When can I legally retire in Texas? What to know about age, benefits
Retirement sounds simple until you actually try to figure out when you can stop working and how much money you’ll get.
In Texas, the answer isn’t always straightforward, especially if you’re counting on Social Security, a state pension, or both.
The age you choose could affect your monthly income for the rest of your life, and in some cases, working longer could mean more money in your pocket.
But the rules vary depending on your job, your benefits and when you decide to start claiming them.
If you’re trying to plan ahead or just want to understand your options, here’s what to know.
When can I legally retire in Texas?
There isn’t one set retirement age in Texas. Instead, it depends on what type of benefits you’re using and when you choose to start collecting them.
For Social Security, you can begin claiming benefits at age 62, but that comes with a permanent reduction in your monthly payment.
Full retirement age is 67 for people born in 1960 or later, according to the Social Security Administration. That means if you claim early, you’ll receive smaller checks for life compared to waiting.
State employees are typically covered by the Employees Retirement System of Texas, where many workers qualify for full benefits using the “Rule of 80,” meaning your age plus your years of service equals 80.
Some state employees may also qualify at age 60 with at least five years of service.
Teachers and school employees are typically covered by the Teacher Retirement System of Texas, where you can often qualify for full benefits at age 65 with at least five years of service, or earlier if you’ve worked long enough to meet service requirements, according to the Teacher Retirement System of Texas.
If you retire before meeting full eligibility under either system, you may still be able to leave the workforce, but your benefits could be reduced.
In most cases, you also need to be vested, meaning you’ve worked a minimum number of years, often between five and 10, before you can receive pension payments.
Do I get more money if I wait to retire or keep working?
Yes, waiting to retire or continuing to work can increase how much money you receive each month in most cases.
For Social Security, delaying benefits beyond your full retirement age increases your monthly payment through delayed retirement credits.
According to the Social Security Administration, benefits can grow by about 8% per year until age 70. After that point, there’s no additional increase, so waiting longer won’t boost your payment further.
Working longer can also raise your Social Security benefit.
The program calculates payments based on your highest-earning years, so if you continue working and earning more, those higher wages can replace lower-earning years in your record, which may increase your monthly check.
Can I work and still collect Social Security at the same time?
Yes, but If you start collecting Social Security before reaching full retirement age, your benefits could be temporarily reduced if your earnings go above a certain threshold.
Benefits are reduced by $1 for every $2 you earn above the annual limit before full retirement age, according to the Social Security Administration.
In the year you reach full retirement age, the reduction changes to $1 for every $3 above a higher limit.
Once you reach full retirement age, those limits go away, and you can work and earn as much as you want without reducing your Social Security benefits.
