Tag Archives: Preparing to Retire

Too Much Free Time?

Could retirement bring you too much free time? When people think about retirement planning, they usually think about money. Will you have enough to maintain a comfortable lifestyle for a retirement that could last decades? But regardless of your finances, there is one thing you’re likely to have a lot more of after you retire: time. Figuring out how you’ll spend that time should also be part of your retirement planning process.

Free time after retirement

Counting the Hours

According to the U.S. Labor Department, the average American worker spends about nine hours a day at work. Add another hour a day commuting time, and that’s ten hours a day or 50 hours each week.

All those hours you spent working, and traveling to and from work, will instantly become free time. While that may sound great to many people, all that extra time can have downsides.

If not put to good use, that extra time can lead to boredom and even depression. What’s more, if you’re married and you and your spouse are both retired, you may find yourselves wondering how to spend that time together.

Make a Plan for Free Time

For many couples, having extra time together is a dream come true. However, some couples find themselves getting in each other’s way, and that can sometimes lead to problems.

But there are ways to cope. For example, finding activities outside the home, both together and separately, can help. As with most things, you’ll be better off if you recognize there may be a problem, discuss it with your spouse, and come up with a plan.

There are more thoughts on the subject, and some good advice, in this article: 10 Tips to Help Your Marriage Survive Retirement.

Certain Payment Options Provide a Lifetime Benefit for a Loved One

When you apply for a NYSLRS pension, you’ll be asked to pick a pension payment option. All payment options will provide you with a monthly benefit for the rest of your life. With the Single Life Allowance, all payments stop at your death and nothing is paid to a beneficiary.

Infographic describing pension payment options

Providing for a Beneficiary

If you’re married and need to provide for your spouse, or if you have someone else you would like to provide a lifetime pension for after you’re gone, there are payment options that let you do that. In exchange for a reduction in your monthly payment, Joint Allowance options allow a beneficiary to collect all or part of your pension after you die. The amount of the reduction in your pension is based on your life expectancy and the life expectancy of your beneficiary. That means the younger your beneficiary, the deeper the reduction.

You can only choose one beneficiary under a Joint Allowance option, and your beneficiary selection cannot be changed after you retire, regardless of the circumstances. The benefit reduction for Joint Allowance options will continue even if your beneficiary dies before you do.

Pop-Up Payment Options

If we could predict the future, pension choices would be a lot easier. But a Pop-Up payment option is one way to hedge your bets. Like Joint Allowance options, these plans allow you to provide a lifetime payment for a beneficiary after your death. But if your beneficiary dies before you, your future monthly payments would be increased to the amount you would have been receiving had you chosen the Single Life Allowance. (The pop-up only affects future payments. You would not be entitled to any retroactive payments.)

The monthly reduction in your benefit will be greater if you choose a Pop-Up option over a regular Joint Allowance.

Find Out More

There are also options that allow you to leave a monthly payment to more than one beneficiary, and options that leave a benefit for a certain amount of time. Visit our Payment Option Descriptions page for details about all of the available payment options.

For a better idea of how these payments options would work out for you and your beneficiary, you can use our online pension projection calculator. It uses the information you enter to show how much you could expect to receive under each option. Most members who are within five years of retirement eligibility can also request a benefit projection by contacting our Call Center at 1-866-805-0990 (press 2 for members, follow the prompts, then press 5 to request a benefit projection), or you can submit a Request for Estimate form (RS6030).

Retirement Age and Your NYSLRS Pension

For some NYSLRS members, your retirement age matters when it comes to receiving your NYSLRS retirement benefits.

Your pension will be based largely on your years of service and final average salary, but your age at retirement is also a factor. How age plays into the equation depends on your tier and retirement plan.

Members in regular retirement plans can retire as early as age 55, but they may face significant pension reductions if they retire before their full retirement age. The full retirement age for members in most tiers is 62, and it’s 63 for Employees’ Retirement System (ERS) Tier 6 members and for Police and Fire Retirement System (PFRS) Tier 6 members who leave public employment before retirement age, but have enough service to receive a pension. If you joined NYSLRS on or after April 1, 2012, you are in Tier 6.

retirement age

Benefit reductions are prorated by month. The closer you are to your full retirement age when you retire, the less the reduction will be. Here are some examples of how that would work.

