If someone asked you today what your monthly income will look like once you retire, would you know the answer? Many people have a general idea of what they have saved or what benefits they may receive, but they have not yet looked at how those different sources work together once a regular paycheck stops.

One way to think about retirement planning is like preparing for a harvest. What is available later depends in part on what was planted along the way, how much time it had to grow, and how the different pieces of the plan were structured.

For Texas educators, one of those pieces may be the Teacher Retirement System of Texas (TRS). Some may participate in the Optional Retirement Program (ORP) in lieu of TRS. And outside of education, employer-sponsored plans might include 401ks, SIMPLE IRAs, SEP IRAs, or traditional pension plans. Retirement income may also include other sources like Social Security, IRAs and Roth IRAs, and personal savings or investments.

The important question is not simply whether you have something growing. It is whether you understand what each source may provide and how the pieces fit together.

Looking Beyond Your Primary Retirement Benefit

For many educators, TRS or ORP becomes the foundation of retirement planning. But it is likely not the only retirement resource available, or necessary.

Many Texas school employees also have access to a voluntary 403(b) plan through their employer. Unlike TRS or ORP participation, which is required and often automatic, contributing to a 403(b) generally requires an employee to make an active decision to participate.

That means it’s easy for this part of the retirement garden to remain unseen and untouched. Benefits packets can be overwhelming, particularly when you are starting a new job and receiving a large amount of information at once. Years can pass before you recall that additional options are available.

A 403(b) can provide another way to save for retirement alongside an educator’s existing retirement benefits. And for people outside of education, accounts such as traditional or Roth IRAs may play a similar supplemental role.

Traditional or Roth: Understanding the Difference

Depending on the retirement plan available to you, you may have both traditional and Roth contribution options.

With a traditional 403(b), eligible contributions are generally made on a pre-tax basis, reducing taxable income in the year they are contributed. Distributions are generally subject to ordinary income taxes when withdrawn. It’s a “save now, pay later” tax strategy for your retirement money.

With a Roth 403(b), contributions are made with after-tax dollars. Qualified distributions in retirement can generally be taken free of federal income tax. This is a “pay now, save later” strategy for your retirement money – or as one client put it, “pre-pay my taxes.”

Neither option is automatically right for everyone. Current and expected future tax circumstances and other retirement income sources, as well as your time horizon and individual financial goals can all be relevant when deciding which type of account might be best for you.

For some people, having different types of retirement accounts can provide greater flexibility when deciding where retirement income will come from later. In other words, having planted various seeds along the way can provide you with more flexibility and choice when it comes time to harvest.

Starting Doesn’t Have to Mean Starting Big

One reason many people delay opening a voluntary retirement savings account is the belief that they cannot afford to make significant contributions. But remember that small seeds can lead to big harvests. Think of it as planting one seed at a time, rather than trying to plant an entire field at once.

A smaller contribution may be a practical starting point for someone who is balancing a mortgage, children, debt, everyday expenses, or other financial priorities. But those expenses will change and don’t have to been seen as a permanent barrier. You can start small and over time, your contributions can be reviewed and adjusted as your life circumstances change.

The larger lesson is to understand the role time can play. Starting a voluntary retirement account earlier gives your contributions more time to potentially benefit from compounding. Time is a powerful fertilizer in the retirement garden.

Find Out What Is Available to You

If you are still working, this may be a good time to take inventory of the retirement resources available through your employer.

For educators, a simple first step is contacting your HR or benefits department and asking what voluntary retirement plans are offered. Ask whether traditional and Roth options are available, and where you can find information about how to get started.

Then look at the retirement resources you already have. What might your TRS, ORP, Social Security, or other savings provide? Are there areas of your retirement plan that you have not considered yet?

Retirement planning is not about predicting exactly what the future will look like. It is about understanding the resources available to you today and making informed decisions about how you want to prepare for the years ahead.

The harvest may still be years away for you, but that means you may still have choices on what you plant now. While you are still in the growing season, consider asking a few questions so you have a better idea of what your retirement harvest might look like. Because the goal isn’t just a harvest. It’s a harvest worth celebrating – preferably with something better than kale chips.  

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