Tier 3 & 4 Members: When Is The Right Time To Retire?

Tier 3 and 4 members qualify for retirement benefits after they’ve earned five years of credited service. Once you’re vested, you have a right to a NYSLRS retirement benefit — even if you leave public employment. Though guaranteed, the size of that benefit can vary.

Three Reasons to Keep Working

  1. Age 55 is the earliest that Tier 3 and 4 members can claim their benefits. However, unless you have 30 years of service, a significant penalty for such an early retirement is imposed — a 27-percent reduction. The longer you wait to retire, the greater your benefit will be. At age 62, you can retire with your full benefits.
  2. Your final average salary (FAS) is a significant factor in the calculation of your pension benefit. Since working longer usually means a higher FAS, continued public employment can increase your pension.
  3. The other part of your retirement calculation is your service credit. More service credit obviously earns you a larger pension benefit, but after 20 years, it also gets you a better pension formula. For Tier 3 and 4 members, the formula for the first 20 years is FAS × 1.66% × years of service; between 20 and 30 years, the formula becomes FAS × 2.00% × years of service.

When is the Right Time to Retire?

If You’re Not Working, Here’s Something to Consider

Everyone’s situation is unique. For example, if you’re vested, you no longer work for a public employer and you don’t think you will again, retiring at 55 might make sense. When you do the math, full benefits at age 62 will take 19 years to match the money you’d have received retiring at age 55 — even with the reduction.

Tools To Help Make Your Decision

Here are two ways to decide what makes sense for you:

  1. Our online retirement benefit calculator allows most members to estimate their benefit with different retirement dates, FAS and service credit totals. By changing each variable, you can see the impact it may have on your benefit.
  2. If you’re a Tier 3 or 4 member with five or more years of service credit, you can request an estimate based on your actual salary and service reported to date. If you’re age 50 or older, we can include additional, projected service credit based on a date of retirement up to five years in the future.

To request your estimate, contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area. You can also send us a Request for Estimate (RS6030) form.

This post has focused on Tier 3 and 4 members. To see how early retirement affects members in other tiers, visit our About Benefit Reductions page.

9 thoughts on “Tier 3 & 4 Members: When Is The Right Time To Retire?

  1. GW

    and yet sometimes if the organization wants you to retire early they make it difficult to work longer and they do – do it and it’s not up to the employee Sad but true- saw it happen too many times

    Reply
  2. Tom

    I have 30 yrs of service credit and will be 54 yoa in June.
    Will I be penalized if I quite my job and start collecting my retirement next year when I turn 55?

    Reply
    1. NYSLRS

      If you leave public service, you may apply for a retirement benefit at age 55. However, certain benefits could be affected if you don’t retire directly from the public payroll.

      Unfortunately, the NYSLRS Social Media team doesn’t have access to members’ account information. To get the account-specific information you need, please email our customer service representatives using our secure email form (http://www.emailNYSLRS.com). One of our representatives will review your account and get back to you. Filling out the secure form allows us to safely contact you about your personal account information. Please allow five to seven business days for a response.

      In addition, you may want to speak with New York State Civil Service or your employer’s health insurance benefit administrator for information about your health insurance benefits. (Please note: NYSLRS does not administer health insurance benefits for its members or retirees). If you participate in the New York State Deferred Compensation plan, you may also wish to speak with one of their representatives.

      Reply
  3. Patti Tifft

    At age 55 I will have 35 yrs of service. I understand there will NOT be a penalty for retiring at this age, other people which have retired at ages 58 or 60 indicated they have been informed if they were to continue to work another year or two, they gain an additional $500 to $800 dollars more a year and have been told by the person advising them it isn’t worth the additional years working for that amount of money. Is this truly the case? The additional years only adds maybe $500? If so, then I feel retiring at 55 is the answer since I could find a part time job and make that amount of money and enjoy more down time.

    Reply
    1. NYSLRS

      Benefits and reductions vary significantly by tier and plan. We have two ways to help you compare your specific pension benefits at age 55 versus 58 or 60:

      1. Our online retirement benefit calculator allows most members to estimate their benefit with different retirement dates, salary and service credit totals. By changing each variable, you’ll be able to see the impact it may have on your benefit.
      2. If you are over 50 years old, you can email us using our secure contact form (http://www.emailNYSLRS.com) to request benefit projections based on your salary and service reported to date. Benefit projections can also be requested through our automated phone line by calling 1-866-805-0990. To hear the member menu, press 3, then 1 for the Employees’ Retirement System or 2 for the Police and Fire Retirement System, and then press 4 for the benefit projector.
      Reply
  4. D. C.

    According to #3 above, for Tier 3 and 4 members, “the formula for the first 20 years is FAS × 1.66% × years of service; between 20 and 30 years, the formula becomes FAS × 2.00% × years of service”. How to understand the “first 20 years” here? If an employee has 30 years of service, the formula is “(FAS x 1.66% x 20) + (FAS x 2% x10)” OR “FAS x 2% x 30”? Please clarify. Thanks.

    Reply
    1. NYSLRS

      In this case, if a member has less than 20 years of service, the formula is:
      FAS x 1.66% x total years of service.

      If a member has 20 to 30 years of service, the formula is:
      FAS x 2% x total years of service.

      If a member has 30 or more years of service, the formula is:
      FAS x 2% x total years of service PLUS FAS x 1.5% X each year beyond 30 years.

      Reply
  5. Sue

    If I leave State service before 55 when I do file on my 55th birthday will my dad still be based on leaving with 30 days vac?

    Reply
    1. NYSLRS

      Actually, a recent blog post tackles filing for retirement.

      If you are a Tier 3, 4, 5, or ERS Tier 6 member, you are eligible for a benefit on your 55th birthday. You can submit your retirement application 15 to 90 days before you turn 55. If you are off payroll and you submit your application on or after your 55th birthday, your application will be effective immediately upon filing with this office.

      Assuming you’re a Tier 3 or 4 ERS member, your lump-sum vacation payout will still count towards your final average salary (FAS), even if you go off state payroll, as long as your FAS is based on your last three years of service. Learn more in the ERS Tier 3 and 4 retirement plan book.

      For more detailed, account-specific information, please email our customer service representatives using our secure email form. One of our representatives will review your account to address your questions. Filling out the secure form allows us to safely contact you about your personal account information. Please allow five to seven business days for a response.

      Reply

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