Navigating the NYS Teacher Retirement System
By Sarah Flick February 3, 2020 No Comments
*This article was originally posted in August of 2019 on syracuse.com.
While teachers everywhere are busily preparing for the new school year, some are taking the first steps toward navigating the New York State Teachers’ Retirement System (NYSTRS). However, this complex portion of their retirement planning can be difficult to understand and even trickier to tackle on their own.
To simplify the process, teachers should consider the advice of financial advisors who are certified by the National Education Association (NEA). Luckily for those in the Syracuse area, they can find NEA-certified retirement specialists at HighPoint Advisors, LLC.
“We work one-on-one with teachers on understanding any NEA member benefits and how else they should be planning for retirement,” says Patrick Newton, financial advisor at HighPoint Advisors.
Established in 1921, the NYSTRS administers retirement and other benefits to all teachers and staff members employed at New York State public schools (outside of New York City), BOCES, and participating charter schools. The six tiers of membership are based on the date teachers begin their employment.
The benefits include more than a pension, but also the ability to borrow from member contributions, coverage for beneficiaries, and disability and death benefits as well. This is where it starts to get complicated, as different benefits depend on age, years of service and final average salary. In addition, there are different benefit calculations and eligibility requirements for each membership tier.
“Some can start collecting pension income at age 55, while some have to wait until age 63 – it depends on several factors,” Newton explains. “Meanwhile, disability benefits kick in once you reach 10 years of service, or five years for Tier 1.”
While all NYSTRS members receive a booklet that outlines their benefits, the information inside can be overwhelming, especially for teachers who are unsure of what to do. For this reason, AJ Loedel, Certified Financial Planner™ and HighPoint Advisors’ Managing Director, urges that now is the time for teachers to make sense of all the information that is so vital to their financial future.
“We can help them understand the booklet, navigate their options and use it as a planning tool for their ultimate retirement,” says Loedel. “It’s all a matter of understanding and maximizing your teacher benefits.”
A pension for a long career in education is certainly beneficial to a teacher’s retirement planning. However, teachers who think the NYSTRS is their end-all retirement plan are mistaken. “The pension alone is not sufficient to your retirement income goal – especially for the later tiers,” says Joseph Viviano, HighPoint Advisors financial advisor.
Not only does HighPoint Advisors help teachers grasp all the complex details of NYSTRS, but the firm also educates clients on their supplemental retirement plan options. From 403b and nonretirement savings to Roth Individual Retirement Accounts (IRAs), teachers can help ensure they have enough money to fund their entire retirement.
During every appointment, HighPoint’s NEA-certified retirement specialists use a formula to project a teacher’s pension amount. From there, supplemental retirement planning options are put into place. “These options shouldn’t be seen as backups – they are necessary supplements,” urges Newton. “You have to do it. The pension is not enough to retire on.”
Teachers have enough to worry about in the classroom. That’s why HighPoint Advisors specializes in the ins and outs of NYSTRS and comprehensive retirement planning for educators. That way, you can focus on your students and stop stressing about your financial future.
“There is so much you can maximize for yourself 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-certified 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.
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