You’ve spent years educating and preparing students for their futures. Now, you’re thinking about the next step in your future...retirement.
Making sure you’re ready for retirement takes some preparation. This is especially important for Texas teachers who have entered education as a second career and may not have accumulated as many years of service credits as colleagues.
That’s why it’s important to familiarize yourself with the eligibility conditions the state of Texas requires for a teacher to retire with full benefits. Here’s what you need to know about retirement eligibility and how to calculate your benefits.
For example, if a teacher is 60 years old and has taught for 20 years, she meets the Rule of 80. However, if a teacher is 77, but has only taught for four years, she would not meet the requirement even though her age and years of service exceed the Rule of 80 criteria. That is because she hasn't met the five-year service credit minimum.
There are exceptions to the Rule of 80, however, as described below.
Even if you do not meet Rule of 80 provisions, that does not mean you will not qualify for full benefits. The key factor boils down to when you became a member of the TRS.
Teachers who became TRS members prior to Sept. 1, 2007, had at least five years of service credit on Aug. 31, 2014, and maintain membership until retirement must follow these eligibility requirements:
Age 65 with five or more years of service credit; or
Any combination of age and service totaling 80, with at least five years of service credit
Teachers who became members or returned to membership on or after Sept. 1, 2007, but prior to Sept. 1, 2014 had at least five years of service credit on Aug. 31, 2014, and maintain membership until retirement must follow these eligibility requirements:
Age 65 with five or more years of service credit, or
At least age 60, meets the Rule of 80 and have at least five years of service credit
If your tenure as a teacher does not apply to one of the above, but you:
First became a member or returned to membership on or after Sept. 1, 2014;
Had less than five years of service credit on Aug. 31, 2014; or
Had at least five years of service credit on Aug. 31, 2014, but ended a TRS membership on or after Sept. 1, 2014 and resumed membership at a later date,
Then the following requirements must be met to qualify for standard retirement:
Age 65 with five or more years of service credit, or
At least age 62, meet the Rule of 80 and have at least five years of service credit.
For those who are thinking of retiring early, TRS members can still receive a lesser retirement benefit. To qualify, teachers must be at least age 55 and have at least five years of service credit. However, their age and services are not required to add up to 80 to fulfill the Rule of 80 requirement.
A person who is younger than 55 may take a lesser benefit as well, but must have at least 30 years of service.
Click here for more information about annuity reductions and the criteria for qualifying for early retirement.
The Teacher Retirement System of Texas manages pension funds for public educators, as well as oversees the health insurance programs for active members and retirees.
Here’s how to calculate TRS pension benefits:
Multiply years of service credit by 2.3 percent.
Determine the average of your five highest years of salary.
Multiply the average from step 2 by the number from step 1. This would be your annual TRS standard annuity.
In addition to pension funds, teachers planning their retirement should be aware of health care coverage eligibility.
Retirees not eligible for Medicare: Teachers and dependents not eligible for Medicare are covered by the TRS-Care Standard plan. This plan offers health care coverage that includes:
Medical benefits that include no-cost preventive services
Freedom to choose a doctor in network, with no referral required
Prescription drug benefits
A telemedicine service that offers low-cost doctor visits by phone or computer, 24/7
Like most health care plans, participants pay an annual deductible for medical care and prescription drugs. Plan members also have a out-of-pocket maximum for the year. Monthly premiums vary based on the number of family members covered.
For more information on benefits for retirees not eligible for Medicare, click here.
Retirees eligible for Medicare: For retirees who are eligible for Medicare, the TRS-Care Medicare Advantage medical plan and TRS-Care Medicare Rx prescription drug plan offer health care coverage. Benefits include:
Everything that original Medicare covers, along with extras
Choosing any doctor who accepts Medicare
Special offers like wellness programs and free gym memberships through SilverSneakers
Prescription drug benefits
Participants pay an annual deductible for medical care, but do not need to meet the deductible to be eligible for prescription drug co-pays. Plan members also have an out-of-pocket maximum for the year. Monthly premiums vary based on the number of family members covered.
It’s also important to note that while Medicare allows seven months for enrollment, TRS-Care requires that you enroll in Medicare by the first day of your birth month. Waiting to enroll after you turn 65 will make you responsible for paying higher costs.
For more information on what steps to take before turning 65, click here.