Investment returns are in for 2014, and the results are mixed. The U.S. equity markets continued to shine for the year. But some other markets had less impressive returns, as reflected in the annual returns of the Teachers’ Retirement System’s Passport Funds.

Investment in the Passport Funds is open to TRS members who participate in the voluntary Tax-Deferred Annuity program. The TDA is a very popular supplemental retirement program plan through which you can save additional money for your retirement on a tax-deferred basis. TDA participants may invest in any combination of the six Passport Funds. Some choose to invest mainly in stocks, or equities, which can be very volatile — as the investment results chart below shows. Other funds may be less volatile.

Once enrolled in the TDA, you should choose funds that follow an investment strategy you understand and that have a level of volatility with which you are comfortable. Many experts say that the younger you are, the more volatile your fund selection can be because you have more time to weather market fluctuations before retirement. As you grow older and have less time to stay in the market, you may wish to switch to less volatile investments.

The amount of your investment in any of the six Passport Funds can range between 5 percent and 100 percent of your total TDA contribution. The funds are:

• Fixed Return
• Diversified Equity
• Bond
• International Equity
• Inflation Protection
• Socially Responsive

Once you understand the goals of each fund, you can make your investment choices. Details can be found in the TRS publication “Passport Funds — Fund Profiles,” available on the TRS website. Use the links on the website’s left-side menu to learn more about these funds.

When to join the TDA?

The very best time to start is early in your career. The sooner you begin to invest in the TDA, the more your money will grow through what some call the magic of compound interest. Investing early gives you more time for your money to grow and increases the amount invested, which generates higher earnings.

Consider this example: Member A invests $100 a month or $1,200 a year beginning when she is 35. Assuming a fixed interest rate of 7 percent, her savings grow to $121,288 by the time she is 65. Member B starts earlier, at age 25, and also puts in $1,200 a year. She invests for only 10 years and then stops. but because she started earlier, her money had longer to grow, and when Member B is 65, she has savings of $135,044 — more than the savings of Member A.

Early in your career is best, but it is never too late to join the TDA. One really good time is right after you receive a salary increase. You can invest the raise (for example, the 2 percent increase under the new UFT contract) and possibly not see any change in your take-home pay.

TDA enrollment is quick and easy via the secure section of the TRS website. Additional information, including the TDA program summary, is available on the TRS website as well. You can also call the TRS at 1-888-869-2877 and ask for a TDA enrollment application.

You may contribute up to $18,000 of your income to the TDA in 2015 under the IRS’ recently announced contribution limits for the year. If you are age 50 or older, you can put in up to an additional $6,000, called “catch-up” contributions, for a total annual contribution limit of $24,000.

The TRS is one of the few public pension plans that provides members with two retirement plans: the mandatory, defined-benefit Qualified Pension Plan and the voluntary defined-contribution TDA program. Both the QPP and the TDA offer members convenient automatic payroll deductions and lower taxable income; both programs also allow for the designation of one or more beneficiaries.

No wonder the program, which is now 45 years old, is so popular. A total of 132,034 members participate in the TDA.

Important reminder

Please remember that if you are a paraprofessional, the Qualified Pension Plan is not mandatory — so you must file a TRS membership application to join.

If you are not yet appointed (if you are, for example, a per diem teacher, long-term substitute teacher or substitute paraprofessional) you may join the Board of Education Retirement System (BERS) by calling 1-718-935-5400 and asking for a BERS enrollment application. You are then eligible to join BERS’ TDA program as well. Once you become appointed, you will be eligible to join the TRS and then can have your time in service transferred to the TRS.

Taking loans from your TDA

One of the many benefits of participation in the TDA is the ability to take a loan against your TDA account. If you choose to maintain your TDA account after retirement (through what is known as TDA deferral status), you can also continue to pay off existing TDA loans or take new ones.

Previously, retirees had to repay their loans with direct monthly payments by check. But there is a new, convenient repayment method: automatic deductions. Now, loan payments can be deducted from a retiree’s monthly allowance, just the way they are deducted from an in-service member’s paychecks.

If you are a TDA participant and you are nearing retirement, consider electing TDA deferral status at retirement to maintain your TDA account. For more information about TDA loans or deferral status, visit the TRS website.