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.
You cannot:
- 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.
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.
- You did not receive any financial inducement to retire.
- Your termination of service was not the cause of the need to acquire your services.
For exemption requests submitted from July 1, 2024, through June 30, 2026, your employer must not have had reduction-in-force layoffs within the prior 18 months. Before July 1, 2024, and after June 30, 2026, different requirements apply.
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.
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
See the latest earnings limit.
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: The earnings limit for the 2024–25 school year is $74,733. If you return to CalSTRS-covered work in the 2024–25 school year after the first 180 days following retirement and earn $78,000, you will have exceeded the 2024–25 annual earnings limit of $74,733 by $3,267. If your annual retirement benefit is $3,267 or more, then CalSTRS will collect the entire $3,267 from your benefit payments for that year.
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.
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.
