The rules
A TRS of Alabama retiree working for a TRS of Alabama or ERS employer keeps the full benefit only if (1) not employed in a permanent full-time capacity and (2) compensation in the calendar year does not exceed the earnings limit ($40,000 for 2026; indexed to CPI each year, rounded down to $1,000). Exceeding the limit suspends the benefit for the rest of the calendar year. In the retirement year the limit is prorated by months remaining (retired June 1: 7/12; retired Jan. 1: the full limit). Contract and staffing-company work count. Private employers and non-participating agencies: no limit. Must terminate employment for at least 30 days, with no prior agreement to return. Handbook p. 29, Postretirement Employment; Postretirement Employment Restrictions 2026 (10-2025); Ala. Code § 16-25-26(a)
Your first year
| Retired on | Months left | 2026 limit |
|---|---|---|
| January 1 | 12 | $40,000 |
| June 1 | 7 | $23,333.33 |
| July 1 | 6 | $20,000.00 |
How the limit has changed
- 2016: $30,000 Ala. Code § 16-25-26(a)
- 2019: $31,000 Tier 2 Handbook (2019) p. 20
- 2026: $40,000 Postretirement Employment Restrictions 2026 (10-2025)
Full-time work
Full-time employment with a TRS of Alabama employer suspends the benefit until the retiree leaves again. After two consecutive years the retiree may petition to rejoin TRS of Alabama (repaying contributions with interest) and later have the benefit recalculated. A TRS of Alabama retiree in an ERS-covered position must join ERS; the TRS of Alabama account is transferred. Handbook p. 30; Ala. Code § 16-25-14(k)
Act 2026-286: police, fire medics and bus drivers
Temporary exceptions through Dec. 31, 2032: APOST-certified retirees who were FLC members may work in listed law enforcement / fire medic roles earning up to $52,000 (with a minimum-service sliding scale from Jan. 1, 2027); TRS of Alabama or ERS retirees may work as permanent full-time school bus drivers within the regular earnings limit after drawing a benefit for 12 consecutive months (or if retired on or before Jan. 1, 2026). Effective June 1, 2026. Handbook p. 29; RSA 2026 New Acts email (June 10, 2026), item 2; Postretirement Employer Update Act 2026-286 (June 4, 2026)
Disability retirees
Disability retirees: the lesser of the regular limit or (average final salary - annual benefit) with a participating employer; (AFS - annual benefit) with others until age 60 (Tier 1) / 62 (Tier 2). Handbook p. 29, Disability Retiree
From the sources
- You can work for a TRS of Alabama or ERS employer after retiring and keep your full benefit if the job is not permanent full-time and you earn no more than the yearly limit: $40,000 for 2026. Going over stops your benefit for the rest of the year.Postretirement Employment Restrictions 2026 (10-2025); Handbook p. 29; Ala. Code § 16-25-26(a)
- In your retirement year the limit is prorated: retire June 1 and you can earn 7/12 of the limit ($23,333.33 in 2026). Work for private employers has no limit.Postretirement Employment Restrictions 2026 (10-2025); Handbook p. 29
- You must be off the job for at least 30 days after retiring, with no prior agreement to come back.Postretirement Employment Restrictions 2026 (10-2025)
Questions
How much can I earn after retiring?
$40,000 in 2026 from TRS of Alabama or ERS employers, if you're not permanent full time. Private employers have no limit.
What if I go over?
Your benefit stops for the rest of that calendar year.
How long must I wait to go back?
At least 30 days after you stop work, with no agreement in advance to return.
Is the limit smaller in my first year?
Yes. It's prorated by the months left in the year after you retire.
Source: TRS Member Handbook, July 2026 edition (back cover "7-2026"), pp. 29, 30. Also: Postretirement Employment Restrictions 2026; Code of Alabama Title 16, Ch. 25 and 25A; Tier 2 Member Handbook; RSA 2026 New Acts email; Postretirement Employer Update Act 2026-286. Last reviewed .