Tag Archives: Planning

What to Consider When Choosing Your Retirement Date

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 their 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.

choosing your retirement date

Your Health

Your current health, and your long-term health prospects, should be a factor in selecting your retirement date. If your health is poor, you may want to consider retiring 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 your health is good, 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 increase your savings.

Your Savings

NYSLRS has always encouraged its members to save for retirement as a supplement to their NYSLRS pension and Social Security. Retirement savings are a hedge against inflation, can help in an emergency and allow you to do the things you want to do during retirement.

Having retirement savings gives you more flexibility, and if you have enough saved, that 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. 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.)

In 2020, you can save up to $19,500 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 2020 is $6,500, for a total limit of $26,000.

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 if you’re working in an office, that’s generally not the case.

But there are other things to consider about your current job. Some members want to retire as soon as they’re eligible to go, but 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 to 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.

But 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. But whether you decide to retire earlier or later, having a plan for retirement can help make it a more satisfying experience.

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.

Planning for an Unplanned Retirement

Retirement comes too soon for some people. Poor health, an injury, family situations, layoffs and other unforeseen circumstances could force you into an unplanned retirement.

unplanned retirement

You may already have a plan based on the date you would like to retire, but do you have a backup plan if that date comes a few years earlier than expected?

Know Your Benefits

As a NYSLRS member, you’re entitled to benefits that may help. Most vested members can begin collecting a lifetime pension as early as age 55, though your benefit may be permanently reduced if you retire before full retirement age. (Full retirement age for NYSLRS members is either 62 or 63, depending on your tier. Full retirement age for Social Security benefits depends on your year of birth.)

If you can no longer do your job because of a physical and mental condition, you may be eligible for a Social Security Disability, or a NYSLRS disability benefit if your disability is permanent.

You may also want to look into Workers’ Compensation if you are injured on the job or Unemployment Insurance if you have been laid off from a position.

Other Ways to Plan for the Unexpected

Doing your homework is important. The more you understand the potential benefits available to you, the better you can estimate your income if you are forced to retire early. Unfortunately, the numbers you come up with may not be enough when dealing with an unplanned retirement.

But one potential source of income can make a big difference: retirement savings. Your savings could help you get by until you are eligible to collect your NYSLRS pension or another retirement benefit. If you are not saving for retirement, consider starting now. And if you are saving, consider increasing your savings. It could become a lifeline if the unexpected happens.

New York State employees and some municipal employees can also save for retirement through the New York State Deferred Compensation Plan. Ask your employer if you are eligible.

For more information about the benefits offered by your NYSLRS retirement plan, visit our website to read your plan publication.

10 Most Popular Posts of 2016

As we wrap up 2016, let’s take a look back at our most popular posts.

  1. NYSLRS Retirees at Home and Abroad

    Where did you go? Not far, it turns out. Seventy-eight percent of NYSLRS retirees and beneficiaries stay in New York State. However, the rest have made homes around the country and even around the world.

  2. How Full-Time and Part-Time Service Credit Works

    Work is work, and credit is credit. But, if you work part-time, there’s some math involved. We helped members crunch the numbers.

  3. NYSLRS Basics: Becoming Vested

    It’s all about becoming vested, earning enough service credit to qualify for a pension benefit — even if you leave public employment. We went through the ins and outs of becoming vested for members of both the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS).

  4. What to Know When Leaving Public Employment

    Even if you leave public employment, you’re still a NYSLRS member. We gave members a rundown on their options and how their benefits may change after moving to private employment before retirement.

  5. Taxes and Your NYSLRS Retirement Benefit

    You won’t need to pay New York State or local taxes on your NYSLRS retirement benefit, but other states and federal income tax are another matter. We gave members and retirees some insight into federal tax withholding and the 1099-R form.

  6. Your Checklist to Apply for Retirement

    Once you’ve earned the service credit, it’s time to get ready for retirement. We gave members a six-item checklist to make sure they’ve laid the groundwork for a smooth application process.

  7. Death Benefits for ERS Members

    We looked at the death benefit that Tier 2, 3, 4, 5 and 6 ERS members in regular plans receive.

  8. Planning Around Your Retirement Date

    A solid lead up to retirement is essential, but picking the right retirement date is important too. We gave members some tips about when to submit their applications, how to pick a date and what their first benefit payments will look like.

  9. NYSLRS’ Top Five Retirement Myths from 2015

    NYSLRS members are spread out over two systems, six tiers and 346 retirement plan combinations. It can be easy for information to get jumbled between coworkers and between plans. So, we cleared up some common misconceptions we’ve heard from members and retirees over the years. This is an entry in our Retirement Myths series.

  10. Retirement Milestones for ERS Tier 3 and 4 Members

    The better you understand your road to retirement, the better you can plan for it. We took a look at the journey for Tier 3 and 4 ERS members and pointed out several retirement benefit milestones they’ll pass along the way. We also took a look at Tier 5 and Tier 6 member milestone, too.