Tag Archives: retirement planning

Countdown To Retirement — 18 Months Out

After taking time to plan and learn about your NYSLRS retirement benefits, you’ve decided to retire. In the final months leading up to your retirement date, there are important things you need to do. Our Countdown to Retirement series will help you know what to do and when — beginning with 18 months out.

18 Months Out

You should request a NYSLRS retirement estimate 18 months before you plan to retire. Your estimate will provide your approximate pension payment amounts under different payment options, as well as information about your retirement benefits.

To get your NYSLRS retirement estimate, send us a completed Request for Estimate form (RS6030). On the form, make sure you include:

  • Planned retirement date
  • Name and birth date of your intended beneficiary
  • Public employment history

Your public employment history dates don’t have to be exact, but NYSLRS will use this information to review your account to see whether you are eligible for any additional service

pension verification letter infographic

Your NYSLRS Retirement Estimate

When you receive your NYSLRS retirement estimate, you can expect to see your:

With your NYSLRS retirement estimate, you can see how an outstanding loan balance or additional service credit might affect your pension. This is information you need now; it shouldn’t be a surprise when you retire. You may receive your estimate and decide that you’re not ready to retire. That’s fine; you can request a new one later on.

The NYSLRS retirement estimate is based on the information we have on file for you, so it’s important to review it carefully. If your estimate isn’t what you expected, report any inconsistencies to us as soon as possible.

Counting Down

Your planned retirement date will be here before you know it. As it gets closer, check out the rest of our Countdown to Retirement series for steps to take 12 months, eight months, four to six months and one to three months before your retirement date.

A Good Plan Can Ease Transition to Retirement

When people talk about retirement planning, they’re usually talking about money. But there is another aspect that people often forget. What will you do with all that newfound free time?

Sure, after decades of hard work, thoughts of sleeping late and taking it easy seem pretty good. But retirement is a big transition, and many retirees don’t consider its potential psychological consequences.

steps to ease transition to retirement

Create a Plan and Schedule

While you may have some complaints about your job, it is an important part of your life. It helps define who you are and can give you a sense of accomplishment. It provides structure, mental stimulation and social interaction. Leaving the workforce creates a big void, and watching daytime TV or frequent trips to the grocery store may not be enough to fill that void. Empty or aimless hours can lead to boredom, disenchantment and even depression.

You may have a long list of things to do, places to go, books to read, but it won’t mean much if you don’t act. To successfully manage your time, you’ll need to actively plan and create a schedule. Set down how you will spend each day of the week, blocking out time for chores, social engagements, hobbies and exercise. Sticking to a schedule will give your days structure and give you a sense of purpose.

Stay Active and Engaged

For most people, staying busy and remaining socially engaged are essential to a satisfying retirement. That’s why some retirees go back to work full-time, while others opt for part-time or seasonal jobs.

But a retirement job doesn’t necessary mean continuing to do the same old thing. Retirement is an opportunity to reinvent yourself. Do something you’ve always wanted to do, something fun and challenging.

Hopefully, you’ve planned your retirement so you won’t need to work to meet basic needs, so your retirement gig won’t have to pay a lot. In fact, maybe the job for you is one that doesn’t pay at all, at least monetarily. There are countless organizations looking for volunteers, so it shouldn’t be hard to find opportunities that match your skills and interests.

Volunteering just a few hours a week will give you something to look forward to and keep you connected to the outside world. And studies show that it can improve both your mental and physical well-being.

Exercise Your Body and Brain

Regular exercise not only keeps you physically fit, it also increases your sense of well-being. Whatever you do to get exercise, make it part of your regular schedule. Consider taking a fitness class at a local gym, which also adds a social element to your workout. (And you can up the ante by trying something new, like a martial arts class.)

Don’t forget to exercise your brain. A course or workshop can help you discover a new side to yourself (the painter, the mystery writer, the master of topiary). You may want to enroll in classes at a local community college or even return to school full-time.

