State Pension Planning in Austin: the rules, the tax, and the next step
State Pension Planning here is a state government and tech problem shaped by state-employee and tech-equity income landing in the same federal-tax year as IRA moves, with Texas homestead rules often misunderstood as IRA protection — not a national brochure.
State pension math is the system you are in — CalPERS is not ASRS
Each state retirement system has its own formula, COLA, survivor options, and (sometimes) a state-tax subtraction. California public pensions sit under Franchise Tax Board rules. Arizona has a limited public-pension subtraction (A.R.S. § 43-1022). Washington has no income tax on the pension check but still has a state estate tax. Do not copy a peer’s election from another system.
The irreversible piece is still the survivor form. The coordinating pieces are Social Security (if you have it), a 457 or 403(b), and healthcare in retirement. Run the surviving spouse’s monthly gap with and without the election before you sign.
The local stack this page is actually about
State-employee 401a or 457 income and tech-equity vesting land in the same federal year as IRA moves. MAGI jumps without a state income tax to blame. Texas homestead rules are often misunderstood as protecting the IRA or the brokerage. Employees Retirement System or similar public-pension subtractions, if any, have to be the actual statute — not a peer rumor from another state. A tech liquidity event deserves its own conversion pause, not a template rung copied from an energy bonus year. Checkable names on this page: Texas Medicaid, TX LIC. 2357269. For federal state pension planning, start from state government and tech and healthcare — state-employee and tech-equity income landing in the same federal-tax year as IRA moves, with Texas homestead rules often misunderstood as IRA protection — rather than a national template.
Industry mix and the planning load
Employees Retirement System and other state 401a or 457 plans, Dell and other tech equity, UT Austin or Seton / Ascension hospital 403b plans, and legislative-session or startup-liquidity years set the mix. A 457 distribution table is not an RSU vest. Homestead talk does not protect the brokerage account. state government and tech and healthcare are the two pay-and-savings stacks we actually see. Population context: about 980,000 residents (U.S. Census Bureau, ACS 2023 5-year estimates). The constraint we plan around is state-employee and tech-equity income landing in the same federal-tax year as IRA moves, with Texas homestead rules often misunderstood as IRA protection. Competition among advisors is high; that does not create a storefront and it does not change the statutes.
Survivor forms when the check came from state government and tech
Public and federal careers in state government and tech lock a survivor election at retirement. State-employee and tech-equity income landing in the same federal-tax year as IRA moves, with Texas homestead rules often misunderstood as IRA protection Term insurance that expires at 70 is not a substitute. Texas has no state estate tax or inheritance tax. Advisor and product density is high, so the scarce thing is a written recommendation that survives a second set of eyes — not another seminar.
TSP / 457 / system-specific subtractions next to healthcare
healthcare employees still have to coordinate Social Security, a 457 or TSP, and Texas Medicaid if a care stay is realistic. Texas has no state personal income tax. Copy a peer from another retirement system and you will get the math wrong.
What is different in Austin
ZIP codes 78701, 78745 is in the service area. Federal State Pension Planning work here is usually about state-employee and tech-equity income landing in the same federal-tax year as IRA moves, with Texas homestead rules often misunderstood as IRA protection — not a generic “retirement tips” article. Plan conversions against the federal bracket and IRMAA cliffs; treat Texas homestead and Medicaid rules as a separate, documented workstream. Advisor density is high, so the scarce thing is a written recommendation that survives a second set of eyes.
How Texas changes the numbers
Texas does not tax conversion income or IRA withdrawals.
The election you cannot undo
At retirement you choose a single-life or a joint-and-survivor form (and a percentage).
MRA + 10, 62, 65, and the supplement
Minimum retirement age plus 10 years of service, age 62, and Medicare at 65 are different cliffs.
Survivor benefit as an afterthought
Electing no survivor benefit because “we have life insurance” only works if the policy is permanent, the premium is guaranteed, and someone will actually keep it in force.
Care, Medicaid, and the long stay
Texas Medicaid long-term-care eligibility uses a five-year look-back.
How we actually work with you
Reduced Risk is a licensed service-area practice (TX LIC. 2357269). We work with Austin households by phone and secure video. There is no Austin branch office — and we will not invent one in schema or on the page.