This article originally appeared on Syracuse.com on August 1st, 2019. Click here for the original article.
In the late summer as teachers across the country are getting ready for the new school year, some are taking the initial steps to try and make sense of the New York State Teachers’s Retirement System (NYSTRS). However, this multi-faceted part of their retirement planning can be hard to understand, and that puzzle is even harder to tackle on their own.
To make sense of the process, teachers and other school employees should consider the advice of financial advisors who are certified by the National Education Association (NEA). Luckily for those educators in the Syracuse area, HighPoint Advisors , LLC has retirement professionals ready to help.
“We work one-on-one with teachers to help them understand any NEA member benefits, as well as other areas crucial to their planning for retirement,” says Patrick Newton, financial advisor at HighPoint Advisors, LLC.
The NYSTRS was established in 1921 and administers retirement plans and other employer benefits to all teachers and staff members employed at New York State public schools (except for those in New York City), BOCES, and participating charter schools in the state. There are six tiers of membership, and those tiers are based on the date teachers begin their employment. (NYSTRS About Us, 2021)
The member benefits include more than just a pension. The ability to borrow from member contributions, Disability benefits, Death benefits, and coverage for beneficiaries are also part of the system. This is where things begin to get complicated. Various benefits depend on age, final average salary, and years of service, for example. Additionally, there are different benefit calculations and requirements for eligibility for each different membership tier.
“Some can start collecting pension income at age 55, while some have to wait until age 63 – it depends on numerous factors,” explains Newton. “Meanwhile, disability benefits are available once some reach 10 years of service, or five years for the Tier 1 members.”
Every NYSTRS member receives a member booklet that outlines their individual benefits, but that information can be overwhelming. For the many teachers who are unsure of what to do, this can feel insurmountable. For this reason, Adam (AJ) Loedel, Certified Financial Planner™ and HighPoint Advisors, LLC’s Managing Director, urges that the time is now for teachers to understand the factors that are so vital to their financial future.
“We can help them make sense of the booklet, help them evaluate their options and use it all to plan for their customized retirement,” says Loedel. “It comes down to understanding and maximizing your teacher benefits.”
A pension earned over a long career in education certainly goes a long way towards a teacher’s retirement planning. However, teachers who think the NYSTRS is all they need to plan for retirement are mistaken. “The pension alone is unlikely to be sufficient to fulfill your retirement income goal – especially for the more recent tiers,” says,” Joseph Viviano, HighPoint Advisors, LLC financial advisor.
Not only do the advisors at HighPoint Advisors, LLC help teachers grasp the intricate details of NYSTRS, they also educate their clients on their other supplemental retirement plan options. Most school districts sponsor 403(b) Plans, and all individuals can save in non-retirement accounts as well as Roth Individual Retirement Accounts (IRAs). Utilizing any of these vehicles can help teachers have more confidence that they have enough money to fund their entire retirement.
During appointments with educators, HighPoint’s retirement professionals can use a formula to project a teacher’s future pension amount. Above and beyond that, supplemental retirement planning options are then utilized. “These options shouldn’t be seen as backups – they are necessary supplements, Newton urges. “You have to do it. The pension is not enough to retire on.”
Teachers have plenty to worry about inside the classroom. That’s why the advisors of HighPoint Advisors, LLC specialize in the details of NYSTRS as a part of comprehensive retirement planning for educators. That way, teachers can focus on their students and feel confident about their financial future.
“There is so much you can optimize for yourself financially if you understand what’s available to you,” says Viviano. “At the end of the day, the only thing you can do wrong is to not ask for help.”
For more information on how an NEA financial advisor can help teachers plan their retirement, Contact HighPoint Advisors, LLC today.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Private Advisor Group, a registered investment advisor. Private Advisor Group and HighPoint Advisors, LLC are separate entities from LPL Financial.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being open for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.
References
NYSTRS About Us. (2021). Retrieved from NYSTRS : https://nystrs.org/About-Us/Who-We-Are