How Does Teacher Retirement Work in Washington State?

Teacher retirement in Washington State runs through the Teachers’ Retirement System (TRS), administered by the Department of Retirement Systems (DRS). When you’re hired into an eligible position, you have 90 days to choose between two plan structures: Plan 2, a traditional pension, or Plan 3, a hybrid that pairs a smaller pension with a personal investment account you control.¹ Your monthly income in retirement depends on which plan you picked, how long you taught, what you earned in your best years, and the survivor option you select at the end.

The Two Plans You Choose Between

Every teacher who enters TRS on or after July 1, 1996, picks between Plan 2 and Plan 3 within 90 days of starting work. The choice is irrevocable. Miss the window and you default into Plan 3.¹ A small number of educators hired before October 1977 remain in the closed Plan 1, but all current hiring flows into Plan 2 or Plan 3.

Plan 2 is a straightforward defined-benefit pension. You and your employer both contribute to a fund managed by the Washington State Investment Board, and the state guarantees you a monthly check for life based on a formula. You don’t pick investments. The formula does the work.

Plan 3 splits the risk. Your employer’s contributions fund a smaller guaranteed pension. Your own contributions go into an individual investment account that you direct. Your total retirement income is the pension plus whatever that account has grown to by the time you draw on it.²

What You and Your Employer Contribute

Plan 2 members contribute 7.54% of salary as of September 1, 2025, with the employer contributing a separate percentage set by the legislature.³ You make no investment decisions.

Plan 3 members pick one of six contribution rates for their personal account, ranging from a flat 5% to a flat 15%, with some options stepping up at ages 35 and 45.² Once you pick, your rate is locked in and can only change if you switch to a different Plan 3–covered employer. Higher rates early in a career have more years to compound.

For investing, Plan 3 offers one-step choices (target-date Retirement Strategy Funds or the WSIB Total Allocation Portfolio that mirrors the state pension fund) and a build-your-own menu. If you select nothing, your money goes into the target-date fund matching your age.²

When You Can Retire and Collect

Vesting is the point at which you’ve earned the right to a pension even if you leave teaching. Plan 2 members vest after five years of service credit.³ Plan 3 members vest in the employer-funded pension portion after ten years of service, or five years if at least 12 months were earned after age 44, or five years earned in TRS Plan 2 before July 1, 1996.² The money in a Plan 3 personal investment account is always yours; vesting only governs the pension side.

Full, unreduced retirement starts at age 65 for both plans. If you entered TRS before May 1, 2013, and have at least 30 years of service, you qualify for a full benefit at age 62 under the 2008 Early Retirement Factors (ERFs).³

Retiring earlier is possible but costly. With 30 or more years of service and 2008 ERF eligibility, you can go as early as age 55 with a reduction of roughly 2 to 3 percentage points per year below 62, landing at 80% of your full benefit at age 55.⁴ With fewer than 30 years, the standard factors are far steeper. A teacher retiring at 55 with 20 to 29 years of service would receive only about 36.5% of their full benefit, climbing back to roughly 90% by age 64. Run the numbers with DRS before leaving early.

How Your Monthly Pension Is Calculated

Both plans share the same core formula, with different multipliers.

Plan 2: 2% × service credit years × Average Final Compensation (AFC) = monthly benefit.¹ AFC is the average of your 60 highest consecutive earning months, essentially your best five-year stretch.³

Plan 3: the defined-benefit side uses a 1% multiplier instead of 2%, because you also have the personal investment account.¹

A teacher with 25 years of service and an AFC of $6,000 per month would get $3,000 per month under Plan 2 (0.02 × 25 × $6,000). Under Plan 3, the pension alone would be $1,500 per month (0.01 × 25 × $6,000), with the investment account on top. Whether Plan 3 ends up ahead depends on how much you contributed and how your account performed over your career.

Both plans receive an automatic cost-of-living adjustment each July, applied to the July 31 payment, provided you’ve been retired at least one year. For 2026, the COLA is 3.00% for members who retired before January 1, 2025, and 2.55% for those who retired between January 1 and July 1, 2025. Members who retired after July 1, 2025, get no COLA in 2026.⁵

Choosing a Survivor Option

When you apply for retirement, you pick one of four survivor options. The decision is usually permanent and it reshapes your monthly check.

Option 1 (Single Life) pays the highest monthly amount, with benefits ending at your death. If your contributions plus interest haven’t been paid out, the remainder goes to your beneficiary as a lump sum.
Option 2 (Joint and 100% Survivor) pays a reduced monthly amount for life, and your survivor receives the same amount for the rest of theirs.
Option 3 (Joint and 50% Survivor) pays slightly more than Option 2, and your survivor receives half your amount for life.
Option 4 (Joint and 66.67% Survivor) falls between Options 2 and 3, with your survivor receiving two-thirds for life.