Whatever you do, make sure it’s part of a plan – a plan for a happier retirement.

Infographic regarding spending habits

Spending Changes in Retirement

Just like starting your first job, getting married or having kids, retirement will change your life. Some changes are small, like sleeping in or shopping during regular business hours. Others, however, are significant and worth examining ahead of time… like how much you’ll be spending in retirement each month or each year.

An Employee Benefit Research Institute (EBRI) study offers some good news for prospective retirees. Household spending generally drops at the beginning of retirement — by 5.5 percent in the first two years, and by 12.5 percent in the third and fourth years. (Although, nearly 46 percent of households actually spend more in the first two years of retirement.)

Analysis from the Bureau of Labor Statistics in the U.S. Department of Labor seems to support the research from EBRI. In “A closer look at spending patterns of older Americans,” the author analyzed data from the 2014 Consumer Expenditure Survey, and she also found a progressive drop in spending as age increases. (Income declines with age as well.)

While data supporting EBRI’s study is helpful, it turns out that the highlight of the Consumer Expenditure Survey results is a detailed look at how the things we spend our money on change as we grow older.

Infographic regarding spending habits

As interesting as that is, it’s just a general look at how older Americans are managing their money. What really matters is: How will you spend your money once you retire?

Prepare a Post-Retirement Budget

Like a fiduciary choir, financial advisors all sing the same refrain: Start young; save and invest regularly to meet your financial goals. If you do, the switch from saving to spending in retirement can be easy.

But, in order to make that transition, you need a budget.

The first step toward a post-retirement budget is a review of what you spend now. For a few months, track how you spend your money. Don’t forget to include periodic costs, like car insurance payments or property taxes. By looking at your current spending patterns, you can get an idea of how you’ll spend money come retirement.

Then, consider your current monthly income, and estimate your post-retirement income. If your post-retirement income is less than your current income, you might want to plan to adjust your expenses or even consider changing your retirement date.

We have monthly expense and income worksheets to help with this exercise. You can print them out and start planning ahead for post-retirement spending.

Monthly budgeting worksheets (PDF)

Monthly Worksheets (PDF)

For those of you who carry smart phones, Forbes put together a list of popular apps for tracking your daily spending. All of them are free, though some do sell extra features. Many of them can automatically pull in information from your bank and credit card accounts, but if you’d rather avoid that exposure or if you use cash regularly, you may prefer an app that lets users enter transactions manually.

Knowing Your Retirement Plan is the Key to Retirement Planning

Information is the key to being fully prepared for your retirement years. The single most important thing you can do to achieve this goal is to know what NYSLRS retirement plan you’re in. Once you know that, the next thing you must do is understand the benefits your plan provides.

Your retirement plan booklet covers things like how long you’ll need to work in order to receive a pension, how your pension amount is determined, and what kind of death and disability benefits may be available to you. You can find a copy of your plan booklet on our Publications page.

But here’s the challenge: NYSLRS manages 335 retirement plan combinations, which are described in 51 plan booklets. How do you figure out which is yours?  The information below should help.

Two Key Questions

To get started, you need to answer two questions.

Question One: Which retirement system are you in? NYSLRS is made up of two different systems:

  • The Employees’ Retirement System (ERS), which is for public employees in non-teaching positions. It also includes some law enforcement personnel, such as correction officers, sheriffs and sheriffs’ deputies.
  • The Police and Fire Retirement System (PFRS), which is for paid firefighters and police officers, including SUNY police, State Park police, Encon officers and State Forest Rangers

Question Two: Which tier are you in? There are six tiers in ERS and five tiers in PFRS. Your tier, based on when you joined NYSLRS, determines such things as when you become eligible for benefits and how much you contribute. You can find your Tier on page 2 of your Member Annual Statement (MAS) or you can check the NYSLRS website.

