Illinois TRS Retirement Calculator

How Illinois TRS calculates your benefit

Both tiers use the same core formula. The differences show up in the inputs, not the arithmetic.

Annual Benefit = 2.2% x Years of Creditable Service x Final Average Salary
Maximum: 75% of final average salary

Run the numbers on a concrete example. A Tier 1 teacher with 28 years of service and a $68,000 final average salary: 0.022 x 28 x $68,000 = $41,888 per year, which is $3,491 per month. That's 61.6% of their final average salary. The 75% cap arrives at 34 years.

The final average salary figure is where Tier 1 and Tier 2 diverge most immediately. Tier 1 uses the highest 4 consecutive years within the last 10. Tier 2 uses the highest 8 consecutive years within the last 10, which pulls the average down for anyone whose pay rose over time.

The Tier 2 salary cap

Tier 2 also limits the earnings that count. TRS applies the limit by school year: $127,283.01 for July 2025 through June 2026 and $129,192.26 for July 2026 through June 2027. It started at $106,800 in 2011 and rises each year by 3% or half of CPI-U, whichever is less. Bills to tie it to the Social Security wage base have been filed but haven't passed; confirm the current figure with TRS.

A Tier 2 teacher earning $150,000 counts only $129,192.26 for 2026-27. The other $20,808 doesn't enter the formula. At 30 years that's $13,733 a year less pension.

Tier 1 has a limit too, set by federal tax law (IRC 401(a)(17)) and far higher: $360,000 for 2026-27, up from $350,000 for 2025-26. It applies only to Tier 1 members who joined TRS after June 30, 1996. A Tier 1 administrator with a $400,000 final average and 30 years at 60 gets 66% of $360,000, or $237,600 a year, not $264,000.

Tier 1 vs Tier 2 retirement eligibility

The gap between the two tiers widens considerably when you look at when each can actually retire.

Tier 1 members have three paths to an unreduced benefit: age 60 with at least 10 years, age 62 with at least 5 years, or age 55 with at least 35 years. The 62-with-5 path covers people who taught only a few years in Illinois. Tier 1 also allows early retirement at age 55 with 20 or more years of service, with a 0.5% per month reduction for each month before age 60. That's 6% per year, or 30% off for someone retiring at 55 with exactly 20 years.

Tier 2 members wait until 67 for an unreduced benefit. That's seven years longer than Tier 1's standard retirement age. Early retirement is available at 62 with 10 or more years, with the same 0.5% per month reduction before 67. Someone retiring at 62 faces 60 months of reduction, or 30% off their calculated benefit.

A Tier 2 teacher who starts at 25 and teaches 35 years is 60 at the end. Collecting can't start until 62, at a 30% cut, and the full benefit waits until 67.

The Early Retirement Option (ERO) ended in 2016

Tier 1 members retiring between 55 and 60 used to be able to make a one-time payment, shared with their employer, to remove the under-60 reduction. That program, the Early Retirement Option, expired July 1, 2016 when the General Assembly didn't extend it. June 30, 2016 was the last day to retire under it. Anyone retiring before 60 with fewer than 35 years now takes the 0.5% monthly reduction, and this calculator applies it.

Active members paid 0.4% of creditable earnings into the ERO starting July 1, 2005. Because it expired, state law requires TRS to offer those contributions back. You can take an ERO sunset refund in cash (20% federal withholding), roll the taxable part to an IRA, 401(k) or 403(b), or leave it with TRS and apply later. There's no deadline, but money left with TRS earns no interest, and the choice can't be undone. Questions go to ERO-Refund@trsil.org.

COLA: the sharpest difference between tiers

Tier 1 gets its first increase on the January 1 after the later of your first retirement anniversary or turning 61. That first increase is 3% for each full year you've been retired, so someone who retired at 55 gets roughly 18% at once at 61. Every increase after that is 3% compounded. Retiring at 61 or later, 20 years of 3% compounding turns $3,500 a month into about $6,321.

Tier 2 gets the lesser of 3% or half of the CPI-U increase, figured on the original benefit, so nothing compounds. CPI-U up 4% means 2%. Up 2% means 1%. After 20 increases at 1.5%, a $3,000 benefit is $3,900.

Tier 2 increases start on the January 1 on or after the later of age 67 or your first retirement anniversary. Retire at 62 and you wait about five years for the first one.

The 75% cap: when extra years stop mattering

At 2.2% per year, 34 years gives 74.8%, and the law pays anyone at 74.6% or more the full 75%. Beyond 34 years, more service doesn't raise the pension.

If you're approaching 34 years, the financial calculus shifts. Years 35 and 36 add no pension benefit. The decision to continue teaching past the cap becomes about job satisfaction, healthcare continuity, and supplemental savings, not pension accumulation.

What this calculator doesn't model

Most Illinois TRS members aren't covered by Social Security for their teaching job. Before January 2025, the Windfall Elimination Provision (WEP) reduced Social Security for teachers who also had credits from covered jobs. Congress repealed WEP in the Social Security Fairness Act, signed January 5, 2025. If WEP previously reduced your Social Security benefit from non-teaching employment, contact SSA to confirm the updated amount.

The calculator also leaves out survivor benefits. Tier 2 survivors receive 66 2/3% of the retiree's annuity under the statute; Tier 1 survivor rules differ, so check them with TRS.