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A Plan That Works for You
Get to know how the TCDRS plan benefits you.
PLAN SUMMARY
Watch Your Money Grow
Each participating county and district has its own retirement plan, and each employer decides the level of benefit it provides. That said, there are fundamentals that hold true for every TCDRS plan:
- Every time you get a paycheck, a certain percentage of your money is deposited in your TCDRS account. That money is tax deferred, so it reduces the income you have to pay taxes on.
- The money in your TCDRS account grows at an annual compound interest rate of 7%. TCDRS credits this interest to your account each month based on your account balance as of Jan. 1.
- The value of your account can increase a great deal due to compound interest (interest paid on your deposits and the interest you’ve already earned). At 7%, your money will approximately double every 10 years.
- Every year you’ll get a statement from TCDRS that lists all deposits for the year and the interest you have earned.
Example of How Compound Interest Works
| YEAR | JAN.1 BALANCE | DEPOSITS | 7% INTEREST | ENDING BALANCE |
|---|---|---|---|---|
| Year 1 | $0 | $2,000 | $0 | $2,000 |
| Year 2 | $2,000 | $2,000 | $140 | $4,140 |
| Year 3 | $4,140 | $2,000 | $289 | $6,429 |
Take a look at how compound interest helps your money grow in our Member Portal.
Naming a Beneficiary
The First Step
Naming a beneficiary ensures that TCDRS will distribute your money the way you wish. If you pass away before you retire, your beneficiary will receive your account balance and the interest it’s earned. If you have 4+ years of TCDRS service, your beneficiary has the additional option of receiving a lifetime monthly payment, which includes employer matching.
Eligibility & Vesting
Two Important Milestones
While eligibility might be considered the “finish line” on the road to retirement, vesting is an important milestone that means you’ve accrued enough service time to receive a lifetime monthly benefit once you’re eligible based on your employer requirements.
Service Time
Working Toward Retirement
Your service time determines whether your beneficiary is eligible for a Survivor Benefit. Current and prior service time (if you worked for your employer before it joined TCDRS), military time and a few additional avenues all count toward your total service time.
Account Portability
New Job?
You Have Options
Sometimes the road to retirement includes job changes. But you don’t have to withdraw your account just because you’re leaving your job. There are a lot of good reasons to leave your money in TCDRS.
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Your account continues to grow at 7% compound interest.
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Upon retirement eligibility, you will receive a lifetime monthly benefit.
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If you’ve completed four years of TCDRS service, you remain eligible for the Survivor Benefit.
Retirement planning
Understanding
Required Minimum Distributions
As you plan for retirement, it’s important to understand the IRS rules regarding Required Minimum Distributions (RMDs) from your TCDRS benefits. These rules determine when you need to start receiving your TCDRS benefits.
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