The third week in October is National Save for Retirement Week. Congress began this effort in 2006 to raise awareness about the importance of retirement savings. By establishing a week annually, Congress wanted U.S. citizens to set aside time to think about personal retirement goals.

In that spirit, let’s review some of the retirement benefits you enjoy as a UFT member.

According to experts, retirees will need at least 80 percent of pre-retirement earnings plus high-quality health insurance for financial security. Thanks to the UFT and the New York City Municipal Labor Committee, which negotiates health benefits on behalf of all municipal employees, UFT members have this security. Our eligible members retire with a defined-benefit pension, administered through the Teachers’ Retirement System, and city-provided health insurance.

UFT members also may save money through a plan called the Tax-Deferred Annuity program. TDAs are available to members of the Teachers’ Retirement System and the Board of Education Retirement System.

With a TDA, a defined-benefit pension, health insurance and Social Security, our members enjoy a comfortable retirement as well as the knowledge that an expensive illness or debilitating condition will not wipe out their savings.

TDA: A great way to save

The Tax-Deferred Annuity program is a savings plan run by TRS. Since 1970, the TDA has been one of the most popular UFT benefits; more than 75 percent of in-service and retired members have a TDA.

A TDA enables you to save money while deferring federal income taxes on deposits and investment earnings. New York State and NYC residents may also defer their respective taxes. (Members who live in other states should consult with local tax experts about TDA rules.) Taxes are due when money is withdrawn.

Tax-deferred programs have strict rules and possible tax repercussions on withdrawals. If you are retired and age 55, you have penalty-free access to your TDA. If you are still on payroll as an in-service member, you have penalty-free access at age 59 ½.

Please note: Financial advisers recommend saving at least between six to eight months of living expenses in a non-volatile fund such as a money market fund. The TDA is not intended for this purpose.

Members may choose from among six investment funds, collectively called the Passport Funds. They are: the Fixed Return Fund; the Diversified Equity Fund; the Bond Fund; the International Equity Fund; the Inflation Protection Fund; and the Socially Responsive Fund. (For more information see Teacher Retirement System.)

Before you invest in these or any funds, here’s some advice: Never invest in anything you do not understand. That said, TRS carefully selects and monitors all the funds. While the Fixed Income Return guarantees a rate of return, the other funds do not and past performance does not predict future performance. Be sure to make choices based on your investment philosophy, i.e., your tolerance for risk and volatility in a fund.

The basics of investing in TDA

The Internal Revenue Service allows annual contributions of up to $18,000 for those under age 50 and up to $24,000 for those 50 or older.

Members with at least 15 years of qualifying service who have contributed an average of $5,000 or less per year to the TDA may contribute an additional $3,000 per year in “catch-up” contributions. Members may contribute up to $15,000 in catch-up contributions.

Members may contribute as little as 1 percent of salary. Members may change the rate of contribution at any time through a TRS Contribution Rate Change form.

For those who wish to save more than the maximum allowed through a TDA, check out the city’s Deferred Compensation 457 Plan or call 1-212-306-7760.

Information about investing in a TDA, is available on our website.