The average American retiring at age 65 can expect to spend at least 18 years in retirement.  Experts now estimate that retirees will need anywhere from 60% to 80% of their pre-retirement income to live the life in retirement to which they have grown accustomed.  If you add it up, you will need lots of money to enjoy your retirement years.  The average retiree can expect Social Security to supply about 40% of their post-retirement income.  Employer-funded retirement plans generally provide about another 20%.  So, where will you get the rest of your retirement income?  The major source for additional income in retirement for most Americans is personal savings.

Members of the Board of Education Retirement System (BERS) who are employed in education service can save additional money for retirement by joining the Tax Deferred Annuity (TDA) Program.  The TDA Program is made available under section 403(b) of the Internal Revenue Code and provides an opportunity for BERS members to take advantage of this tax-sheltered retirement savings plan.  The TDA Program is completely voluntary and is meant to supplement your Social Security and Qualified Pension Plan retirement benefits.

Participation in the TDA Program does not affect your Social Security payments or your regular benefits under the Qualified Pension Plan, but it does reduce your current taxable income.  You determine the percentage of your salary you want deducted as a tax-deferred annuity contribution and how you want your contributions invested.  Your contribution percentage may be changed up to four times each year and must be within the maximum allowed under the Internal Revenue Code each year.  We encourage you to consider joining the TDA Program as a part of your overall retirement planning.

In order to join the TDA Program, you must be a member of BERS and an employee of the DOE. If you are on leave of absence without pay, no contributions may be made until you return to work.  You may join the TDA Program by filing a TDA Enrollment form with BERS at any time. Your participation will generally begin about 60 days after the date your enrollment is received by BERS.  Each fall, BERS has an enrollment mailing to encourage additional savings in this plan.  If eligible, you will receive an Enrollment Kit with all the necessary information and forms needed to join the program in the following year.

Please read about the TDA Features for more details on the BERS TDA Program and how it can help you save more for your retirement.

This information should not be considered legal or tax advice.  For such advice you should consult your own legal or tax advisor.

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