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Life Changes: How Do I Prepare to Retire?

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A Message from Comptroller Thomas P. DiNapoli

We are living longer, and as a result, many people will find themselves spending up to a third of their lives in retirement. That is why you should consider what you need to do to ensure a financially secure retirement.

The first step is becoming well informed. This booklet provides you with information you need as you plan for retirement. It describes some of the resources available to you, presents factors to consider as you plan, takes you step by step through the retirement process, and even addresses many post-retirement concerns.

While this booklet is useful, it may not address all of your unique circumstances. Please remember that our staff is available to answer any questions you may have about your benefits.

Sincerely, Thomas P. DiNapoli State Comptroller

Understanding Your Benefits

Become Informed

Learn About Your Benefits

Understanding what benefits you currently have and what you are eligible to receive in the future is essential when preparing for retirement. There are several major sources for this information.

Our Website

When you joined the Retirement System, you were assigned to a tier and retirement plan. You can find specific information about your plan, the benefits you are entitled to receive and when you can receive them on our website. Since our website is revised periodically to reflect changes in the law, visit often to ensure you have the most up-to-date information on your plan.

Your Member Annual Statement

Each summer, you will receive your Member Annual Statement (MAS). It shows the latest information we have for you, including your beneficiary designations, service credit, salary and outstanding loan balances. For most members of the Employees’ Retirement System, it also includes “Projected Benefits and Retirement Options” — a “ballpark” estimate of your pension that details each payment option available to you when you retire.

The earnings and service information on this statement are reported by your employer(s). If there are any errors, please contact us to have them corrected. However, if you believe your reported earnings are not accurate, please contact your employer. Your employer will complete an adjustment report, if corrections are needed, and submit it to us so we can change your records.

If you have questions about your statement, our online MAS Tutorial can help. This interactive tutorial includes a page-by-page explanation of your statement, instructions on how to correct or update your information and answers to Frequently Asked Questions.

Semiannual Newsletters

Laws affecting the Retirement System, and possibly your benefits, can change. We are always offering new pre-retirement planning information to our members. In addition to checking our website, you can get information by reading The Update for Employees’ Retirement System (ERS) members and The Sentinel for Police and Fire Retirement System (PFRS) members. These newsletters are sent to your employer for distribution twice a year and are also available on our website.


E-News, our monthly email newsletter, lets you know about the latest retirement news and includes a special section dedicated to pre-retirement planning. To start receiving E-News, visit our website and click on “Sign up for E-News emails.”

Pre-Retirement Presentations

At your employer’s request, we offer pre-retirement presentations for members within five years of retirement eligibility. These presentations guide you through the retirement process, explain the benefits you can expect and discuss post-retirement issues. Try to attend one at least 18 months before you plan to retire to get more detailed information on the retirement process.

Individual Consultations

Our Information Representatives are available to meet with you at locations throughout New York State. While all of our sites have access to your Retirement System records, we encourage you to bring your retirement estimate or your most recent MAS. For consultation site hours and locations, check our consultation site page. To schedule an appointment, contact our Call Center at 1-866-805-0990 or 518-474-7736 in the Albany, New York area.

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Retirement Planning Tips

Your Public Employment History

Make Sure Your Credit is Complete

The amount of your pension is directly related to your years of public service, unless you are in a special plan allowing you to retire after 20 or 25 years of specific service. When you work for a participating public employer in New York State, you receive service credit. One year of full-time employment is the same as one year of service credit.

While we keep records for all of our members from the date they join the Retirement System, we have no way of knowing if and when our members previously worked for a public employer. If you worked for a public employer before you joined the Retirement System, you may be able to receive service credit for that time.

Please note that you must request credit for any previous service prior to retirement.

Purchasing Previous or Military Service Credit

If you apply for previous or military service credit, we will notify you of your eligibility. Most of the time there is a cost associated with receiving this credit. We will calculate the cost and give you several options for making your payment, such as through payroll deductions, a rollover from a deferred compensation or tax-sheltered annuity, or in a lump sum. In most cases, you are buying back the years of credit with interest, so it is to your advantage to purchase your credit as early in your career as possible in order to pay less interest.

