Party hats, toasts and noisemakers are usually part of New Year’s festivities … followed swiftly by resolutions. As you prepare to turn a page on the calendar, however, one of the smartest things teachers, coaches, administrators and maintenance staff members like you can do is review your finances — specifically your retirement plans.

No matter where you are in your career journey as a school employee, it's never too early to plan for retirement — or to check that your existing retirement blueprint is in alignment with your goals.

As the clock ticks toward that important life goal, let's look at four strategic ways you might tackle retirement planning in the year ahead.

1. Review where you are to get where you’re going

Preparing for your retirement isn’t something you can just set and forget. Things change and you need to be sure that your retirement plan stays on track. That’s why examining your retirement benefits annually — along with any other savings you’ve set aside for retirement — may prove important.

And, at the start of a new year, there’s no time like now to take that step. But to where does one turn for resources?

Of course, the Teacher Retirement System of Texas¹ (TRS) is the primary source of retirement benefit information for Texas educators and support staff. With broader economic issues like inflation impacting the cost of living, healthcare and more, it's critical to review your pension every year to see where you stand — and how to best supplement those benefits for the retirement you have in mind.

Any supplemental accounts you have should also be examined to see how they are performing. Whether you have a 403(b) or 457(b) plan, or other investment and savings accounts earmarked for retirement, an annual review can help determine whether you need to increase your contributions. And if you have not yet set up those plans, looking at your accounts could be the push you need to consider additional retirement savings strategies.

» Tip: A key element of this annual evaluation is having a clear idea of what you want your retirement to look like. Are you considering relocation? Do you want to spend time (and money) traveling? Do you want to stay active and perhaps work part-time? Understanding the type of retirement life you’d like helps determine the funds you need to make it happen. Sound daunting? A financial advisor can help!

2. Look for ways to increase your savings

You may already review your finances and spending habits on a regular basis, perhaps as part of your monthly budgeting or when you’re preparing to make a large purchase. But looking at your spending habits through the lens of retirement can offer a different perspective on what those finances mean to your future.

Odds are good that you don’t want to reach retirement wishing you had saved more. Alas, that happens to many people. One simple way to increase savings for retirement is to reduce expenditures. Look for ways to cut spending — then consider transitioning that money toward other options, such as individual retirement accounts (IRAs).

» Tip: There are limits on how much you can contribute each year to tax-advantaged retirement plans. Since school employees are already contributing to TRS and perhaps 403(b) plans through payroll deductions, note that an IRA outside of your employer has an annual limit² of $7,000, or up to $8,000 if you're over 50 years of age.

3. Reduce your debt

A big part of your monthly budget may be going toward recurring debt like credit cards. Car payments or a mortgage may also be on your plate. Before you start retirement, work to pay down the debt you have so that, down the road, your monthly pension benefits won’t wind up going toward your debt versus meeting your retirement needs.

A strategy to address your debt should be part of your overall financial strategy, of which your retirement is really only one piece. To tackle it, make a list of all your outstanding debts, including the interest rate you are paying. Many experts recommend that you pay off the higher interest debts first, making more than the minimum payment, if possible, on the road to becoming (at least mostly) debt-free.

» Tip: If student loans are a part of your debt, note that there are loan forgiveness programs to assist school employees in paying down or paying off their loans. Keeping those payments low — or even out of your budget — can give you more money to grow your savings.

4. Develop a customized retirement plan

While retirement planning is crucial, it's even more important that your intentions are based on your specific needs and wants. Your timeline — and the retirement options you have — should be based on your finances. It should also take into consideration economic issues that can impact your finances, such as inflation and taxes.

There are specific milestones in the retirement process you will need to meet, including working with a TRS benefits counselor, completing necessary forms and determining your final salary information so benefits can be calculated. Fortunately, the TRS website has an online guide³ that can assist you in putting your plan, timeline and checklist together.

» Tip: Keep in mind that taxes⁴ post-retirement may look different as you draw your income from pension benefits, investments and savings. You may also be collecting income from part-time employment. These special situations have different filing requirements, so it's a good idea to know this tax information as you move forward — and to talk with a tax professional if you have questions.

The value of talking with a financial advisor

As you probably know from experience, kids and teens don’t learn without asking questions — and neither do many school employees. When it comes to addressing your financial future, you don’t have to go it alone, either.

There are people who can answer your questions and provide the information you need to help you prepare for retirement. TRS is one source,⁵ of course, but retirement planning is about more than monitoring your pension.

Fortunately, the RBFCU Retirement Program is available to you from day one of your employment in Texas K-12 education. Our financial advisors would be happy to assist you as you develop your strategy. They can also answer questions about savings and investment opportunities that may help you make progress toward the retirement you have in mind.