Tag Archives: estimate pension

10 Things All NYSLRS Members Should Know

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Brush up on your Retirement System knowledge! Here are 10 things all NYSLRS members should know.

10 Things All NYSLRS Members Should Know
  1. Lifetime Retirement Benefit
    You are part of a defined benefit pension plan, which provides a lifetime benefit at retirement based on your earnings and years of service.
  2. Qualify for a Retirement Benefit by Becoming Vested
    Becoming vested is a key milestone in every NYSLRS member’s career. Once you’re vested, you have earned enough service to qualify for a retirement benefit, once you meet the minimum age requirements established by your retirement plan.
  3. Tier Determines Benefits
    Your tier determines your eligibility for benefits under your plan and how those benefits are calculated.
  4. Conduct NYSLRS Business Using Retirement Online
    Retirement Online is the fastest and most convenient way to do business with NYSLRS. It only takes a few minutes to open your account. Use Retirement Online instead of calling or mailing for instant access to benefit information and convenient tools to make account changes.
  5. Estimate Pension Using Retirement Online Calculator
    Most members can use Retirement Online to create benefit estimates based on the most up-to-date information we have on file. You can enter different retirement dates and payment options to see how those choices would affect your benefit.
  6. Use Plan Publication to Learn about Benefits
    Your retirement plan publication is a comprehensive source for information about your benefits.
  7. Pension Calculated Using Highest Earnings
    Your final average earnings (FAE) is another major factor in calculating your NYSLRS pension. When we calculate your pension, we find the set of consecutive years (one, three or five, depending on your tier and retirement plan) when your earnings were highest. 
  8. Request Past Service Credit Before Retirement
    Service credit is one of the major factors in calculating your NYSLRS pension. You earn a year of service credit for each year of full-time employment with a participating employer. In some cases, you may also be able to request additional credit for past service.
  9. NYSLRS Membership Includes Death and Disability Benefits
    NYSLRS membership provides more than just retirement benefits. If you become seriously ill or injured, you may be eligible for a disability benefit. And, you may also be eligible to leave a beneficiary a death benefit if you die while working for a public employer.
  10. Best-Funded, Best-Managed
    The New York State Common Retirement Fund holds and invests the assets of NYSLRS on behalf of members, retirees and their beneficiaries and continues to be one of the best-funded and best-managed public pension funds in the nation. Comptroller Thomas P. DiNapoli is the administrative head of NYSLRS and trustee of the Common Retirement Fund.

NYSLRS is one of the largest public retirement systems in America, serving more than 1.2 million members, retirees and beneficiaries. Read A Look Inside NYSLRS to learn more about your retirement system.

Crunching the Numbers: A Short Guide to Retirement Calculators

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A good estimate of your post-retirement income is essential for effective retirement planning. But gauging your income can be tricky when it comes from multiple sources. Fortunately, there are a variety of online calculators that can help you get started.

online calculators for retirement planning

NYSLRS Benefit Calculator

Most NYSLRS members can quickly create a pension estimate using Retirement Online. Your estimate will be based on the most up-to-date account information we have on file for you. You can enter different retirement dates to see how those choices would affect your benefit and adjust your earnings or service credit if you anticipate a raise or plan to purchase past service.

Social Security Calculators

The Social Security Administration (SSA) hosts several calculators that you may find helpful. Their Quick Calculator uses information you enter to provide a rough Social Security benefit estimate. Their Retirement Estimator calculates your benefit based on your actual earnings. You’ll need to enter your Social Security number and other personal information to create an SSA account. 

You can also look up when you will be eligible for full Social Security benefits and estimate your life expectancy.

Savings Calculators

If you are saving for retirement, a simple savings calculator can give you an idea of how your money can grow over the years. However, simple calculators like this assume a fixed amount of savings each month. Most people increase their retirement savings as their income grows.

If you have a 457(b) plan like those offered by the New York State Deferred Compensation Plan, you can use their interactive retirement planner to project a hypothetical view of what your retirement may look like based on information you provide

Savings Withdrawal Calculators

Savings withdrawal calculators are designed to help determine how much savings remains after a series of withdrawals. These are especially helpful tools to use when trying to determine how long your retirement savings will last, based on a starting amount, how much you expect to withdraw, how often and some other factors.

