Most state and local workers in the United States receive retirement benefits, usually in the form of a pension. However, the quality of those benefits vary widely. Depending on your goals for retirement, your lifestyle, and healthcare needs, those benefits may or may not be enough. That’s why it’s important for public workers like teachers, firefighters, and municipal employees to understand how they work, what you can expect, and how you may be impacted by different laws and regulations.
In honor of April being Financial Literacy Month, we’ve put together a list of some of our best educational resources. We’ve crafted these tools to provide easy to understand information so you can retire with confidence.
Understanding how pensions work is complicated. Rules and formulas vary state to state so figuring out what you can expect can be confusing. Since many public workers in the US don’t get any education on how their retirement benefits work, so we created this series to help.
The pension formula is based on your working years, both how long you serve and what you earn. In this article we will explain how you can calculate or estimate the value of your future pension. We also have a calculator that you can use to estimate your future pension if you are in a pension plan currently accepting new members.
We analyzed public retirement plans across the U.S. to determine if plans are providing a path to a secure retirement for all public workers. These customizable scorecards can help you determine how well your retirement plan is working well for you.
The Retirement Security Report Teacher Edition analyzes the state of teacher retirement benefits in the United States. Importantly, this 4 part report details the best and worst teacher retirement plans in the US. It also highlights the most important elements of quality teacher retirement plan design and trends in the value of retirement benefits.
Retirees with a pension from state or local governments were made a promise: guaranteed income for the rest of their lives. But in a number of states, that doesn’t necessarily mean a financially secure retirement. If pension income doesn’t keep up with inflation, then it may not offer the security many workers need. Unfortunately, there isn’t universal cost-of-living adjustment coverage for retired teachers, firefighters, city workers, and other public workers with pensions. This article details which states offer cost-of-living adjustments and how they are determined.
What is the Windfall Elimination Provision and Government Pension Offset and will you and your family be affected?
If you’re a public worker, you may have heard of two rules that potential may cause your social security benefits to be reduced – the Windfall Elimination Provision and the Government Pension Offset. If you’ve ever been enrolled in social security, it’s important to know how your benefits may be impacted. Equable issued a comprehensive explainer to help public workers make sense of these rules and how they may be affected by them.
If you’re looking for a more interactive explainer, our partners at Teacher Retirement U recently launched a course on the WEP and GPO for teachers.
There are 12 states that have totally opted out of allowing state workers to collect both Social Security and a pension. And another 5 states have allowed local employers to choose whether or not they participate. We also have an article on social security coverage for teachers here.
Not all public employees are offered a pension. A guaranteed return plan is an alternative type of retirement benefit. It builds retirement income for participants by creating personal accounts for each employee, and centrally managing investments through a retirement system. The retirement system invests the moneyand guarantees that they’ll earn a minimum return. This article explains the ins and outs of these plans.
In a hybrid retirement plan, your employer provides access to two compatible benefit structures at the same time. A typical hybrid plan combines a small guaranteed income plan (like a pension) with a defined contribution plan. However, there are a range of ways in which these plans can be designed.
In a defined contribution plan, you and your employer each contribute a specified amount to your individual account. That money is then invested in one of several professionally designed and managed funds. Your retirement income will depend on the value of your investments upon retirement. The IRS typically refers defined contribution plans as 401(a), 403(b), or 457.
403b plan is the most common form of supplemental savings offered to teachers. Check out this article to understand how they work and how to determine if you should invest in one.
Take charge of your financial health and wellbeing by educating yourself with Equable’s financial education tools. Share these tools or this article with your public employee community and spread the literacy around.