Clear Creek and Friendswood ISD Teachers: Building Income Around a TRS Pension

If you teach or work for Clear Creek ISD, Friendswood ISD, Dickinson ISD, or another school district around the Bay Area, your retirement plan probably looks different from your neighbors'. Most of it rests on one thing: your Teacher Retirement System of Texas (TRS) pension. Understanding how that pension works, and where its gaps are, is the first step to a solid retirement plan.

This post explains the TRS basics and the options many educators use to fill the gaps. It's educational, not investment advice. Decisions about 403(b) and 457(b) investments are worth reviewing with your CPA or a licensed financial advisor.

How Your TRS Pension Is Calculated

You contribute 8.25% of your pay to TRS (plus a small TRS-Care contribution for retiree health coverage). In return, TRS pays a lifetime monthly pension based on a simple formula:

2.3% × your years of service × your average salary

For most members, the average salary is the average of your five highest-paid years. Some longtime "grandfathered" members use the three highest. Here's a simple example: 25 years of service × 2.3% = 57.5% of your average salary. If that average is $70,000, the standard pension would be about $40,250 a year, or roughly $3,350 a month.

When You Can Retire Depends on Your Tier

TRS has several tiers based on when you became a member, and each tier has its own retirement ages. Normal retirement is generally age 65 with at least five years of service, or meeting the "Rule of 80" (your age plus your years of service equal at least 80). Depending on your tier, the Rule of 80 may also require a minimum age, such as 60 or 62, for an unreduced pension. Retiring earlier is possible but reduces the benefit. Your annual TRS statement and the TRS website show your tier and your estimates.

Gap #1: Social Security May Be Smaller Than You Think

The vast majority of Texas school districts don't participate in Social Security. If your pay stub doesn't show Social Security (OASDI) being withheld, your school years aren't earning you Social Security credits. You may still have benefits from other jobs or through a spouse.

One important change: the Social Security Fairness Act, signed January 5, 2025, repealed the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Those rules used to reduce Social Security benefits for many people who also had a TRS pension. If you earned Social Security from other work, or you're eligible through a spouse, your TRS pension no longer reduces those benefits the way it once did. Check your Social Security statement at ssa.gov for current estimates.

Gap #2: No Automatic Cost-of-Living Increases

TRS pensions don't adjust automatically for inflation. Increases happen only when the Texas Legislature approves one. Over a 25- or 30-year retirement, rising prices can quietly shrink what your pension buys. Savings outside TRS give you a way to keep up.

Gap #3: Protecting Your Spouse

When you retire, you'll choose a payment option. The standard annuity pays the most each month but stops when you die. Joint and survivor options continue 50% to 100% of the payment to your beneficiary for their lifetime, in exchange for a smaller monthly check. Some educators compare the cost of a survivor option with the cost of life insurance that would provide for a spouse instead. That comparison only works if the insurance is affordable and secured before you elect, so it's worth looking at early.

Filling the Gaps: 403(b) and 457(b) Plans

Most districts offer a 403(b), and many also offer a 457(b). For 2026, you can contribute up to $24,500 to each plan, plus catch-up contributions of $8,000 if you're 50 or older (or $11,250 if you're 60 to 63 in each plan, in place of the standard catch-up). Two features are worth knowing:

• The 403(b) and 457(b) have separate limits, so an educator who can save more can use both.
• Money in a governmental 457(b) can generally be withdrawn after you leave your district without the 10% early withdrawal penalty, even before 59½. That can be useful for educators who retire early. Income taxes still apply.

Texas 403(b) plans offer products from many different companies, including mutual fund options, fixed annuities, and indexed annuities, with very different fees and features. TRS keeps a list of companies certified to offer 403(b) products to Texas public school employees. Compare fees carefully, and review investment choices with your CPA or a licensed financial advisor. Spreading savings across tax treatments can also help later, as explained in the three tax buckets.

Thank You for What You Do. Let's Make Sure Your Plan Works for You.

I'm based in League City and work with educators across Clear Creek, Friendswood, Dickinson, and the Bay Area. If you'd like help understanding your TRS options, comparing survivor choices, or seeing how guaranteed income can fill the gaps, I'm happy to walk through it with you after school hours. If you have 403(b) or 457(b) investment questions, those are worth reviewing with your CPA or financial advisor too. Sometimes the most useful outcome is simply confirming you're already on track.

Frequently Asked Questions

Do Texas teachers get Social Security?

Most Texas school districts don't participate in Social Security, so many teachers don't earn Social Security credits for their school years. You may still qualify through other jobs or a spouse. Since the Social Security Fairness Act took effect in 2025, a TRS pension no longer reduces those benefits through the WEP or GPO.

How is my TRS pension calculated?

The standard formula is 2.3% times your years of service times your average salary. For most members, that's the average of your five highest-paid years. Some grandfathered members use the three highest.

Can I contribute to both a 403(b) and a 457(b)?

Yes, if your district offers both. They have separate contribution limits. For 2026, the limit is $24,500 in each plan, plus catch-up contributions if you're 50 or older.

Prefer to keep reading first? Browse all of our tax-free retirement insights, or book your free strategy call whenever you're ready.