PREPARING FOR RETIREMENT

The Big Day Is Finally Near!

Becoming eligible to retire puts you that much closer to retirement, but this important milestone isn’t the last step on your journey. Before you hand in your paperwork, take a little time to find out if you’re really ready to retire. A good place to start is with this video, which covers all the basics in just 4 minutes.


Estimate all your post-retirement income, including your TCDRS benefit, Social Security, personal savings and any other investments. To estimate your TCDRS retirement benefit, simply sign in or register for online account access.

Next, make a detailed estimate of your post-retirement expenses. Include basics like housing and everyday living costs, as well as healthcare, big-ticket items like a new car, and fun money for travel and leisure.

Compare your estimated income to estimated expenses. If your income-to-expenses projection appears closely matched, there’s a good chance you still need additional income in retirement. It’s not too late to start saving and investing extra money, and you might consider delaying retirement or working part-time.

If your employer offers retiree healthcare coverage, find out what you need to do to qualify for it. Consider getting a full medical exam while you are still covered as an employee.

You are eligible to retire when you meet any one of the following requirements:

  • At age 60 (once you are vested)
  • Rule of 75 or 80 (your age plus service time equals 75 or 80, depending on your employer’s requirements)
  • At any age with 20 or 30 years of service time (the amount of service time is set by your employer)

To find your employer’s requirements, simply sign in or register for online account access.

Just because you can retire at a certain age doesn’t mean you should. Working longer gives your TCDRS savings more time to grow. It also boosts your future Social Security benefit.

You can experiment with different dates to find the best fit for your retirement needs. To run benefit estimates, simply sign in or register for online account access, or call Member Services at 800-823-7782.

Give yourself plenty of time — at least three months. Some of the decisions you make about your retirement options cannot be changed after you retire, so don’t rush the process. Our retirement roadmap and checklist will help you assess your readiness and begin planning.

Once you have a target date in mind, please call Member Services at 800-823-7782 to start your retirement journey.

Choosing a benefit payment option is one of the most important things you'll do when you apply for retirement with TCDRS.

This video walks you through each option to help you decide. All of the TCDRS benefit payment options provide you with a monthly payment for the rest of your life. The difference in the monthly amounts reflects the possible payments to your beneficiaries after you pass away.

 

As you consider these benefit payment options, think about your overall income needs in retirement, whether your spouse is covered by his or her own retirement benefits and the ongoing financial needs of your loved ones after you pass away. All of these factors may influence the option you select. Your options are:

  • Single Life: Provides the highest monthly payment, but all payments stop when you pass away. Your beneficiary will not continue to receive monthly payments. You might select this option if you are single and have no dependents or if you are married and your spouse has his or her own retirement benefit.
  • Guaranteed Term: You get a lifetime benefit. If you pass away before the term ends, your beneficiaries will continue receiving payments until the end of the term. You can choose terms of 10 or 15 years. The term starts on the day you retire. You might select this option if you want to provide financial support to a loved one in case you pass away during a certain timeframe, such as when a child is in college.
  • Dual Life: Your beneficiary receives 100%, 75% or 50% of the benefit you received for life. The lower the percentage you leave to your beneficiary, the higher your monthly payment. You may name only one primary beneficiary. You might select this option to provide for a spouse or other loved one who needs lifetime financial support.
  • 100% to Beneficiary With Pop-Up: Under this Dual Life option, your beneficiary receives 100% of your monthly payment for life when you pass away. However, if your beneficiary passes away before you, your monthly payment will “pop up” to a higher monthly amount, as if you had retired under the Single Life benefit payment option.

You can experiment with different options to find the best fit for your retirement needs. To run benefit estimates simply sign in or register for online account access, or call Member Services at 800-823-7782.

In summary, here are your benefit payment options at a glance:

Some employers give you the option of taking a single payment of up to 100% of your TCDRS account balance when you retire. The lump-sum payment lowers your monthly benefit over your lifetime. You still get monthly benefit payments for life, but the payments will be smaller based on the amount of the lump-sum payment.

A lump-sum payment may also have serious tax consequences. We are required by the IRS to automatically withhold 20% of your payment for taxes. You may also be subject to additional tax penalties. You can specify additional withholding when you apply for your partial lump-sum payment.

Before selecting this option, please contact Member Services at 800-823-7782 to find out how it will affect your lifetime benefit payment.

Visit the Social Security website to apply for benefits online or to request an estimate. Remember, if you wait and start your Social Security benefit later, it will be higher. The monthly benefit for your spouse after you pass away may also be higher if you wait.

Working in retirement is a great way to supplement your income. With TCDRS, you can go back to work for the employer you retired from, but you have to meet certain requirements:

  • You cannot have a prior agreement or understanding with your former employer that you will be rehired.
  • You must have a break in service of one full calendar month. For example, if your employment terminated on April 15, you can’t go back to work for that same employer before June 1. The entire calendar month of May must pass before you can be rehired.

If you had an agreement to be rehired or if you don’t have a full calendar month break in service with your former employer, then your retirement benefit payments will be stopped and you will have to repay the money you’ve already received from TCDRS.

If you have concerns about returning to work for the employer you retired from, please talk to that employer’s human resources department.

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