  • ERS Tiers 2, 3 and 4, PFRS Tiers 2, 3 (Article 11), 5 and 6: If you retire at age 58 1/2, your pension will be permanently reduced by 16.5 percent.
  • ERS Tier 5: If you retire at age 58 1/2, your pension will be permanently reduced by 20.83 percent.
  • ERS Tier 6: If you retire at age 58 1/2, your pension will be permanently reduced by 29.5 percent.

Once you retire with a reduced benefit, the reduction is permanent — it does not end when you reach retirement age.

Retirement Age Exceptions

Tier 1 members can retire at 55 without a benefit reduction. Benefit reductions don’t apply to ERS Tier 2, 3 or 4 members if they retire with 30 years of service. Tier 5 Uniformed Court Officers and Peace Officers employed by the Unified Court System can also retire between 55 and 62 without penalty if they have 30 years of service.

More Information

Understanding how age affects your NYSLRS benefits is crucial to retirement planning. To learn more, please review your retirement plan booklet on our Publications page.


A Guide for Retirees

Our publication A Guide for Retirees is a valuable resource to read if you’re retired or planning to retire soon. This guide details the continuing benefits and services NYSLRS provides for its retirees.

What’s Inside A Guide for Retirees?

The first section of A Guide for Retirees outlines your benefits in clear, straightforward language. It provides an estimate of when to expect your first pension check, along with a couple reminders to help avert any delay in your payment. There’s also a brief description of how we calculate your benefit and information about what to do if you believe your benefit was calculated incorrectly.

Your NYSLRS retirement benefit will provide you with monthly payments for the rest of your life. But that doesn’t mean the amount of your pension won’t change. For example, your benefit will increase once you are eligible for a cost-of-living adjustment. Signing up for Medicare or getting a divorce can also change your benefit amount.

The booklet also describes benefits that your survivors may be eligible for, such as the post-retirement death benefit.

A Guide for Retirees

Services We Offer

A Guide for Retirees describes services NYSLRS provides for retirees, including:

  • Retirement Online. A fast and secure way to do business with NYSLRS.
  • Automated Information Line. You can call 24 hours a day, seven days a week to request a form, check your COLA eligibility, get general tax information and more.
  • Direct Deposit. Have your pension deposited directly into your bank account.
  • Pension Verification Letters. You can create your own in Retirement Online or we can send one at your request.
  • Individual Consultations. You can discuss your benefits with one of our information representatives in person or over the phone.

Your Obligations

Your benefits come with certain responsibilities. Most importantly, you need to let us know if your address changes. Even if you’re getting your pension through direct deposit, we need to have your correct address so we can send you tax documents and other important information.

This section also reminds you to keep your beneficiary information current, contact us if your check is lost or stolen, and review your withholding regularly.

Other Publications

Read our recent blog posts about other NYSLRS publications:

What Happens After You File
Your Retirement Application

The big day has finally come. You’ve submitted your retirement application, and you’re ready to start collecting your pension. Here’s what will happen next.

There are four documents we’ll need in addition to your retirement application. You can send them with your retirement application or after you apply:

retirement application

After we receive your application, we will send you a confirmation letter, which lists your retirement date and the forms we’ve received from you. If you don’t submit a W-4P, we’ll withhold federal taxes based on the status “married with three dependents.” (You can change your withholding at any time.)

If you haven’t received an estimate in the past 18 months, you don’t need to send an option election form with your retirement application. We’ll send you an estimate, along with an option election form, after we receive your retirement application.

Your First Payment

Your monthly payments will be based on the salary and service information we have on file.

We cannot send your first payment until we have proof of your date of birth. If you can, you should submit this document with your retirement application. (A copy of your New York driver’s license, birth certificate, passport or naturalization papers are acceptable proofs.) If you don’t have proof of date of birth available when you submit your retirement application, you can email us a photocopy by attaching it to our secure contact form.

We encourage you to sign up for direct deposit, so you’ll have safe and reliable access to your pension payments on the last business day of each month. Paper checks are mailed on the second to last business day of each month and may take longer to receive.