How Much Do You Need?

Now that you’ve estimated your potential sources of retirement income, it’s important to understand your anticipated expenses in retirement. Our Income and Expenses Worksheet can help you create a post-retirement budget.

Think of retirement security as a three-legged stool, with your NYSLRS pension, social security benefit and retirement savings working together to provide financial stability. Your NYSLRS pension is a defined benefit, or traditional pension, that will provide you with a monthly payment for the rest of your life. Having a retirement savings account can give you more flexibility to do the things you want to do, or provide a source of cash in case of an emergency. Start saving for retirement if you haven’t already, or give your retirement savings a boost.

What to Consider When Choosing Your Retirement Date

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Before you pin down a retirement date, there are several factors you should consider.

Your Retirement Date

NYSLRS has made it a lot easier for you to determine the best time to retire. Most members can now use our online pension calculator to estimate what your benefit would be at different retirement dates and ages. Just sign in to your Retirement Online account and click the “Estimate my Pension” button to get started.

As of April 9, 2022, Tier 5 and 6 members only need five years of service credit to be vested. If you are a Tier 5 or 6 member with five or more years of service credit you can contact us to request a benefit estimate.

choosing your retirement date

Your Health

Your current health and long-term health prospects should be a factor in choosing your retirement date. If your health is poor, you may want to retire earlier to give yourself more time to enjoy retirement. On the other hand, if you anticipate significant out-of-pocket health costs, working longer might give you more time to save for those costs.

If you are in good health, your retirement may last longer than average. In most cases, staying on the job a little longer will increase your NYSLRS pension and provide an opportunity to build your savings.

Your Savings

It’s always a good idea for members to plan to supplement their NYSLRS pension and Social Security with savings. Retirement savings are a hedge against inflation, can help in an emergency and give you more freedom to do the things you want to do in retirement.

Having retirement savings gives you more flexibility and — if you have enough saved — may offset any penalty if you decide to retire early. On the other hand, if you have no savings or are short of what you’d like to have, working a little longer offers a chance to save more.

State employees and some municipal employees can take advantage of the New York State Deferred Compensation Plan. In 2022, you can save up to $20,500 per year in a Deferred Compensation account, under Internal Revenue Service rules. Starting in the year you turn 50, you can save an additional catch-up amount. The age 50-plus catch-up amount for 2022 is $6,500.

If you don’t work for New York State, check with your employer to see if you are eligible. If you are not eligible, your employer may be able to direct you to an alternative retirement savings program. (The Deferred Compensation Plan is not affiliated with NYSLRS.)

Your Current Job

The type of work you do is an important factor in determining when to retire. A physically demanding job can get even harder as you age.

But there are other things to consider about your current job. Some members want to retire as soon as they’re eligible to go. However, if your job gives you satisfaction and a sense of purpose, are you ready to walk away from it? Do you look forward to social interactions with your coworkers? Will you miss your job more than you enjoy being retired?

Your Plans for Retirement

Is retirement the end of something or the beginning of something new? Answering that question could go a long way toward determining your ideal retirement date. If you have dreams of starting your own business or going mountain climbing in Spain, you may not want to delay retirement.

On the other hand, if you don’t have a plan to fill the long hours of retirement, you risk becoming bored or depressed. For some, that risk is a reason to keep working. Whether you decide to retire earlier or later, having a plan for retirement can help make it a more satisfying experience.

Member Milestones for ERS Tier 3 and 4

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Knowing your member milestones can help you plan for your retirement. Most Employees’ Retirement System (ERS) Tier 3 and Tier 4 members (unless they are in special retirement plans) retire under the Article 15 retirement plan. If you’re covered by this retirement plan, you have a set of member milestones that affect how your pension is calculated and how much you’ll receive at retirement.

