TRS plans offer tax-advantaged savings, meaning that teachers can contribute to their plans with pre-tax dollars. This reduces their taxable income for the year, which can lead to significant tax savings.
Employer contributions
Many TRS plans also offer employer contributions, which can further boost teachers' savings. These contributions are typically made as a percentage of the teacher's salary, and they can range from 5% to 10% or more.
Investment options
TRS plans typically offer a variety of investment options, so teachers can choose the investments that best meet their individual needs and risk tolerance. These options may include stocks, bonds, mutual funds, and exchange-traded funds (ETFs).
Vesting schedules
TRS plans typically have vesting schedules, which determine when teachers can access their employer contributions. Vesting schedules can vary, but they typically range from five to ten years. Once a teacher is vested, they can withdraw their employer contributions without penalty, even if they leave their teaching job.
Portability
TRS plans are portable, meaning that teachers can transfer their funds to another TRS plan or to a 403(b) plan if they change jobs. This can help teachers maintain their savings and continue to grow their retirement nest egg, regardless of where they work.
Survivor benefits
TRS plans typically offer survivor benefits, which can provide a financial safety net for a teacher's loved ones in the event of their death. These benefits may include a death benefit, which is a lump sum payment that is paid to the teacher's beneficiaries upon their death, and a survivor annuity, which provides monthly payments to the teacher's spouse or other designated beneficiary.