Secure your future

In the past two issues, we have reviewed your choices about whether to elect the maximum retirement allowance or take an option to provide for your dependents or beneficiaries, and whether or not to remove a lump-sum before retirement. Now it is time to think about what to do with your Tax-Deferred Annuity account.

At retirement, a member must make a decision as to whether to collect the most he or she can collect — maximum retirement allowance — with no provisions for dependents or beneficiaries, or a reduced retirement allowance that will provide for dependents or beneficiaries.

The fight to preserve pensions has really heated up. Gov. Andrew Cuomo has proposed a new pension tier for new public employees — Tier VI. Under the proposal, new employees would have to contribute at a higher rate while the formula for calculating their pension would result in smaller pensions.

Every year as we grow older, we say to ourselves that there are discussions we must have with our parents, adult children or next of kin. Most of us, every year, put off what we anticipate will be an uncomfortable conversation. We recommend that you put it off no longer. You must have a conversation with your parents, adult children or next of kin — and you should do it sooner rather than later.

Check your mailbox because the third quarter information for the Quarterly Account Statements has been issued. These statements give a summary of your Qualified Pension Plan accounts as well as a summary of your Tax-Deferred Annuity accounts at the Teachers’ Retirement System. Included are the names of your designated beneficiaries, as well as any loan activity in your qualified or tax-deferred accounts.

Many members find themselves in the position of simultaneously providing for their children as well as for their aging parents. For those in this situation — it has been termed the “sandwich generation” — it’s important to create a financial plan that helps ensure the needs of all three generations.

This year, Congress has declared Oct. 16 through Oct. 22 National Save for Retirement Week. We urge you to supplement your pension, Social Security and retiree health insurance by participating in the Tax Deferred Annuity. If you can set aside even more, you may wish to consider putting additional savings in the city’s Deferred Compensation Plan.

One important issue is how we deal at retirement with what for most of us is our largest fiscal asset: the Tax-Deferred Annuity. Over the years, we have contributed to our Tax-Deferred Annuity accounts and they have grown by the investment returns they have earned in the six Teachers’ Retirement System’s Passport Funds.

These are the options that retirees in Tiers II, III and IV can use to provide for their heirs and beneficiaries.