ERS Tier 3 and 4 member milestones

Here are some important Tier 3 and 4 milestones:

  • With ten years of service credit, you would be eligible to apply for a non-job-related disability benefit if you are permanently disabled and cannot perform your duties because of a physical or mental condition.
  • Also with ten years of service credit, your beneficiaries may be eligible for an out-of-service death benefit if you leave public employment and die before retirement.
  • With ten years of service credit, you are no longer able to withdraw your membership and receive a refund of your contributions if you leave public employment.
  • You are eligible to retire once you are age 55 and have five years of service credit. However, there would be reductions to your benefit if you retire before age 62 with less than 30 years of service credit.
  • You can retire with full benefits at age 62.
  • If you retire with less than 20 years of service credit, the benefit is 1.66 percent of your final average earnings (FAE) for each year of service.
  • If you retire with 20 to 30 years of service credit, the benefit is 2 percent of your FAE for each year of service.
  • If you retire with more than 30 years of service credit, the benefit is 2 percent of your FAE for each year of service up to 30. For each year of service beyond 30, you will receive 1.5 percent of your FAE.

Note: The law limits the final average earnings of all members who joined on or after June 17, 1971. For example, for most members, if your earnings increase significantly during the years used in your FAE, it’s possible that some of those earnings may not be used toward your pension. The specific limits vary by tier. Visit our Final Average Earnings page for more information.

The amount of your pension also depends on several factors, including your years of service credit and your age when you retire. Read our blog post, Tier 3 & 4 Members: When Is The Right Time To Retire?, for information to consider. You can also estimate your pension in Retirement Online and enter different retirement dates to see how those choices would affect your benefit.

Retirement Planning: Questions to Ask Yourself

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retirement planning - things to think aboutAfter months or years of retirement planning, you’re probably looking forward to the day when you apply for your NYSLRS pension. But before you retire, there are a few questions you should ask yourself. After all, by filing for retirement, you’re making critical decisions about your financial future. And once you’ve retired, some of those decisions will be irrevocable. Whether your planned retirement date is just around the corner or a few years off, asking these questions now could help you avoid costly mistakes.

Do I have all the service credit I think I have?

Under some retirement plans, service milestones (20 years, 30 years, reaching full retirement age) can have a big impact on the amount of your benefit. If you’re aiming for one of these milestones, but retire just short of reaching it, your pension will be less than you might be expecting. To make sure you have enough service credit on your planned retirement date, sign in to Retirement Online to check the most up-to-date estimate of your total service credit.

Do I have previous service credit I want to purchase?

You may be able to buy credit for previous public employment or military service, which in most cases would increase your pension.  

If you are planning to purchase service credit, including military service, you should do that as soon as possible, especially since you can’t purchase service credit after you retire. You can apply for additional credit in Retirement Online or by submitting a Request to Purchase Service Credit form (RS5042). You may also wish to read our publication Service Credit for Tier 2 Through 6.

Do I have a balance on a NYSLRS loan?

If you have an outstanding balance on a NYSLRS loan, you should pay it off before you retire. If you retire with an outstanding loan, your pension will be permanently reduced.

While Employees’ Retirement System members may repay their loan after retiring, they must pay back the full amount of the outstanding balance that was due at retirement in one lump-sum payment. Once the loan has been repaid, their pension benefit will be increased from that point going forward, but it will not be adjusted retroactively back to their date of retirement.

You can use your Retirement Online account to check your loan balance, make a lump-sum payment or increase your payment amount. For more information, visit our Loans page.

Retirement Planning Resources

The more you know about retirement and the retirement process, the better off you’ll be. Here are some resources that can help with your retirement planning:

Countdown to Retirement – 12 Months to Go

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The final months leading up to your retirement date go by quickly. When you are 12 months from your planned retirement date, you should consider your post-retirement finances. Putting together a good picture of your expected income and expenses should be a big part of your countdown to retirement.

Countdown to Retirement - 12 months To Go

Estimate Your Pension

Your NYSLRS pension is likely to be a major source of retirement income, but how much will you get? Most members can estimate their pension in Retirement Online.

