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When you begin teaching, retirement seems so far off that it hardly feels real. However, don’t let this stop you from planning for your future. Colleagues nearing retirement will likely tell you that time slips by, and maximizing your income in retirement becomes more difficult if you don’t start preparing early.
Over the next few years you might still be paying off student loans or acquiring new expenses such as a mortgage or starting a family, but a well-considered retirement plan can make a huge difference in your life after the classroom.
STEPS YOU CAN TAKE NOW
1. Estimate your retirement income needs. The MyPension portal provided by the Alberta Teachers Retirement Fund (ATRF) contains tools that can help you contemplate your pension options and calculate estimates of your pension at various ages and service periods.
2. Learn about your pension. For most Alberta teachers, the largest source of retirement income is the pension they receive from the ATRF. This defined benefit pension is an important and valuable piece of your compensation, which is why Alberta teachers are fighting so hard to protect it.
3. Seek financial advice. Your needs—as an individual and as an Alberta teacher—are unique and you may have many questions:
- How much should I set aside annually for personal savings?
- How is my RRSP contribution limit affected by the pension adjustment?
- What is a pension adjustment?
What does it mean to have a defined benefit pension?
Your defined benefit pension is guaranteed based on a defined formula that protects you from wild fluctuations in the stock market. This is far more secure than a defined contribution pension, which is similar to an RRSP wherein the employee assumes all the investment risk. If you retire with 30 years of service, you could receive approximately 50 per cent of your preretirement income. Plus, every January, a cost-of-living adjustment equal to 70 per cent of the annual increase in the Alberta Consumer Price Index will be applied to your pension.
Why should I use the ATRF MyPension Portal?
On the ATRF MyPension portal, you can
- find current information about your pension savings,
- sign up a pension partner,
- change a beneficiary,
- see the cost of purchasing service and
- apply for your pension.
Visit mypension.atrf.com to register or sign in.
The ATA is here to help. Contact Teacher Employment Services if you have any questions and for information on presentations to locals on financial wellness.
Welcome to teaching, future retirees!