To request previous service credit, complete and send us a Request for Previous Service form (RS5042) Adobe pdf, available on our website or from our Call Center. To request credit for your military service, please send us a copy of your Certificate of Release or Discharge From Active Duty (DD-214).

Purchasing this credit is optional. However, in most cases, the credit will increase the amount of your benefit. For more information, read Get Credit for All Your Public Service on our website.

Paying Off Loans

And How to Avoid a Problem

If you have taken a loan from the Retirement System, it’s important to remember that you cannot pay off your loan after you retire. If you have an outstanding balance when you retire, it will permanently reduce your retirement benefit, and at least some portion of the loan balance will almost always be reportable as ordinary income (subject to federal income tax). If you don’t want a permanent reduction, you can increase the amount of your loan repayments and/or make additional lump sum payments so your loans are fully paid before retirement.

Your Final Average Salary

Be Aware of the Limits

In addition to service credit, your retirement benefit is also directly related to your final average salary (FAS), although there may be limitations.

For members in Tiers 1 through 5, your FAS is the average of your highest three consecutive years of earnings in public employment. For Tier 6 members, your FAS is the average of your highest five consecutive years of earnings. For most, this is the last years of employment immediately before retirement (but it can be anytime in your career).

FAS includes your regular salary and can also include the following payments:

  • Overtime and noncompensatory overtime* earned in the FAS period;
  • Holiday pay;
  • Longevity payment (maximum of one per FAS year) if earned in the FAS period;
  • Up to 30 days vacation, if your FAS is based on the last three years (last five years for Tier 6 members) of earnings prior to your retirement.**

* For Tier 5 and 6 members, the total amount of overtime and noncompensatory overtime that can be used in the FAS calculation is limited.

** Payment for vacation is not included in the FAS calculation of Tier 1 members who joined on or after April 1, 1972, all Tier 2 members, or PFRS Tier 3 (Article 11), 5 and 6 members.

PFRS Members Only

Some employers provide a one-year FAS for their PFRS members. (Note: The one-year FAS is generally not available to Tier 6 members.) The one-year FAS is the regular compensation you earned during the 12 months of actual service immediately preceding your retirement date. (Check with your employer to see if a one-year FAS is available to you.)

Salary, overtime, holiday pay and longevity pay are among the payments considered regular compensation. For more information on what can and cannot be included, consult your retirement plan information on our website. If your three-year FAS is greater than your one-year FAS, we will use the three-year FAS to calculate your retirement benefit.

Limitations to Your FAS

The earnings used to calculate your FAS may be subject to certain limitations based on your tier, Retirement System (ERS or PFRS) and the date you joined. For the latest information on FAS limits, visit our Final Average Salary page.

Working Longer

Full or Reduced Retirement Benefits

If you are a Tier 2, 3, 4 or 5 ERS member who is covered by a regular plan, and you work until age 62, you will retire with a full benefit. Tier 6 ERS members covered by a regular plan who work until 63 will retire with their full retirement benefit. Tier 2, 3 and 4 members who are age 55 or older and have 30 or more years of service credit can also retire with a full benefit. However, if you retire before meeting these requirements, your retirement benefit is permanently reduced. Since the full amount of your benefit is tied to your age and service credit, the closer you are to age 62 (age 63 for Tier 6 members) when you retire, the smaller the reduction in your benefit will be.

Members in Tiers 2 through 6 who are covered by a special plan should consult our website to review the specific details of their plan concerning benefit reductions.

If You’re Not Working for a Public Employer — Filing at 55 vs. 62 (63 for Tier 6 Members)

If you are vested,* no longer work for a public employer, and do not anticipate returning to public employment, should you take early retirement with a benefit reduction or wait until you can receive your full retirement benefit? (Benefit reductions do not apply to Tier 1 members.)

