Working After Retirement
If you return to work after service retirement and perform retired member activities, including substitute teaching, as an employee of a California public school system, an employee of a third party, or an independent contractor, there are restrictions.
- Work in a classified position except, under certain circumstances, as a teacher’s aide.
- Earn more than the annual postretirement earnings limit without affecting your CalSTRS retirement benefit.
- Earn any pay without affecting your retirement benefit if you return to work before the 180-calendar day separation-from-service requirement is met.
- Keep the additional service credit you received under the CalSTRS Retirement Incentive Program, if you return to work within five years of retirement with the employer that offered the incentive.
You can continue to receive your full CalSTRS service retirement benefit, with no earnings limitation, if you take a job outside of CalSTRS-covered employment, including work in:
- Private industry outside of the California public school system
- Private schools
- Public schools outside of California
- University of California or California State University system
If you are also a member of another public retirement system, that system’s earnings limitations may also apply.
Your retirement benefit will be reduced dollar for dollar by the amount that you earn in CalSTRS-covered employment during the first 180 calendar days following your most recent retirement effective date up to your benefit amount payable during that period. This requirement also applies to Cash Balance annuitants. See the Cash Balance Benefit Program Working After Retirement webpage for more information
There is a very narrow exemption if you meet all of the following:
- You have reached normal retirement age (age 60 for CalSTRS 2% at 60 members and age 62 for CalSTRS 2% at 62 members).
- Your appointment is necessary to fill a critically needed position.
- The governing body of your employer approved your appointment by resolution at a public meeting.
- You did not receive any financial inducement to retire.
- Your termination of service was not the cause of the need to acquire your services.
CalSTRS must receive the exemption request and required documentation from your employer before you can begin working. If approved, this exemption only applies to the separation-from-service requirement.
See the Exemption to the Separation-From-Service Requirement Employer Information Circular for more information.
Postretirement Earnings Limit
You can earn up to the annual postretirement earnings limit, without affecting your benefit, if you return to work after meeting the separation-from-service requirement and perform retired member activities as:
- An employee of a public school system
- An independent contractor
- An employee of a third party
The earnings limit for the 2018–19 school year is $45,022.
The earnings limit for the 2019–20 school year is $46,451.
The Teachers’ Retirement Board adjusts the earnings limit annually. Any amount you earn in a CalSTRS-covered position during the first 180 calendar days of retirement will also count against the annual postretirement earnings limit for the appropriate fiscal year.
If your earnings from CalSTRS-covered employment exceed the postretirement earnings limit, CalSTRS will withhold all of your gross monthly retirement benefit until we collect your excess earnings in full, up to the amount of your annual retirement benefit minus any previous reduction due to the zero-dollar earnings limit.
For example: If you return to CalSTRS-covered work in the 2018–19 school year after the first 180 days following retirement and earn $53,000, you will have exceeded the annual earnings limit of $45,022 by $7,978. If your annual retirement benefit is $7,978 or more, then CalSTRS will collect the entire $7,978 from your benefit payments for that year.
Reporting Your Earnings
If you are working postretirement, be sure to track your earnings.
Employers report retiree earnings to CalSTRS and have 45 days after the end of the pay period to submit the information to CalSTRS. We will send you two letters letting you know how close you are to the earnings limit.
If you exceed the earnings limit, we will send a letter informing you that excess earnings will be deducted from your retirement benefit.
Certain Third-Party Employees Excluded From Earnings Limit
If you work for a third-party employer that does not participate in a California public pension system, you may be excluded from the postretirement earnings limit and other postretirement employment requirements if the activities performed are not normally performed by employees of a CalSTRS employer and the activities are performed for 24 months or less.
Check with your employer to determine if you are subject to this exclusion.