A Retirement Online estimate is based on the account information we have on file for you. You can enter different retirement dates to see how an earlier or later date would affect your benefit.

If you are unable to use the online calculator, you can request a benefit projection by calling our toll-free number at 866-805-0990 or by submitting a Request for Estimate form. Also, most Tiers 2 through 6 members can use the Quick Calculator on the NYSLRS website. 

Review Other Retirement Income

One year out is a good time to take a closer look at other sources of retirement income. If you have an account with the New York Deferred Compensation Plan, review your latest statement. If you have an old 401(k) or IRA from another job, you should review those plans as well.

Social Security is a major source of income for most retirees. Although most NYSLRS members can retire as early as age 55, you cannot start collecting Social Security retirement benefits until age 62. Your Social Security benefits will be reduced permanently, however, if you retire before your full Social Security retirement age. You should still familiarize yourself with the program and estimate how much you’ll get. The Social Security Administration has several benefit calculators on its website to help you do that.

Review Your Health Insurance Coverage

NYSLRS doesn’t administer health insurance benefits, but health care can be a significant retirement expense you’ll need to plan for. Check with your employer’s health benefits administrator to determine what coverage you’re eligible for once you retire. Now is the time to research private health insurance plans if you’re not eligible for post-retirement coverage or if you need to supplement it.

If you are a New York State employee, you may want to review the Planning for Retirement guide from the Department of Civil Service.

If you’re close to age 65, learn more about Medicare benefits.

Make a Retirement Budget

How much will you spend each month after you retire? By preparing a post-retirement budget before you retire, you can set goals and establish guidelines that can help you stay on track throughout your retirement.

One of the best ways to plan for the future is to track what you spend now. For a more realistic budget, keep a record of your current spending for a month or two to get an idea of your expenses. Be sure to factor in periodic expenses, such as car insurance or property and school taxes.

To help you with your retirement budget, we’ve created monthly income and expense worksheets. These forms can help reveal your current spending habits and assist you in projecting your future needs.

Counting Down

Your planned retirement date will be here before you know it. If you missed it, you may wish to read our earlier Countdown to Retirement post. You’ll also want to keep an eye out for rest of this series for steps to take at four-to-six months and one-to-three months before your retirement date.

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

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Tier 3 and 4 members in the Article 15 retirement plan 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 your pension is guaranteed, the amount of your pension depends on several factors, including when you retire. Here is some information that can help you determine the right time to retire.

Three Reasons to Keep Working

  1. Tier 3 and 4 members can claim their benefits as early as age 55, but they’ll face a significant penalty for early retirement – up to a 27 percent reduction in their pension. Early retirement reductions are prorated by month, so the penalty is reduced as you get closer to full retirement age. At 62, you can retire with full benefits. (Tier 3 and 4 Employees’ Retirement System (ERS) members who are in the Article 15 retirement plan and can retire between the ages of 55 and 62 without penalty once they have 30 years of service credit.)
  2. Your final average earnings (FAE) are a significant factor in the calculation of your pension benefit. Since working longer usually means a higher FAE, continued public employment can increase your pension.
  3. The other part of your retirement calculation is your service credit. More service credit can earn you a larger pension benefit, and, after 20 years, it also gets you a better pension formula. For Tier 3 and 4 members, if you retire with less than 20 years of service, the formula is FAE × 1.66% × years of service. Between 20 and 30 years, the formula becomes FAE × 2.00% × years of service. After 30 years of service, your pension benefit continues to increase at a rate of 1.5 percent of FAE for each year of service.

When is the Right Time to Retire infographic

 

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

Everyone’s situation is unique. For example, if you’re vested and no longer work for a public employer, and you don’t think you will again, taking your pension 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.

An Online Tool to Help You Make Your Decision

Most members can use Retirement Online to estimate their pensions.

A Retirement Online estimate is based on the most up-to-date information we have on file for you. You can enter different retirement dates to see how those choices would affect your benefit, which could help you determine the right time to retire. When you’re done, you can print your pension estimate or save it for future reference.

If you are unable to use our online pension calculator, please contact us to request a pension estimate.

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