For many members, knowing your retirement system and tier are enough. But for other members, especially those in law enforcement, it may help to have your retirement plan number as well. The plan number indicates the section of Retirement and Social Security Law the plan is based on. For example, Plan A15 indicates that you are covered by Article 15. You can find your plan number on page 4 of your MAS, in the Salary Information section.
Member Annual Statement example

Roughly three-quarters of all ERS members are covered by Article 15; they just need to know their tier to find the correct booklet.

State police , SUNY police , State Encon Officers , State Park Police and Forest Rangers each have their own plan booklet, which can be found in the PFRS section of the Publications page. That’s also where you’ll find the Special 20- and 25-Year Plans , which cover officers in most municipal police departments. (Members in these special plans should see 384, 384-d or 384-e listed in the plan information in their MAS.)

If you are still unsure which retirement plan booklet covers your benefits, you can send us an email using our secure contact form , or you can ask your employer.

Retirement Plan Booklet

Take the Time to Understand Your Retirement Plan

It cannot be stated enough how important it is to read your plan publication to learn all you can about your benefits. It is the key to solid retirement planning. Remember, no one has a more vested stake in your retirement than you do.

Your Checklist to Apply for Retirement

After months of planning and preparation, you’re ready to apply for retirement. To get your NYSLRS  pension benefit, you need to send in an application. Let’s look at what you should include with the form to help make the retirement process go more smoothly.

Filling Out the Retirement Application

Unless you’re filing for a disability retirement, you’ll need to fill out the Application for Service Retirement (RS6037). As you fill out the form, make sure you:

  • Know your registration number. You can find it on your most recent Member Annual Statement or retirement estimate.
  • Know your past employment. To help ensure you receive the proper credit for your public service, please list your public employment history. Include any military service and memberships in other New York public retirement systems.
  • Include your beneficiary’s information. You won’t make an official beneficiary designation with this form, but including these details will help us give you specific amounts for the pension payment options  that offer a lifetime benefit for a beneficiary.
  • See a notary. The form must be filled out completely and signed by a notary public.

Proof of Birth

Make sure we have proof of your birth date. You can send it with your retirement application or before or after, but we cannot pay pension benefits without it. We accept photocopies of the following as proof:

Other Forms

Option Election

You’ll need to choose your pension payment option, or how you want your pension paid. Option election forms are available on our website, but we will also send you a form after we process your application. If you choose an option that provides your beneficiary a lifetime pension benefit when you die, you must provide proof of your beneficiary’s birth date.

Federal Income Tax Withholding

Your NYSLRS pension isn’t subject to New York State income tax, but it is subject to federal tax. You can fill out a W-4P form  any time to tell us how much to withhold from your monthly benefit. We don’t withhold income tax for other states. Visit the Retired Public Employees Association’s website to see whether your benefit will be taxed in another state.

Direct Deposit

Direct deposit is the fastest and most secure way to receive your pension benefits. You can enroll in our direct deposit program when you file for retirement. Just fill out a Direct Deposit Enrollment Application (RS6370), and return it to us.

Domestic Relations Order

If an ex-spouse is entitled to part of your pension, you should send us a copy of your domestic relations order (DRO) as soon as possible. The DRO gives us specific instructions on how to divide your benefits. We cannot finalize your pension until we review it and calculate the court-mandated distribution of your benefit. For more detailed information, please read our Guide to Domestic Relations Orders.

Questions

If you have other questions about applying for retirement, read our publication, Life Changes: How Do I Prepare to Retire? or contact us.

Health Care Costs Can Be Steep in Retirement

As you plan for your retirement, you may be forgetting one important thing – health care.

NYSLRS does not provide health care coverage for its retirees, and we’re not the experts on this subject. But we do offer advice to members about retirement planning, and how you’ll pay for health care coverage and out-of-pocket medical expenses should be an important consideration as you approach retirement.