Possible Adjustments

If we receive additional payroll information from your employer, such as eligible lump sum payments, a retroactive pay increase or lagged regular earnings, we may need to adjust your pension payment. Because of the many variables that are often involved in verifying service and salary details with your former employer, finalizing your retirement benefit amount can take some time. The time this takes depends on the complexity of the circumstances. For example, if you worked for multiple public employers, it may take longer to pull together all your income information.

Once we have all the information we need, we’ll recalculate your pension amount. If your payment increases, you will receive a retroactive payment for the amount you are owed back to your date of retirement (the difference between your initial payments and your final retirement benefit amount).

For more information, please read our publication How Do I Prepare to Retire? and these recent blog posts:

Retroactive payments

Retroactive Payments and Your NYSLRS Pension

Retroactive Payments

Retroactive payments are lump sum payments you receive from your employer. These payments can be from new union contracts, arbitration awards or legal settlements that took place while you were on your employer’s payroll.

Your final average salary (FAS) is a major factor in your pension benefit calculation. Your FAS is the average of your three (five for Tier 6 members) highest consecutive years of earnings. For most people, their highest years of earnings come at the end of their careers.

If you receive a retroactive payment from your employer, it could affect your final average salary. Let’s look at how.

How Retroactive Payments Can Affect Your Benefit

When we calculate your FAS at retirement, retroactive payments are applied to the pay periods when they were earned, not when they were paid. In general, retroactive payments can increase your FAS as long as the time period in which you earned that money is part of the time period your FAS is based on.

Your employer should let us know if you receive a retroactive payment before or after you retire. If you are a State employee who receives a retroactive payment after you retire, we will recalculate your pension automatically; you do not need to notify us. If you receive a retroactive payment from a non-State employer after your pension calculation is finalized, send a letter to our Recalculation Unit in the Benefit Calculations & Disbursement Services Bureau. Please include a copy of your check stub and/or any correspondence you received from your employer. You may also email and upload this information to the Retirement System through our secure contact form.

For more information about FAS, read our Final Average Salary blog post. You can also find out specific information about your FAS by reading your retirement plan booklet, available on our Publications page.

Five and Ten Year Pension Payment Options

NYSLRS pension payment options are designed to fit your needs after you retire. Understanding these options will make it easier for you to choose the one that’s right for you.

While the basic option, the Single Life Allowance, would provide you with a monthly payment for the rest of your life, all payments would end at your death. Other options, in exchange for a reduced benefit, allow you to provide for a spouse or other loved one after you’re gone.

Five and Ten Year Certain options don’t provide a lifetime benefit for a beneficiary, but they have advantages you may want to consider.

pension payment options

How These Pension Payment Options Work

The Five Year Certain or Ten Year Certain options provide you with a reduced monthly benefit for your lifetime. If you die within the five- or ten-year period after your retirement, your beneficiary would receive pension payments for the remainder of the five or ten years. If you live beyond the five- or ten-year period, your beneficiary would not receive a pension benefit upon your death.

Let’s say you choose the Five Year option. If you die two years after retiring, your beneficiary will receive a benefit for three years. If you choose the Ten Year option, and die after two years, your beneficiary will get a benefit for eight years. In either case, your beneficiary would receive the same amount you were receiving, though they would not be eligible for any COLA increases.

Another feature of these plans is that you can change the beneficiary at any time within the five- or ten-year period.

Whatever your situation, you should review the payment options and choose carefully. Visit our Payment Option Descriptions page for details about all available pension payment options. For a better idea of how these payment options would work out for you and your beneficiary, try our online Benefit Calculator.

Countdown to Retirement — Final Three Months

Once you decide to retire and begin preparing, the final months leading up to your retirement date go by quickly. Previously, we discussed the steps to take when you’re four to six months away from retirement. As we wrap up our Countdown to Retirement, let’s take a look at what you should be doing in the final three months.

Final Three Months: Filing for Retirement

You need to file an Application for Service Retirement (RS6037) with us 15–90 days before your retirement date. You can download the form from our website or pick up a physical copy at one of our consultation sites. Make sure to fill out the application completely and have it notarized.

