Active Members' Handbook
Transition to Retirement


Your First Payment

Due to the volume of retirement applications and the need to verify your service and salary, it may take nine to 12 months or more to complete the processing of your retirement application. During this period, you will receive a monthly payment that typically represents 95% or more of what your final benefit will be based on a three-year final average salary. These interim payments do not include any type of local retirement incentive or payments for unused leave accruals as those amounts are not reported until after your payments have begun. When your application is fully processed, an adjustment will be made to your monthly benefit, and any retroactive money owed you from your date of retirement will be paid. At that time, you will receive a detailed letter explaining your benefits.

Direct Deposit
Your retirement benefit is paid by direct deposit. On the last business day of each month your payment is automatically deposited into your savings or checking account. The dates of deposit are listed in Resource, our retiree newsletter, and on the Retirees page of our Web site.

Taxes and Your Retirement Benefit

Your NYSTRS retirement benefit is exempt from New York State income tax. However, it is subject to federal income tax. You may have taxes withheld from your monthly payments or you may make quarterly estimated tax payments. You can change your withholding at any time. Each January, you will be notified which portion of your retirement benefit must be reported for federal income tax purposes.

If you move to another state in retirement, your benefit will be subject to that state's tax laws. You can find information about other states' tax laws at www.1040.com.

Earnings in Retirement

Different guidelines apply to service and disability retirements. Make sure you are familiar with the requirements that apply to your situation before you begin working in retirement. If you have specific questions about your employment, call us at (800) 356-3128, Ext. 6150. If you work for a NYSTRS participating employer, provide the employer with your EmplID, regardless of your anticipated earnings. The pamphlet Working in Retirement explains earnings limits and their effect on your NYSTRS retirement benefit.

Service Retirement
If you receive a service retirement benefit, you can have unlimited earnings from the following types of employment:

  • Private;
  • Out-of-state;
  • Federal government;
  • Holding elected public office in New York State;
  • Working as a consultant for a public employer if your date of membership is prior to May 31, 1973. All contracts must be reviewed by NYSTRS before employment begins; or,
  • All employment (including New York State public service) beginning in the calendar year you turn 65.

Your earnings may be limited if you return to work for a New York State public employer. You will be subject to the rules of either Section 211 or 212 of the Retirement and Social Security Law.

  • Section 212 — You can earn a designated amount, as established by the state Legislature, each calendar year in public employment. Most of our under-65 retirees who work in public employment in retirement meet the provisions of this section of law. Visit the Retirees page of our Web site for the most current earnings limit.
  • Section 211 — You can exceed the Section 212 limit if your employer obtains approval from the agency that has jurisdiction over the employment (e.g., the NYS Department of Education for NYS public school teaching). Under Section 211, a retired public employee is prevented from working in the same or similar position for one year from the retiree's date of retirement from a NYS public retirement system.

    If you receive a 211 waiver, your earnings will be limited if you received pay from that employer in the two years prior to retirement and those salaries were used in your final average salary. Also, you cannot renounce earnings reported to the System in order to achieve unlimited earnings in retirement.

Exceeding the Section 212 or 211 earnings limit in public employment could result in the loss or suspension of your NYSTRS benefit.

If you joined the System on or after May 31, 1973 and you work either (1) as an independent consultant or (2) for a private firm to fill a position with a NYS public school or other NYS public employer, you will be subject to the earnings provisions of Section 212 and 211 of the Retirement and Social Security Law.

Suspending Your Service Retirement
If you have the opportunity in retirement to return to work full time for a participating employer in this System, you may suspend your retirement benefit and rejoin the System. You will be restored to active status and your date of membership will be the last day of your original tier. In general, you can receive an additional benefit after two extra years of service credit. (If you retired under Tier 3, you would become eligible after five extra years of service credit.) If you receive an additional benefit, you will lose any state retirement incentive service previously credited.

To be eligible for a recalculated benefit based on your service credit both before and after restoring your active status, you would need to a) complete at least five years of service credit after restoration, and b) repay the System the benefits you received before restoration, plus interest.

If you retire again without earning the minimum necessary additional service, your pension will resume at the original amount.

Disability Retirement

Tiers 1 and 2: You may earn in a calendar year the difference between your final average salary (or if greater, the salary you would have received if you had continued to teach) and your retirement benefit.

Tiers 3, 4 and 5: You must be totally and permanently disabled from all employment to qualify for and continue to receive a benefit. Employment of any type may jeopardize your disability retirement.

Cost-of-Living Adjustment (COLA)

Your retirement benefit will be subject to automatic cost-of-living adjustments when you meet the eligibility requirements. Eligible retirees receive an annual COLA that can be a minimum of 1% to a maximum of 3% on the first $18,000 of their retirement benefit. The percentage is determined by taking 50% of the Consumer Price Index (CPI) increase from one March to the next, and rounding up to the nearest tenth.

A surviving spouse with a lifetime survivor option will receive one-half the COLA the retired member would have received.

To be eligible for a COLA, you must either be:

  • At least age 62 and retired at least five years; or,
  • At least age 55 and retired at least 10 years; or,
  • A retiree receiving a NYSTRS disability benefit for at least five years (regardless of age); or,
  • A surviving spouse of an eligible retiree receiving a lifetime benefit. (By law, the spouse receives an increase equal to one-half the COLA the retiree would have received.)

Social Security and NYSTRS Benefits

For most of our retirees, NYSTRS benefits are not affected by Social Security benefits. Also, there is no Social Security tax on your System retirement benefit.

When you receive your Social Security statement each year, you should make sure your records are accurate so you will get all the benefits you are entitled to when you retire.

Retiree Publications

As a retiree, you will receive our newsletter Resource, published three times annually. You will also receive a Retired Member Profile each year. The Profile provides a snapshot of your (or your surviving lifetime income beneficiary's) retirement benefit and includes cost-of-living adjustment (COLA) information, gross and net payments, and deductions.

The Retired Members' Handbook, a comprehensive resource for retirees, is available on our Web site. New retirees receive the following publications: The Path to Retirement: Understanding the Retirement Process, a guide for new NYSTRS retirees that explains how the System processes retirement applications; Working in Retirement, a look at earnings limits and their effect on NYSTRS retirement benefits; and, Discovering Retirement, a guide to the opportunities and challenges new retirees face.