What is the TDA or Tax Deferred Annuity Program?
The NYC DOE provides an optional retirement benefit for teachers called the TDA or Tax Deferred annuity program. The TDA program offers a tax-advantaged way to save for retirement as a qualified 403(b) plan.
How does the NYC DOE TDA Work?
The TDA is an optional benefit that you have to enroll in through the TRS Member Portal. Upon signing up you are able to make pre-tax contributions towards your retirement savings. The money you contribute to your TDA is not taxed until you withdraw it in retirement. This means you will pay less tax now and your investments will grow pre-tax allowing the power of compound interest to take effect.
The TDA is Good for NYC Teachers
The money you contribute to the TDA program is yours, unlike the pension. This means if you choose to leave the NYC DOE and teach in another area, state, or you leave the teaching profession, you control what happens to the money. The TDA is similar to how 401(k) plans work in the private sector. If you leave the DOE, you will have the option to roll the money over into another 403(b), an individual retirement account, or keep the money in your TDA if you meet the required minimums.
Additionally, the TDA helps teachers save more for retirement and enhance their income beyond what the pension will pay in retirement.
Get Started with the NYC DOE TDA Program
Start by signing up for the TDA program as soon as you can. Even if you are not able to contribute a lot, contributing something towards retirement is better than nothing. Then consider signing up for the Acquire Then Retire challenge that will help you increase your contribution amount over time.
Also, use the TDA calculator in the TRS portal to see how your paycheck is impacted at different percentages. You’ll notice that because you are contributing money before taxes your after-tax paycheck drops less than you’d think.
Read the Ultimate NYC Teacher Retirement Guide for more on the TDA, pension, and other benefits you receive as a member of the DOE.
Also, explore the NYC Teacher Salary Guide to learn how to increase your pay as quickly as possible.
