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I retired with a County plan within the NYS and Local Retirement System Tier IV:
50% of your highest grossing (including overtime) 36 consecutive month period of your 25 year career.
2% added for each year between 25-30 years of service, and 1.5% per year after 30 years, but you must be at least 55 years old upon your date of retirement to qualify for the added percentages.
When you retire, PERS will calculate your monthly benefit using the following formula: General service: 1.5 percent x years of retirement credit x final average salary. ... General Service Benefit Calculation Example (You can estimate your benefit using any number of years and any final average salary.)
Is your formula or your "best 3" based on your 40-hour pay, or does it factor in overtime?
(What I'm asking is, can you spike your pension?)
Most FERS employees don't get OT factored in their high 3, some do--particularly law enforcement and firefighters. I can count up to $22,500 of OT towards my high 3 average at today's current limit (50% of current OT earnings limit), I can't however count shift differential towards the high 3.
Most FERS employees don't get OT factored in their high 3, some do--particularly law enforcement and firefighters. I can count up to $22,500 of OT towards my high 3 average at today's current limit (50% of current OT earnings limit), I can't however count shift differential towards the high 3.
If everything goes the way you want it to, what can someone who regularly participates in OT expect to have his pension pay out? (Assuming maxing it out annually)
If someone stays on after the full retirement milestone for another 5 or 10 years, can you theoretically make more in retirement than you did while on payroll?
Tier 4 TRS NY: I will get 2% per year at three highest consecutive years. There are penalties before 30 years of service or age 62. The penalties are significant and subsequent tiers are less generous. I contributed 3% for ten years.
We don't have the most generous pension formula, but in my company you have people working 40-45 years until they are physically unable to come into work. You get addicted to the brotherhood of telephone workers and the adventure of call-outs, broken poles, and hanging cable.
We've had guys go into serious depression who retired before they were mentally ready.
If everything goes the way you want it to, what can someone who regularly participates in OT expect to have his pension pay out? (Assuming maxing it out annually)
If someone stays on after the full retirement milestone for another 5 or 10 years, can you theoretically make more in retirement than you did while on payroll?
No you'll never make more (on pension alone) than you did while on payroll. Law enforcement FERS has a mandatory retirement age of 57 too (with some exceptions)...so you are limited in how long you can stay. Also the first 20 years is @ 1.7% of the high 3 average, anything beyond that is 1%
If someone was hired straight out of college at 22 and stayed until the mandatory retirement age that'd be 35 years.
If we just used a hypothetical high 3 average of $125,000 that breaks down to:
$125K@ 1.7% X 20 years = $42,500
$125K @ 1% X 15 years = $18,750
Total pension of $61,250, which is less than half of the high 3 average
Regular FERS employees have no mandatory retirement age and can stay longer but they also would not ever approach their working salary on pension alone.
When you factor in TSP (gov 401K) and SS you should be able to come very close to your working earnings.
No you'll never make more (on pension alone) than you did while on payroll. Law enforcement FERS has a mandatory retirement age of 57 too (with some exceptions)...so you are limited in how long you can stay. Also the first 20 years is @ 1.7% of the high 3 average, anything beyond that is 1%
If someone was hired straight out of college at 22 and stayed until the mandatory retirement age that'd be 35 years.
If we just used a hypothetical high 3 average of $125,000 that breaks down to:
$125K@ 1.7% X 20 years = $42,500
$125K @ 1% X 15 years = $18,750
Total pension of $61,250, which is less than half of the high 3 average
Regular FERS employees have no mandatory retirement age and can stay longer but they also would not ever approach their working salary on pension alone.
When you factor in TSP (gov 401K) and SS you should be able to come very close to your working earnings.
That's good to know. I am just thinking that what a couple loses in mortgage, they will soon gain back in healthcare costs.
That's good to know. I am just thinking that what a couple loses in mortgage, they will soon gain back in healthcare costs.
You also have to factor that your pension, SS & 401K payouts no longer have SS withdrawn from your check (6.2% of your income) and since you are retired you can't contribute to the 401K anymore you now have what you normally invested as available income (up to $19,000 or $25,000 for age 50 & up currently--although it would be taxed now).
That's potentially freeing up to $33,200 ($8,200 SS + $25,000 401K) that you have available during retirement you didn't have during your working years. That isn't including whatever % of your pay you also contributed to your pension as well while working (which normally is a very small amount anyway). Conceivably your take home with pension, SS & 401K could exceed what you took home working--even though the total dollar amount may be lower.
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