How Your TRS Pension Is Calculated, in Plain English

By Greg Stevens · 4 min read

Short answer: your TRS pension is 2.3% times your years of service, times the average of your highest five years of salary. Thirty years of service gets you 69% of that average, for life.

The formula

Here's how it works with example numbers:

• Years of service: 30
• Times 2.3%: 30 × 2.3% = 69%
• Times your average salary: 69% × $60,000 = $41,400 a year, about $3,450 a month

Most members use their five highest years of salary. Some longtime members who were grandfathered under older rules use their three highest years instead, which usually means a bigger check.

When you can retire with full benefits

You qualify for an unreduced pension at age 65 with at least five years of service, or when your age plus your years of service add up to 80 (the "Rule of 80"). Newer members also have a minimum age for the Rule of 80:

• Tier 1 (the longest-serving members): no minimum age
• Tier 2: at least age 60
• Tier 3 (joined or returned on or after September 1, 2014): at least age 62

You can retire earlier with a reduced pension, and that reduction is permanent. Before you pick a date, get an official estimate from TRS through your MyTRS account.

The one thing TRS doesn't do

Your TRS pension has no automatic cost-of-living increase. Raises happen only when the Texas Legislature approves one, and that's rare. So the $3,450 a month in our example stays $3,450, while prices keep climbing. At 3% inflation, it buys roughly a third less after 15 years.

That's the biggest gap in most teachers' retirement plans, and it's the job your 403(b), 457 and other savings are best suited for.

A decision you only get to make once

When you retire, you'll choose how TRS pays you: the standard annuity, which stops when you die, or an option that keeps paying a spouse or beneficiary after you're gone, for a smaller monthly check. That choice generally can't be changed later, so make it together with your spouse.

Sources: Teacher Retirement System of Texas, Texas Classroom Teachers Association. TRS rules depend on your tier and history; confirm your numbers with TRS at 800-223-8778.