Know the Health Care Cost Facts

Medicare premiums, deductibles, co-payments and prescription drug costs all add up. And those expenditures are likely to rise because health costs have been increasing faster than the rate of inflation and people spend more on medical expenses as they age.

Recent reports indicate a typical 65-year-old retiring in 2018 would spend well over $100,000 to cover medical costs over the course of retirement. What’s more, most NYSLRS members can retire as early as 55. That means you may spend a longer time in retirement than the average retiree, and you may not be eligible for Medicare for years.

couple working on their budget together

What You Can Do To Prepare

Before you can budget for retirement medical costs, you’ll need to do your homework. Start by talking to your employer about the health care options available to you after your retire and get an estimate of how much you will need to pay. You should also familiarize yourself with Medicare’s options, benefits and costs.

Once you get an idea of what your monthly health care might be, you can start planning how to pay for it. You may have to increase your retirement savings. If you’re a state employee, or a municipal employee covered by the New York State Health Insurance Program (NYSHIP), you may be able to get credit for unused sick leave that can reduce your NYSHIP premium. This program is managed by the New York State Department of Civil Service, not NYSLRS. Their Planning for Retirement booklet provides some good information.

Getting Credit for Your Military Service

If you served in the U.S. Armed Forces, you may be eligible to buy back up to three years of active service credit. Because service credit is a factor in calculating a NYSLRS pension, in most cases buying military service credit will increase your pension.

Military Service Credit

To be eligible, veterans must:

  • Have been honorably discharged;
  • Have at least five years of credited service in the Retirement System;
  • Have not received credit for this service in any other public retirement system in New York State; and
  • Apply for and purchase military service credit before they retire.

How to Apply for Military Service Credit

To apply and request a cost for military service credit:

1. Fax your name, contact information and a copy of your DD-214 to 518-486-6405 or 518-402-7799;

or

2. Mail a letter with your name and contact information, and a photocopy of your DD-214, to:
    Military Service Unit
    110 State Street
    Albany, NY 12244-0001

If after reviewing your application we determine you are eligible, we will send you a letter that will tell you how much credit you are eligible to purchase and the cost. Most members in Tier 1, 2, 3 or 4 can use our online benefit projection calculator to see how the credit would impact your pension. Tier 5 and 6 members can get that information by calling 1-866-805-0990, or using our secure email form (www.emailNYSLRS.com).

For more information, visit the Military Service Credit page on our website.

Just Started A New Public Sector Job? Remember This Step…

Are you a current New York State & Local Retirement System (NYSLRS) member working at a new job in the public sector? Even though you’re already a member, make sure your new employer sends us a membership application for you.

The Importance of the Filling a New Membership Application

woman on job interview

By sending a new membership application, your employer provides us with updated information about your membership, like the start date of your new position and your job title. But, it’s important for other reasons as well. Up-to-date member information:

  • Ensures that your employment history and benefit projection are accurately reported in your Member Annual Statement;
  • Helps guarantee that benefit determinations are based on the most current information;
  • Highlights any delays between when you began working and when your employer started reporting you;
  • Ensures that we will receive the correct contribution amount for your membership; and
  • Allows us to update your retirement plan in our records, should you change plans as a result of your new employment.

Starting a new public sector job is also a good opportunity to update your beneficiary information . You should check your beneficiaries regularly to make sure any benefits will be paid according to your wishes. Payments are made to the last named beneficiary.

Retirement Online is the convenient and secure way to review and update your beneficiary information. Register or Sign In , and then click “Update My Beneficiaries.”

Being a Friend

While you have applications on your mind, think about any friends or coworkers you may have. Perhaps, like you, they have recently changed jobs. Remind them to make sure their employers submit new applications.

Or, maybe you know a coworker who isn’t a mandatory member of NYSLRS, but who has that option. Suggest they consider joining NYSLRS.

It’s a good idea to join even if you aren’t sure you’ll ever apply for a benefit. By becoming a NYSLRS member, you lock in your tier and protect your benefits. And, if you do decide to leave public employment and withdraw your membership, you’ll receive 5 percent on your contributions, which can be a competitive return.