On a $2,122 base pension, Option 1 pays the full $2,122, Option 2 drops to about $1,763, Option 3 pays about $1,926, and Option 4 pays about $1,869.² The larger the age gap between you and a younger survivor, the larger the reduction. Single retirees with no dependents usually choose Option 1; retirees supporting a spouse are buying survivor insurance through a permanently lower check.

How to Apply for Retirement

Start before your last day in the classroom. DRS recommends requesting an official benefit estimate through your online account 3 to 12 months before your intended retirement date, and typically provides it 5 to 8 weeks out. If it hasn’t arrived within 5 weeks, call DRS.⁶

File the retirement application at least five weeks before your intended retirement date, online or on paper. The online application only opens for members within one year of retirement who have already requested their official estimate.⁶

You’ll need bank account and routing numbers for direct deposit, and if you’re selecting Options 2, 3, or 4, a copy of your survivor’s ID showing date of birth.⁶ Verify your recorded service credit years in the DRS portal before filing; discrepancies are easier to fix now than later.

Your official retirement date is the first day of the month after your separation date, and your first pension payment typically arrives on the last business day of that month. Any missed payment caused by processing delays is paid retroactively.⁶

Social Security and Taxes

Washington teachers pay into Social Security alongside their TRS contributions, so you build Social Security credits throughout your career and can collect both your TRS pension and Social Security when eligible. The Social Security Fairness Act, signed on January 5, 2025, eliminated the Windfall Elimination Provision and Government Pension Offset, but because Washington teachers already paid Social Security taxes, most see no change from the repeal.⁷

Pension payments are subject to federal income tax, with DRS withholding based on your Form W-4P elections, which you can update any time. For 2026, the IRS updated Form W-4P to reflect new federal deductions under the One Big Beautiful Bill Act, including an option to elect no federal withholding.⁸ Washington has no state income tax, so your pension isn’t taxed at the state level.

Keeping Health Insurance After You Retire

The Public Employees Benefits Board (PEBB) offers retiree insurance, with eligibility that depends on your plan. Plan 2 members retiring on or after January 1, 2024, qualify if they’re at least age 55 with at least 20 years of service, even if they don’t immediately start drawing their pension. Plan 3 members qualify at age 55 with at least 10 years of service, also without needing to begin pension payments.⁹

The enrollment window is tight. PEBB must receive your retiree enrollment form within 60 days of your employer-paid coverage ending. Once Medicare-eligible, you must enroll in both Part A and Part B to keep PEBB retiree coverage.⁹ Premiums can be deducted from your monthly pension. Missing the 60-day deadline means losing access to PEBB retiree coverage permanently, so mark the date before your last day of work.

Going Back to Work After Retiring

Returning to the classroom as a substitute or part-time staffer is allowed, with real rules attached. You must wait at least 30 days after your official retirement date before returning to any DRS-covered employer, and you cannot have any pre-arranged agreement, written or verbal, to return to your previous employer before you retire. An informal deal with your principal before you file counts.¹⁰

Under a school district exception in effect through January 1, 2030, TRS retirees can work up to 1,040 hours per calendar year at a school district in a non-administrative position while continuing to collect their full pension. Non-administrative means the position doesn’t require administrative certification and doesn’t involve evaluating staff. Exceed 1,040 hours and your pension is suspended.¹⁰

All compensated hours count toward the 1,040 limit, including paid holidays, sick leave, and comp time taken during the work period. Sick leave or annual leave cashed out at the end of employment doesn’t count, but cashed-out comp time does.¹⁰

1
Department of Retirement Systems. Choosing Your Retirement Plan: Plan 2 or Plan 3
2
Washington State Department of Retirement Systems. TRS Plan 3
3
Washington State Department of Retirement Systems. TRS Plan 2
4
Legal Information Institute. Washington Administrative Code 415-02-325 – 2008 Early Retirement Factors
5
Department of Retirement Systems. Cost of Living Adjustment (COLA)
6
Washington State Department of Retirement Systems. Retiring
7
Social Security Administration. Social Security Fairness Act: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)
8
Internal Revenue Service. Publication 15-T: Federal Income Tax Withholding Methods
9
Washington State Health Care Authority. Retiring and PEBB Retiree Insurance
10
Washington State Department of Retirement Systems. Returning to Work