AERA was founded in 1955 with 557 members and was known as the Alabama Retired Teachers Association, Inc. The name was changed to the Alabama Education Retirees Association, Inc., (AERA) in 2003 to better represent its membership, which includes all levels of education. It was incorporated as an autonomous, not-for-profit organization and was approved by the Internal Revenue Service as a charitable organization in 1965. By 1982, AERA had purchased property in downtown Montgomery at 828 Washington Avenue, raised funds to build a new headquarters building, and occupied it by May of that year.

AERA is the retired division of the Alabama Education Association (AEA). It is made up of 81 local units, including 11 higher education units. These units are divided into nine districts. There is at least one local unit in each Alabama county. AERA works closely with NEA-Retired and is currently the third largest state retiree group in NEA-Retired. AERA is also a partner with the National Retired Teachers Association (NRTA), which is a division of AARP.

Each AERA district elects a district director who serves on the Board of Directors for a two-year term. Members also elect a state president and other state officers annually. The board employs an executive secretary that administers the activities of AERA within policies established by the board. In addition, three Area Coordinators are appointed by the executive secretary as part-time employees to provide assistance to the local units and to recruit new members. The executive secretary and a staff of three very capable full-time employees run the AERA State Office and serve over 25,000 members.