A 403(b) plan is tax-deferred retirement savings plan offered to public school employees through their school districts or open-enrollment charter schools. Like 401(k) plans in the private sector, employees can make contributions to 403(b) plans on a pre-tax basis. Employers direct these contributions to specific 403(b) investment products selected by each employee from among the options available in their district or charter school.
Experts estimate that you will need at least 70 to 90% of your pre-retirement income to maintain your standard of living in retirement. The average TRS pension benefit only replaces 69% of a member’s pre-retirement income, an amount unlikely to be enough to support a comfortable retirement. Participating in a 403(b) plan gives you a valuable opportunity to supplement your TRS pension with tax-advantaged savings. Contributing to a 403(b) plan as early as possible will allow you to earn as much as possible from compound interest, but it’s never too late to start.
