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Teacher Retirement System of Texas
Mind the gap.
Your TRS pension is the cornerstone of your retirement, but it will not replace 100 percent of your income. See how big the difference could be, and how to close it.
Retirement gap calculator
What will you actually take home?
Move the sliders. The math uses the standard TRS formula and the same assumptions as the example below; open “Fine-tune” to change them.
Your numbers
Fine-tune the assumptions
Plan to close the gap
Your monthly retirement gap
$2,317a month
Your take-home pay could fall by 44% when you retire on TRS alone.
- TRS annuity, per year
- $51,170
- Take-home, working
- $5,235
- Take-home, retired
- $2,918
- Nest egg to close it
- –
- 403(b) savings a month
- –
- Cost to your take-home
- –
Saving – a month for 15 years at a hypothetical 4% a year could fund the gap for 25 years, allowing for tax on withdrawals. Because 403(b) contributions come out before tax, your take-home pay drops by less than you save.
Ask John to check my numbersFor illustration only. Uses the TRS standard annuity formula (2.3% × years of service × average salary) with the assumptions shown, and ignores early-retirement reductions, cost-of-living changes and Social Security. Your actual benefit depends on your age, service credit, grandfathering and the payment plan you choose: see your TRS annual statement or trs.texas.gov. Hypothetical growth rates are not guarantees and do not reflect any specific product. 403(b) contributions are subject to IRS annual limits. Not tax advice.
Reality check
A potential 44% loss of spendable income.
This example shows an educator retiring with 32 years of service on a final salary of $75,900. The maximum TRS benefit was only 32% less than the final year’s gross pay, but once survivorship benefits and health care costs are considered, the drop is far deeper.
Your retirement “take-home pay” may be much less than you think.
| Line | Retired | Working |
|---|---|---|
| Years of service | 32 | |
| 5-year average income | $69,524 | |
| Percentage pay factor | 73.6% | |
| Gross annual income | $51,169 | $75,900 |
| Less 100% joint survivor benefit | −$5,270 | |
| Less health care (employer-subsidized while working) | −$4,000 | −$2,000 |
| Less taxes at 15% | −$6,884 | −$11,085 |
| Net annual income | $35,015 | $62,815 |
| Net monthly income | $2,917 | $5,234 |
Source: The Retirement Analysis Kit (TRAK) software by TrustBuilders, Inc., 2012 version. For illustrative purposes only.
Your retirement evaluation action plan
Four steps to close the gap.
Evaluate your take-home
Compare your retirement “take-home” pay from TRS with your final salary. The calculator above is a good start.
Find where the rest will come from
Determine which sources of income will make up the difference: savings, Social Security if you have it, a spouse’s plan.
Start automatic pre-tax savings
Your school’s 403(b) plan lets you save above and beyond your TRS benefit, straight from each paycheck, before tax. The earlier you start, the more time it has to grow.
Check in every year
Lifestyle changes happen. John can review your plan annually so your savings stay on track with your goals.
Retirement solutions designed with you in mind
Save for a better tomorrow.
Choose a flexible indexed annuity that can give you:
- Peace of mind knowing the funds will be there when you retire.
- A guaranteed² stream of income for life, without giving up control of your money. You keep control of your money at all times.³
- The opportunity to leave any balance in your annuity to your loved ones.
² Guarantees are dependent on the claims-paying ability of the issuing company. ³ Ask John about adding a guaranteed lifetime income rider (GLIR) to your policy.
Official information about your pension lives at the Teacher Retirement System of Texas. This page is not affiliated with or endorsed by TRS.