Analysis Report
How Missouri Teachers Can Strengthen Their PSRS Pension with Compound Interest
If you're an educator in Missouri, the Public School Retirement System of Missouri (PSRS) forms the bedrock of your retirement security. But like most state pension systems, PSRS alone rarely replaces 100% of your pre-retirement income. Whether you teach in St. Louis, Kansas City, and Springfield, understanding how compound interest in a 403(b) can supplement your pension is one of the most important financial decisions of your career.
The Opportunity in Missouri: Missouri's lower cost of living means your PSRS pension stretches further than it would in coastal states — but don't let that breed complacency. Healthcare costs, travel, and helping family still add up quickly in retirement. A 403(b) supplement ensures you have flexibility beyond what PSRS provides.
Frequently Asked Questions5 questions
Is PSRS alone enough for retirement in Missouri?
For most Missouri teachers, PSRS replaces about 50–65% of final salary. Comfortable retirement typically requires 70–90%, so a 403(b) supplement closes that gap.
Are Missouri teachers covered by Social Security?
Generally NOT covered. This affects how much you should contribute to a 403(b) — uncovered teachers should generally save more.
Can I contribute to a 403(b) and an IRA?
Yes — they have separate limits ($23,000 for 403(b) and $7,000 for IRA in 2026, with catch-up amounts at 50+). Many teachers use both.
What happens to my 403(b) if I move out of state?
Your 403(b) is portable and yours regardless of where you live. You can roll it into an IRA when you separate from your district.
How does Missouri's 4.95% state tax affect my withdrawals?
Traditional 403(b) withdrawals are taxed as ordinary income in Missouri. Some states offer partial exemptions for retirement income — check current Missouri rules.