another position or your spouse has paid into it. You don’t want to leave these benefits on the table, so confirm your eligibility by getting more information from the Social Security Administration1.

3. Your employer’s voluntary retirement plan

Saving through an employer-sponsored plan, such as a 403(b), is convenient and may have tax advantages. Employer-sponsored plans can supplement your pension and Social Security benefits at retirement. These plans are similar to 401(k) plans offered by many corporations and give you tax-deferred savings, which is one of the best ways to make the most of your paycheck.

To get started with your employer plan:

  • Research the employee benefits for your district
  • Contact your employee benefits or payroll department
  • Contact a provider within your employer’s plan

4. Filling the gap

Think about the lifestyle you want in retirement. You will no longer have some of the expenses associated with working, such as payroll taxes, commuting costs, etc. However, other expenses may go up. For example, many people want to travel more in retirement, and that’s more expensive than staying home. Putting money away now will give you another pot of money you can pull from when you retire.

But how much money will you need? Let’s take the best-case scenario: You qualify for both TRS and Social Security benefits1. Even then, it’s still not usually enough to fill the gap between what you’ll have and what you’ll need to live a comfortable retirement. Voluntary savings, such as contributing to a 403(b) plan, may help make up some of the difference. Any way you can start saving a little extra will help.

A good way to determine where you can find ways to stow some money away is to track everything you spend, from the granola bar you bought from the vending machine at work to the $30 you spent going out after work. You might find ways to cut down on costs. For example, you could buy granola bars from the grocery store and spend $5 a week instead of $10 through a vending machine. Little things can add up to make a big difference.

Want to learn more about how you can start saving? Use our agent locator to speak to your local Horace Mann representative.


1Be advised, however, that two Social Security laws can affect people who work or have worked in a job not covered by Social Security and did not pay Social Security tax on those earnings. One is the “windfall elimination provision,” which affects how your Social Security retirement and disability benefits are calculated if you receive a pension from work not covered by Social Security. The other one is the “government pension offset.” This applies if you are eligible for Social Security benefits as a spouse, widow or widower.

AM-C04291 (Apr. 18)

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