RETIREMENT SAVINGS NEW CHOICES & UPDATES
as of 12/11/25
You can now sign up for a Roth TDA Option through TRS. This may be a good option for you, or might not. I don’t know, it depends, and I’m not a financial adviser. I’m a special ed teacher at a gifted and talented school, who doesn’t teach math - so take everything I say with many grains of salt.
Currently, when you contribute to your Tax Deferred Annuity (our version of a 401k), your taxable income is lowered. If your official salary is 80k, but you put 10k into your TDA, then you are taxed as having a 70k salary, as opposed to the 80k one.
Consider the following: Teacher A is a NYC resident with an 80K salary and their after tax take home pay for the year is 59,228 dollars. Teacher B is a NYC resident with a 70K salary and their after tax take home pay is 53,051 dollars. Even though Teacher A makes $10,000 more dollars than Teacher B, there is only a difference of $6,177 in after tax income. So that means that if Teacher A decided to put $10,000 dollars into their TDA, lowering their taxable income to $70K, they would only feel like they were missing $6,177. There is an immediate tax savings of $3823 which otherwise would have gone to the government to fund wars and who knows what else (social security, new bike lanes)! Now that money is funding future you!
If Teacher A contributes $10,000 annually, and puts everything into the fixed 7% guaranteed fund, after ten years their account balance would have grown to 144,528 dollars, which is how they say, “not too bad!”
Of course, when Teacher A withdraws the money in retirement they will have to pay taxes on the money. The taxes owed have been deferred.
With the new ROTH option the money put in is not Tax Deferred. The IRS considers this after tax money, and so the big benefit is that when you take this money out in retirement you do not pay taxes on it. The downside is that you are subject to more taxes now.
Consider Teacher A with their 80K salary. They decide that they would like to contribute $10,000 annually to the new TRS ROTH OPTION. We already know their after tax take home pay is $59,228, and now when they contribute $10,000, they will only bring home $49,228, which is $3,823 less in take home pay than with the standard TDA. So let’s explore that:
If Teacher A in this new Roth scenario contributes $10,000 a year for ten years, and puts everything in the fixed 7% guaranteed fund, just like before, they would have $144,528 in their account. The big difference, and big benefit is that the $144,528 will not be taxed in retirement. Teacher A will get all that money, which is also how they say, “not too bad.”
For 2026, the maximum total combined contribution limits for a TDA or Roth option are $24,500, a $1,000 dollar increase over the current limits.
If you’re the type of person that’s all about contributing to the MAX, and you’re interested in both the regular Tax Deferred Account, you can split your contributions. For example, you could contribute $12,000 in the TDA, and $12,500 in the ROTH option.
You cannot contribute $24,500 to the regular TDA, and then contribute additional money to the ROTH Option. That $24,500 is the total amount that you can contribute, regardless of whether it’s pre-tax, or post tax.
457 Plans
Not exactly an exception, and not really a caveat either, but for those retirement supersavers, you do have one additional option and benefit that is not available to many others. As city workers, we are also entitled to contribute to a 457 plan. This is separate from Teachers Retirement System (TRS), but you are able to contribute an additional $24,500 to a 457 account which can be either pre-tax, or a post-tax Roth. 457 accounts would not have access to a guaranteed 7% return, but often times the stock market beats that rate anyway (though, not always, and not guaranteed).
So, for the person who doesn’t need money right now, they could put $24,500 into a TRS account (TDA or ROTH) annually, and another $24,500 into a 457 account (TDA or Roth) annually, and after 10 years, they would have $677,006 dollars saved assuming (and it is an assumption) that both accounts earned 7% annually, but stock market returns aren’t guaranteed, only our TDA fixed 7% is guaranteed.
Anyway, I hope this all makes sense. Chat GPT helped me out on calculations, so I guarantee nothing, but I hope this was at least a little helpful for some!
Remember, every little bit helps. It's okay to start with contributions as low as 3%, and then whenever you move up a salary step or get a raise, increase those amounts.
Links to sign up or change TRS contributions and funds below.
Links:
Enroll in COPE to help safeguard our pension and fix Tier 6! (recommended donation is $5 for teachers, $2.5 for Paras)