Jan 17, 2008 4:37 PM
Happy New Year! Is it really halfway through January? Now is a good time to examine your finances.
Retirement security is diminishing in the U.S. Only 60 percent of full-time workers age 21-64 work for an employer that sponsors a retirement plan. Only 53 percent of those covered participate in the employer’s plan. Those between ages 54 and 64 participate at a 60.1 percent rate. This, by the way, includes both Defined Benefit (DB) plans like our Qualified Pension Plan (QPP), which is a traditional pension plan, and Defined Contribution (DC) plans like our TDA Plan.
Public sector employees have much higher rates of participation than private sector employees. With unions representing less than 10 percent of private sector employees, the number of DB plans is shrinking and they are being replaced by DC plans. Of course, private sector employees do have Social Security and that gives them a bed-rock of retirement income that must be supplemented by savings and investments.
The UFT has, over the years, seen to it that we are covered by the “Four Pillars of Retirement Security”:
This leads us to remind you of some things to think about and do at this time:
1. Review the wonderful benefits available from TRS while you are working:
2. A very handsome pension and health insurance program when you retire.
3. In order to further secure the above, you must have on file at TRS:
4. Now is a good time to examine your finances as you prepare to file your income tax forms. You can reduce your current taxes and increase your retirement security by starting to contribute, or by increasing, your contribution to the TDA.
5. Have you started your basic estate planning?
You should minimally have on file a will, a durable power of attorney, a health care proxy and a living will. You may wish to contact a lawyer for help and guidance. If you need a lawyer and have none you should strongly consider contacting the NYSUT Legal Service plan at NYSUT Benefits 1-800-626-8101.
6. Have you met your other insurance needs? NYSUT’s Catastrophe Major Medical Program is an excellent supplement to the city-provided health insurance program. Long-term care insurance and disability insurance should be examined and considered.
You should also make sure that you have property and liability insurance; auto and homeowners insurance will protect your property and provide protection if you are responsible for causing damage or injury to another. We urge you to consider excess liability insurance (an umbrella policy) to provide greater financial protection.
7. Check your credit rating. A federal law requires each credit-rating agency to supply a free credit report each year. Get one in January and then four months later, and then four months later and then start again. These reports are available by calling 1-877-322-8228 or online at www.annualcreditreports.com.
8. Consider setting up a college savings fund for your loved one’s college expenses. See your school secretary and ask for Payroll Administration Memorandum No. 20, 2004-05. The New York State College Savings Program (529 Plan) is rated one of the best in America.
You have lots to think about and lots to do. We can assure you that the more you do, the more secure your future will be.
“Secure your future” is compiled and written by Mel Aaronson, Sandra March and Mona Romain, teacher-members of the NYC Teachers’ Retirement Board. For further information on items discussed, call your UFT borough office or the TRS. BRONX: 1-718-379-6200; BROOKLYN: 1-718-852-4900; MANHATTAN: 1-212-598-6800; QUEENS: 1-718-275-4400; STATEN ISLAND: 1-718-605-1400; Teachers’ Retirement System: 1-888-8NYC-TRS (692-877), www.trs.nyc.ny.us.