Skip to main content
Full Menu Close Menu
New Teacher Articles

Never too soon to think about retirement income

New York Teacher

As a newer teacher, your retirement may feel like a long way off. But a defined-benefit pension, like the one UFT members enjoy, is a valuable and increasingly rare asset. When you retire, your pension plan guarantees a lifetime annuity of regular payments based on a formula that takes into account your years of service, your salary and your age. You’ll receive monthly retirement allowance payments for as long as you live.

As a certified, appointed teacher, you automatically become a member of the Teachers’ Retirement System (TRS), and a percentage of your pay (between 3% and 6%, depending on your salary) will be deducted from your check as a contribution to your Qualified Pension Plan (QPP). These contributions lower your taxable income.

Your pension benefit is “vested” after five years of service. Vesting means that after five years of teaching, you’ll have access to your pension benefits when you retire. As recently as 2022, the vesting requirement was 10 years of service for new employees, but the UFT and other unions successfully lobbied for legislation to reduce the time.

TRS members belong to one of five pension tiers. As a newer teacher, you’re most likely a member of Tier 6 (although you may be eligible to apply credit for previous service if you’ve worked as a substitute teacher or were an employee of another New York government agency). You are eligible to retire with full benefits at age 63, or with reduced benefits as early as age 55. Your retirement allowance will be based on your total service credit and your Final Average Salary (FAS), which is usually the highest average wages you earned during any continuous five-year period of employment.

Even though your paycheck deductions begin automatically, there are things you should do now on the TRS website to take full advantage of your membership in the pension system:

Designate beneficiaries. Your designated beneficiary with the Teachers’ Retirement System is entitled to your accumulated pension contributions with interest, any Tax-Deferred Annuity contributions and possibly a death benefit. It’s important to keep your beneficiary information up to date as your life situation changes (for example, as you get married and have children).

Enroll in the Tax-Deferred Annuity (TDA) program. It’s a good idea early in your career to start making voluntary contributions to a Tax-Deferred Annuity, which allows you to save additional money for your retirement. Taxes are deferred on your TDA contributions until you withdraw the money as income. You’ll choose one of six investment options offered by TRS: a Fixed Return Fund, which offers a guaranteed rate of return on your investments, or one of five variable funds. You can contribute between 1% and 20% of your salary to your TDA. If you choose to enroll in the TDA program, you’ll contribute to your TDA through payroll deductions — look for the “TRS TDA” code on your pay stub.

If you leave your position before you retire, you can choose to maintain your TRS membership. If you are vested, you’ll be able to access your retirement benefits once you meet age requirements. If you are not vested, your TRS membership will expire seven school years after you leave the system; in that case, you’ll need to withdraw your TRS funds. You may also be able to transfer your membership to another eligible retirement system in New York.

Related Topics: New Teachers