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Indiana Retirement System


The state retirement system of Indiana comprises several different retirement plans to cover the wide range of public employees working on behalf of the state. As pension systems can be complex, you may value some extra assistance in understanding the Indiana retirement system. A financial advisor can help you properly prepare for retirement by taking all potential income streams into account and helping you invest in order to reach your long-term financial goals.

Types of Retirement Systems in Indiana

The Indiana Public Retirement System (INPRS) is among the largest pension funds in the country, providing several distinct pension funds for employees of the State of Indiana/ These funds are the Indiana State Teachers’ Retirement Fund, the Indiana Public Employees’ Retirement Fund, the 1977 Police Officers’ and Firefighters’ Retirement Fund, the Judges’ Retirement System, the Excise, Gaming and Conservation Officers’ Retirement Fund, the Prosecuting Attorneys’ Retirement Fund, the Legislators’ Defined Benefit Fund and the Legislators’ Defined Contribution Fund.

The benefits and retirement requirements that accompany these plans depend on what the position entails. These funds all operate separately to bring benefits and security to their workers. But they are all overseen by the umbrella organization of the INPRS board of trustees.

Indiana Retirement Systems

Plan TitleEligible Employees
Indiana Public Retirement System (INPRS)Umbrella system encompassing rest; all public employees are eligible to enroll and begin accruing benefits.
Indiana State Teachers’ Retirement FundTeachers and educators at all public Indiana K-12 schools within participating districts. This includes college professors and graduate employees of such institutions.
Indiana Public Employees’ Retirement FundAll public employees seeking state-mandated retirement benefits.
1977 Police Officers’ and Firefighters’ Retirement FundGeneral employees, firefighters, and police
officers serving in the participating cities, with general Indiana laws governing distinct eligibility and the Indiana State Legislature enacting local and private.
Judges’ Retirement SystemJudges and justices of the peace serving on the Indiana State Court and Court of Appeals.
Excise, Gaming and Conservation Officers’ Retirement FundSworn officers in the prescribed fields.
Prosecuting Attorneys’ Retirement FundAttorneys working on behalf of the prosecution in Indiana State Court.
Legislators’ Defined Benefit Fund; Legislators’ Defined Contribution FundSworn members of the state legislature.

Overview of Indiana’s Main Retirement Systems

Indiana Retirement System

Indiana State Teachers’ Retirement Fund: This is the designated Indiana retirement system for all teachers and professors at K-12 schools or “institutes of higher learning.” As public teaching here is a union-based employment scenario, this plan is limited to educators, excluding non-teaching faculty at such institutions.

Indiana Public Employees’ Retirement Fund: The largest retirement system in the state, the PERF covers by far the largest number of single employees. All state employees are eligible to enroll.

1977 Police Officers’ and Firefighters’ Retirement Fund: This program consists of city retirement plans from around Indiana state for firefighters and police officers serving in participating counties. This fund coordinates in conjunction with INPRS, meaning if you’re a member of one, you’re a member of the other.

Judges’ Retirement System: It’s mostly as simple as the name suggests. This is a plan for judiciary members and judges in Indiana state courts.

Legislative Defined Benefit and Contribution Funds: This provides supplemental benefits, in addition to all existing INPRS benefits, to all members of the Indiana Legislature and the President of the Senate, Lieutenant Governor.

Retirement Taxes in Indiana

There are two different types of taxes that you need to be aware of when retiring in the state of Indiana, federal and state taxes. Here is a breakdown of how you can prepare for those potential taxes while making your long-term retirement plan.


On a federal level, the money that you contribute to your pension plan does not get taxed, making it a tax-deferred account. On the other hand, you’ll pay taxes on any payments you take directly from your pension once you retire. Luckily, you will have the chance to decide whether you’d rather have these funds withheld from each pension check, or make estimated tax payments.

You can’t predict how much will be withheld from your income. Many moving parts may have an impact, but luckily, the government does those calculations for you. It will supply you with a refund (or charge the dividends) at the end of the year.

Retirement plans, like many of Indiana’s, include a rollover, which goes from your pension plan to a tax-deferred retirement account. Finally, if you instead have a Roth IRA, you’ll have to pay your taxes upfront. But many of your distributions in retirement will be tax-free.


As detailed in our thorough Indiana Retirement Tax Friendliness Guide, the state of Indiana is moderately tax-friendly toward its retirees. Indiana doesn’t tax Social Security. But it does fully tax retirement account withdrawals. Wages are taxed at standard rates, and the marginal state tax rate is 3.23%. Finally, public and private pension incomes are fully taxed.

Current Financial Health of the Indiana Retirement System

Indiana Retirement System

The Indiana Retirement System is booming, covering almost 507,000 total members. According to its annual report, in 2021, it contained $45.8 billion in net assets. Those are no small numbers and the fund paid out $3.4 billion in payments to members during the year while receiving $12.3 billion in contributions and income. Those numbers point to the Indiana retirement system being very financially healthy.

Tips for a Successful Retirement

  • Even with all the benefits of a state-set pension, retirement can nonetheless prove difficult to prepare for. Help from a financial advisor might be the best way to get your ducks in a row. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Creating a list of financial goals you’d like to meet before you reach retirement age is a great way to ensure that you’re not over-saving. This will make it easier to decide where you want to end up financially, which can make retirement more attainable.
  • Indiana does not levy an estate tax, but make sure to check out federal estate tax rules if your estate is worth enough.

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