Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

Ive heard about 401(k) plans and IRAs. What kind of plan is TRSL?

April 26, 2017heard IRAs k Plan plans trsl

0

Posted

Ive heard about 401(k) plans and IRAs. What kind of plan is TRSL?

1 Answer

0

Posted

401(k) plans and IRAs are defined contribution (DC) plans used by many private businesses to help employees save for retirement, in addition to Social Security benefits. Retirement benefits depend on the accumulated contributions in your personal account. In contrast, TRSL is a defined benefit (DB) plan. In DB plans, your guaranteed lifetime benefit is calculated using a formula defined by state law. As a DB plan, TRSL uses your age, years of service, and final average compensation (FAC) at retirement not the amount of your contributions to determine your monthly benefit. TRSL members generally do not contribute to Social Security and do not gain eligibility for Social Security old-age benefits.