QUESTION ONE

Will you teach in a TRS school for more or less than 5 years?

The fact is many people get into teaching and their circumstances change. There are reasons to stay, and reasons to leave the profession, but because a significant percentage leave within 5 years, we need to address it upfront.

Vesting and contributions

Why is 5 years so important? Because that is the key point in time when your pension VESTS!

Vesting means you have earned enough service credit to qualify for a pension.

With many new teachers leaving with 5 years this is important to personal financial planning. Every year you work in a TRS institution you earn service credit. From every paycheck, a large amount of your earnings is deposited into a tax- preferred account. Tax-preferred means that you do not have to pay federal income tax on the money that goes in, or any interest earned on that money, until the money comes out. Your service credit is automatically added to your account.

  • You put in 7.7% of your paycheck
  • Your employer puts in 6.8% on top of that
  • Every August your account earns a 2% credit from the TRS fund

The key to all of this is that it happens automatically from the moment you work more than ½ time (20 hours/week) at a TRS institution.

Highcharts Example
Less Than 5 Years
More Than 5 Years