Texas TRS and early retirement

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Topic Author
joetro29
Posts: 118
Joined: Sat Dec 05, 2015 11:10 pm

Texas TRS and early retirement

Post by joetro29 »

I’m in Texas TRS. Hoping in the future to make the rule of 80 and get pension at 62. But retire early at like 59 or 60 to begin to withdraw from my tax deferred govt 457. Can I retire earlier but not start collection pension till 62, or do I have to get when retire and then be subject to the early penalty?
JAusten
Posts: 7
Joined: Thu May 06, 2021 4:50 pm

Re: Texas TRS and early retirement

Post by JAusten »

I believe the best way to receive correct answers to your questions is to call the Teacher Retirement System of TX or TRS. I'm a retired TRS employee with a total of 41 years but situations are different. The correct answers will come from TRS.
simpleman357357
Posts: 5
Joined: Mon May 10, 2021 4:22 am

Re: Texas TRS and early retirement

Post by simpleman357357 »

I am with ers in Texas best to call trs or drive to Austin to get a direct answer. Dont take even your human resources person for advice. We had an officer retire 3 months early after hr told her she could retire she lost 500 a month.
tibbitts
Posts: 14285
Joined: Tue Feb 27, 2007 6:50 pm

Re: Texas TRS and early retirement

Post by tibbitts »

I'm not with TRS in TX, but my other-state TRS pension experience is that you should verify every answer multiple times by email, and request whatever written reports or confirmations you can. I did end up with incorrect/incomplete information about two aspects of my particular pension account, costing a couple of thousand dollar total, but of course that compounds over a lifetime. The information related to a very recently-changed provision. Often pension provisions apply to certain groups of employees but not others, so you really can't apply what someone else says about their pension to yours.
sawdust60
Posts: 353
Joined: Tue Jul 17, 2018 12:06 pm

Re: Texas TRS and early retirement

Post by sawdust60 »

The details can be found in the TRS Benefits Handbook

One reason for the confusion is that the 'Normal Age Retirement' changed for newer employees, so you have to figure out which 'Tier' you are in.

If you are in Tiers 1 or 2, once you meet the Rule of 80, there is no early retirement penalty. Every year you work increases your annuity, and brings you two years closer to retirement at full annuity (based on years of service formula). But make sure you have met Rule of 80 -- the way TRS calculates it.

For Tiers 3 or 4, there is a reduction in the annuity if not age 60.

For Tiers 5 or 6, there is a reduction in the annuity if not age 62.

Folks who were grandfathered in Tiers 1 or 2 might retire at age 55 with 25 years of service. At age 50 and 20 years of service, they would wait until age 60 to start retirement (60 + 20). Their annuity would be 20% less (20 vs. 25 years), and they would miss out on the higher annuity for the five years (55 to 60). And this doesn't consider the potential impact of higher salary for those years.

For the other tiers: Meet the rule of 80. Then start retirement at the specified age. Or, start retirement early; the annuity is less, but the reduction is because you receive it longer.

But do not rely on my understanding. Contact TRS. Read the handbook. See if you qualify to purchase service credits, and request the numbers. The payback period might make the purchase very attractive with higher annuity and earlier retirement.
Topic Author
joetro29
Posts: 118
Joined: Sat Dec 05, 2015 11:10 pm

Re: Texas TRS and early retirement

Post by joetro29 »

Turns out I can wait till 62 to claim but end work earlier. I think I will lose out on ability to buy an extra year with sick leave tho.
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