Teachers: Time your retirement

When it comes to retirement for teachers and school employees, a few months can have big impacts. Fully understanding how to time your retirement to maximize earnings, Cost-of-Living Adjustments (COLA) and your Public Employees Benefits Board (PEBB) retiree health insurance is important.

Basically, it comes down to two things:

  • The cost of your current employer-paid benefits versus the cost of retiree health insurance coverage during the last two months of your contract
  • When you want your COLA to start


Your monthly benefit will be adjusted on July 1 every year, starting the first full year after retirement. The COLA depends on the Seattle Consumer Price Index (CPI) percentage change, though the COLA is capped at 3% a year. If the CPI is higher than 3%, the additional COLA is banked and added to your benefit in future years when the CPI is less than 3%


Your employer-paid health insurance will end upon retirement. The PEBB program can provide you with new health insurance coverage, provided you meet qualifications and enroll no later than 60 days after your employer-paid, COBRA or continuation coverage ends. Under PEBB, you will still be responsible to pay the Health Care Authority (HCA) monthly for your health insurance costs.

July retirement

If you separate from employment and end your contract in June you can retire starting in July 2023:
You’ll receive your pension benefit plus your salary for July and August.
Your COLA will be applied starting on July 1, 2024.
Health insurance through SEBB program will end after June 30, 2023, and you will be responsible for your health insurance costs for July and August. However, if you’re eligible and meet PEBB’s procedural requirements, your retiree insurance coverage will start July 1, 2023.

September retirement

If you separate from employment and end your contract in August, you can retire starting in September 2023:
Your pension benefit will start in September.
The COLA won’t go into effect until July 2025, but the one you missed will be banked, or set aside. This means that your COLA in 2025 could be bigger than it would have been if you had chosen to retire in July 2023.
You’ll earn service credit for July and August unless you’re in TRS Plan 1
You’ll continue receiving SEBB program insurance coverage in July and August.

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