For more information about the benefits of NYSLRS membership, check out our Membership in a Nutshell publication.

How Full-Time and Part-Time Service Credit Works

Service credit plays a vital part in your pension calculation and your eligibility for other NYSLRS benefits. As a NYSLRS member, you earn service credit by working for an employer who participates in the Retirement System. All your paid public employment is creditable. You would not, however, earn credit for any period when you are not receiving a salary, such as an unpaid leave of absence. If you work full-time or part-time, you’re earning service credit, just at different rates.

Earning Service Credit When You Work Full-Time

When you work on a full-time, continuous basis throughout your career, we’ll calculate your total service credit from your date of employment up until the date you leave paid employment. Most full-time workers earn a year of service credit for working 260 work days in a year. For a full-time 12-month employee, 260 work days constitutes a full year. For our members who work for school districts, a full-time 10-month academic year can be 180 work days. (If you work in an educational setting, we covered that in an earlier blog post.)

Earning Service Credit When You Work Part-Time

Your service credit is prorated if you work part-time. Part-time employment is credited as the lesser of:

the number of days worked ÷ 260 days

or

your reported annual salary ÷ (the State’s hourly minimum wage × 2,000)

You can think of it like this: let’s say you work 130 days in a year. If a year’s worth of service credit is earned for working 260 days full-time, you’d earn half a year (0.5) of service credit for your part-time work.

Check Your Member Annual Statement

From May to July, we’ll send out this year’s Member Annual Statements. For most members, your statement will show how much service credit you’ve earned over the past fiscal year (April 1, 2017 – March 31, 2018). It will also show your total service credit as of March 31, 2018. Make sure to look it over to see how much service credit you’ve earned over your career.

For more detailed information about service credit, please refer to your specific retirement plan publication.

Dig into the NYSLRS Summer Reading List

Looking for some perfect summer beach reading? Why not check out these page-turners from NYSLRS? They’re light on colorful characters and exotic settings. But, what they lack in plot intrigue, they make up for in important retirement information.

summer reading

1.  Service Credit for Tiers 2 through 6

Service credit is one of the main components that determine your NYSLRS pension. Whether you’re a new member or well into your career, it’s important to understand what it is, its role in your pension calculation and the various types of service for which Tier 2, 3, 4, 5 and 6 members can receive credit. ( Read it now. )

2.  Retirement Plan for ERS Tier 3 and 4 Members (Articles 14 and 15)

Nearly 300,000 Tier 3 and 4 members of the Employee’s Retirement System (ERS) are covered by this plan. The publication explains some of the benefits and the services available to you, including a service retirement, a vested retirement, a disability retirement, death benefits and more. ( Read it now. )

3.  Membership in a Nutshell

NYSLRS membership can be overwhelming when you first join. There’s new terminology: What’s a tier or service credit or a final average salary? There are services like loans and benefit projections as well as new responsibilities like keeping your account information up to date. This guide will help you navigate NYSLRS and your new retirement plan. ( Read it now. )

4.  Retirement Plan for ERS Tier 6 Members (Article 15)

More than 130,000 Tier 6 ERS members are covered by this Plan. The publication explains some of the benefits and the services available to you, including a service retirement, a vested retirement, a disability retirement, death benefits and more. ( Read it now. )

5.  Life Changes: A Guide for Retirees

Already retired? As a NYSLRS retiree, you know that you will receive a monthly retirement benefit for life. However there may be other benefits available to you, as well as services that we provide retirees. This guide will answer many of the questions you may have and explain your responsibilities as a retiree. ( Read it now. )

Not covered by the retirement plans above? Maybe you’re a police officer, a firefighter, a sheriff or a correctional officer. Find your plan as well as publications covering other general topics of interest on our Publications page. They’re great reading any time of year.