We understand that everyone's financial situation is unique, and you should proceed however is best for your situation. But how do you know “what’s best for me?” Let’s look at some basic information that may help point you in the right direction.
First off, if you plan on leaving your current employer, that doesn't mean you need to refund your ASRS account. There are almost 700 ASRS employers, meaning it’s possible to get a job at a new employer and keep building your pension. (Note: contribution rates are set by the ASRS, not employers – the percentage withheld from your paycheck for ASRS contributions will remain consistent between employers.)
If you end up at an employer who is not part of the ASRS, you still have options. If you’re age 50 with at least five years of service, you may decide to take a reduced early retirement. (To get a better picture of where you stand, you can log into your secure myASRS account where you can estimate retirement options and refund amounts.)
Alternatively, you may decide to leave your money with the ASRS. You could still receive a monthly lifetime pension by leaving your money with the ASRS until you reach retirement eligibility. This also means you would still be eligible for health insurance coverage through the ASRS when you retire, and perhaps eligible for a premium benefit that would help lower monthly health insurance costs.
The most important thing: If you refund your ASRS account, have a clear understanding of your options and any related implications.
- Taxes may need to be withheld from your refund, depending upon how you decide to receive the money
- You may need to report your refund on your on taxes as income and pay the required income taxes at tax time
- Should you rejoin or start contributing to the ASRS again after you've refunded your account, you’ll have forfeited any previously earned service credit when you refunded. This also means not being grandfathered into any rule changes that may have occurred since you initially joined.
We sometimes see teachers requesting refunds at the end of each school year as a way to receive money for the summer. For some, this leads to being caught off guard at the end of their career when they believe they’ve reached retirement age yet don’t meet the eligibility criteria to retire, as they no longer have any substantial amount of accrued service.
So, if you’re asking yourself, “Should I refund my account?” make sure to do your due diligence. Visit the Refund page for additional information, analyze the information in your secure myASRS account, and if questions still remain, seek us out - our trained staff is here to help guide you to the best decision for you.