If you send the form by “Certified Mail — Return Receipt Requested,” we will consider your application filed on the date it was mailed. Please don’t give your application to your employer; send it directly to NYSLRS.

Next Steps

Once we receive your application, we’ll mail you a confirmation letter. If you’ve received an estimate from us within the past 18 months, we will include three forms with the letter:

  • Use the W-4P form to decide how much you want withheld from your pension benefit for federal taxes.
  • Use the Direct Deposit Enrollment Application (RS6370) to receive your pension benefit payments electronically, right in your bank account.
  • Use the option election form to choose how you want your pension benefit paid and whether you would like to leave a lifetime pension to a beneficiary when you die.

If you haven’t received an estimate, we will just send you the W-4P and Direct Deposit Enrollment Application forms. We will begin processing your estimate, and once it’s complete, we will send it to you along with an option election form.

final three months

Choosing Your Pension Payment Option

Select a payment option based on your most recent estimate. All of the options provide a monthly benefit for life, and some provide payments to a designated beneficiary when you die. You must file this form by the last day of the month in which you retire (unless otherwise notified).

Make Sure You’re Prepared

As your retirement date draws near, think about scheduling an appointment at one of our consultation sites. A consultation is not required, but our information representatives can answer any questions you have, help you complete the paperwork and notarize your retirement application. You can also contact us if you have questions.

Countdown to Retirement — Four to Six Months Out

Once you decide to retire and begin preparing, the final months leading up to your retirement date go by quickly. Previously, we discussed the steps to take when you’re eight months away from retirement. As we continue our Countdown to Retirement, let’s take a look at what you should be doing four to six months out.

Six Months: Post-Retirement Budget

At 18 months out, we suggested requesting a NYSLRS retirement estimate. You should have that estimate by now and, with it, a much better idea of what your retirement benefit could be. Now, you can prepare a post-retirement budget and make decisions about your goals and how you want to spend your money in retirement.

We offer worksheets to help you prepare a post-retirement budget on our website. For a more realistic budget, keep track 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 and taxes.

Countdown to Retirement: 4 to 6 months out

Four Months: Proof of Your Birth Date

We will need proof of your date of birth before we can pay you any benefits. You won’t need to send it in until you submit your retirement application, but now is a good time to make sure you have what you need. We’ll accept any of these documents as proof:

  • Birth certificate;
  • Baptismal certificate;
  • Certificate of Release or Discharge from Active Duty (DD-214);
  • New York State driver’s license issued on or after January 1, 2005;
  • Passport; or
  • Naturalization papers.

In most cases, a photocopy is acceptable. If you do send us the original, we will return it to you.

It’s a good idea to look for proof of your birth date sooner rather than later, in case you need to arrange to get a replacement. Also, if you’re thinking about choosing a pension payment option that provides a lifetime benefit to a beneficiary, we will need proof of your beneficiary’s birth date too.

Counting Down

Your planned retirement date is just a few months away. As you approach three months away from retirement, check back for the final post of our Countdown to Retirement series on filing your Application for Service Retirement (RS6037) and other forms. If you have any questions as you prepare for retirement, please contact us.

Countdown to Retirement — Eight Months Out

Once you decide to retire and begin preparing, the final months leading up to your retirement date go by quickly. Previously, we discussed the steps to take when you’re 12 months away from retirement. As we continue our Countdown to Retirement series, let’s take a look at what you should be doing eight months out.

Eight Months Out: Review Retirement Income

Some experts say that you need 80 percent of your pre-retirement income to maintain your standard of living once you stop working. There’s a good chance that your NYSLRS pension alone won’t provide that level of income. With retirement lasting 20 years, 25 years or even longer, it’s important to have a plan in place for the extra income you’ll need.

That’s why, at least eight months before your planned retirement date, you should start reviewing any other income you’ll have available. Some common sources include:

Check out our Straight Talk About Financial Planning for Your Retirement publication for monthly income and expense worksheets to help you assess your retirement finances.
Countdown to Retirement - Eight Months Out

Counting Down

Your planned retirement date is less than a year away. As the day gets closer, check out the rest of our Countdown to Retirement series for posts covering your retirement budget, what we accept as proof of your date of birth, what to do after you’ve filed your Application for Service Retirement (RS6037) and more.