Illinois Teachers Retirement

Last Updated on March 30, 2023 by George

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Illinois Teachers Retirement (TRS) is a safe retirement program that gives state educators many benefits and investment opportunities. The scheme aims to provide teachers who have committed their careers to promote students’ success and financial security so they can have a comfortable retirement.

TRS offers various investment options, competitive costs, flexible contribution and withdrawal regulations, and tax-exempt status for retirement savings. Employer-matched contributions are particularly advantageous for educators because they increase their capacity for long-term savings.

Teachers in Illinois are covered under the Illinois Teacher’s Retirement System (TRS). The most extensive public retirement system in the state, it was founded in 1939.

The defined benefit (DB) pension plan for teachers in Illinois follows a basic framework typical of other states. In contrast to other retirement plans, the value of the pension at retirement is not based on the contributions made by the teacher and those made on their behalf by the state or school district.

A teacher’s pension wealth is not derived from the results of those assets, even though those contributions are invested in the market and frequently managed by private equity and hedge funds. Instead, a formula based on their years of experience and ultimate compensation is used to decide it.

Who Qualifies for a Teacher Pension in Illinois?

Teachers, like most states, must serve a certain number of years before becoming eligible for a pension, and Illinois has a ten-year vesting period. While educators are qualified for assistance after ten years of service, the allowance may be worth little.

Furthermore, educators can only begin collecting it once they reach the state retirement age. The state establishes specific periods during which teachers can retire with benefits based on their age and years of experience. With ten years of service, new teachers in Illinois can retire with full benefits at the age of 67.

Furthermore, once educators reach the age of 55 and are no longer working, Illinois allows for early retirement. However, teachers who choose that option will have their benefits reduced based on their years of experience and how soon they retire.

How are Teacher Pensions Calculated in Illinois?

A formula is used to calculate pension wealth. The graph below depicts how an Illinois teacher pension is calculated. However, it is essential to note that the state calculates an educator’s final salary based on the average of their highest salary over the last eight years of their career. A teacher, for example, who has worked for 25 years and has a final average salary of $70,000 is eligible for an annual pension benefit equal to 55% of their final salary.

Calculating Teacher Pension Wealth in Illinois

2.2% Multiplier x Highest avg. salary during 8 consecutive years out of the final 10 x Years of service

How Much Does Illinois’s Teacher Pension Plan Cost?

Teachers and their employers must contribute to the plan as they work. The state legislature sets these contribution rates, which are subject to change yearly. Teachers contributed 9.81 percent of their salary to the pension fund in 2018, with the state contributing 30.86 percent. In total, 40.67 percent of teacher salaries in Illinois were spent on the state’s teacher pension fund. However, not all of that money is spent on benefits. While individual teachers contribute the full 9.81 percent of their salary for help, the state contributes only 8.27 percent. The remaining 22.59 percent of state contribution will repay the pension fund’s debt.

Finally, as in most states, teacher pensions in Illinois are not portable. If a teacher leaves Illinois TRS, they cannot take their benefits with them, even if they continue to teach. As a result, someone who quits teaching or moves across state lines may have two pensions, but the total value of those two pensions is likely to be less than if they stayed in one system throughout their career. In other words, the lack of benefit portability will harm any educator who quits teaching or moves across state lines to work in another state’s retirement system.

As with most state pension funds, Illinois’ teacher retirement system favors teachers who stay the longest while providing inadequate benefits to everyone else. With this in mind, new and current Illinois teachers should carefully consider their career goals and how they will interact with the state’s retirement plan.

Glossary of Financial Terms

Vesting period

The minimum number of years a teacher must work to be qualified for a pension. Although vesting periods vary by state, they typically last five years. Every state allows teachers who quit their positions before they are vested to withdraw their contributions, sometimes with interest. However, just a few jurisdictions permit these workers to receive any employer contributions made on their behalf.

Employee contribution

The proportion of a teacher’s annual income paid to the pension fund.

Employer contribution

The proportion of a teacher’s annual income that the state, a school district, or both contribute to the pension fund.

Average cost

The annual retirement benefit expense is expressed as a proportion of teacher pay, and these costs do not include debt.

Amortization cost

A pension fund’s annual payment toward any unfunded liabilities. This may also be considered the pension fund’s debt service expense.

Frequently Asked Questions

Are you an Illinois teacher looking for answers to common retirement questions? There is no need to look any further! Here are some of the most frequently asked retirement questions for Illinois teachers.

At what age can I retire from teaching without receiving a reduced pension annuity?

Teachers who have worked for an Illinois public school district for ten years or more can retire at 60 without receiving a discounted pension annuity.

How does my TRS benefit impact Social Security benefits?

Your TRS benefit may reduce your eligibility for Social Security benefits, and it is not true that an Illinois teacher is ineligible for Social Security benefits. If you already receive a TRS benefit, your Social Security benefit may be reduced or eliminated based on your earnings and other factors.

What are the requirements for TRS Tier 2 retirement?

To be eligible for TRS Tier 2 retirement, you must be at least 67 years old and have at least ten years of service credit with the Illinois Teachers’ Retirement System (TRS). In addition, for each year of service credit, you must have earned at least $1,000 in salary.

Pros & Cons


The Illinois Teachers’ Retirement System provides a secure retirement plan for the state’s educators. This system has advantages and disadvantages that should be considered before deciding whether or not to participate.

  • The Illinois Teachers’ Retirement System provides a secure retirement plan for the state’s educators. It is intended to provide a consistent income stream after retirement, allowing teachers to enjoy their golden years without fear of financial insecurity.
  • The system also includes an early retirement option, which allows teachers over the age of 55 who are no longer working to retire early and continue to receive benefits.
  • The system is well-funded, thanks to contributions from the state government and individual members. They will ensure that funds are preserved for future generations of teachers.


  • The Illinois Teachers’ Retirement System has stringent eligibility requirements that must be met to receive benefits. These requirements can be challenging to complete, primarily if a person has not taught for a long enough period or made enough contributions over time.
  • Members are also required to pay into the system throughout their careers, which can be difficult for those with lower salaries or other financial obligations.
  • Finally, because of the system’s size and complexity, it can be difficult for individuals to understand its details and how it works.

Final Thought- Illinois Teachers Retirement

The Illinois Teachers Retirement System is an excellent way for educators to plan for their retirement. Teachers can rest assured that their retirement will be taken care of, with the Board of Trustees approving a $6.04 billion state government contribution for the system in the fiscal year 2023. When educators reach the age of 55 and are no longer working, the system allows for early retirement with reduced benefits.

Furthermore, the Illinois Retired Teachers Association serves retired educators’ needs and interests by providing resources and support to help them adjust to life after teaching. With all these advantages, the Illinois Teachers Retirement System is an excellent choice for those seeking a comfortable retirement.

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