If you are a Tier 2, 3 or 4 member, you can retire at age 55 with a 27 percent reduction for early retirement. If you wait until you are 62 to retire with full benefits, it will take you 19 years to recover the benefits you would have received if you had retired with the reduction at age 55.

If you are a Tier 5 member, you can retire at age 55 with a 38.33 percent reduction for early retirement. If you wait until you are 62 to retire with full benefits, it will take you 11 years to recover the benefits you would have received if you had retired with the reduction at age 55.

If you are a Tier 6 ERS member, you can retire at age 55 with a 52 percent reduction for early retirement. (Tier 6 PFRS members who are off public payroll may not retire until age 63.) If you wait until you are 63 to retire with full benefits, it will take you 7 years to recover the benefits you would have received if you had retired with the reduction at age 55.

If you anticipate returning to public employment, you should evaluate the potential impact of additional service credit and salary on your retirement benefit before choosing early retirement.

* Tier 1, 2, 3 and 4 members are vested when they have at least five years of credited service. Tier 5 and 6 members must have ten years of credited service to be vested.

The Sick Leave Benefit

Sections 41(j) / 341(j)

Sections 41(j) and 341(j) of the Retirement and Social Security Law (RSSL) provide an optional sick leave benefit for ERS and PFRS members, respectively. If your employer offers this benefit, you may receive additional service credit for your unused, unpaid sick leave at retirement. To be eligible, you must retire directly from public service or within a year of separating from service.

The additional credit is determined by dividing your total unused, unpaid sick leave days, which cannot exceed 165 days for most members, 100 days for most Tier 6 members or 200 days for some members in certain plans, by 260. If your employer offers this benefit, it will be listed in your MAS.

Credit for your unused sick leave at retirement cannot be used to increase your retirement benefit beyond the maximum amount payable under your retirement plan. It also will not qualify you for vesting, a special retirement plan or a better retirement benefit calculation.

Accumulated sick leave may reduce or eliminate post-retirement health insurance costs. We do not administer health insurance programs for retirees, but your employer’s health benefits administrator can tell you if you and your family are eligible for post-retirement coverage. For more information, New York State employees and others covered by the New York State Health Insurance Program should visit the Department of Civil Service’s website.

The Retirement Benefit Calculator

A Useful Website Tool to Estimate Your Retirement Benefit

The Retirement Benefit Calculator is available on our website and allows most members to enter different retirement dates, final average salaries and service credit totals to estimate what their benefit could be when they retire. By entering a variety of information, you can see the impact additional service credit and/or delaying retirement may have on your benefit. Visit our website and click on the Quick Link, “Use Our Benefit Calculator.”

Benefit Projections

Request a Benefit Projection from Our Call Center

Most Tier 2, 3 and 4 members with five or more years of service credit are eligible to request a benefit projection by calling the Retirement System’s Call Center. Members of any age can request a benefit projection based on their salary and service reported to that date. Actively employed members age 50 or older can also request a benefit calculation that projects additional service credit based on a date of retirement up to five years into the future. In most cases, these projections will be mailed to your home address the next business day. This benefit projection method is a great tool for vested members who are considering leaving the payroll before they are old enough to collect their pension benefits, and for those members who will be eligible to retire within five years. To request a benefit projection, contact our Call Center toll-free at 1-866-805-0990, or 518-474-7736 in the Albany, New York area.

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Retirement Countdown

Once you begin seriously considering retirement, there are important things you need to know and do in the months leading up to the big day. Here are just a few steps you can take to make your path to retirement as smooth as possible.

Requesting an Estimate

An Essential Step for Success

If you are eligible to retire within 18 months, one of the most important things you can do is request an estimate. With your estimate, you can confirm that the information we have for you is accurate. For example, if you requested credit for previous public employment, you can make sure it’s included in your estimate.

The estimate will show:

  • Your approximate FAS (not including vacation pay, future increases in salary, etc.);
  • Your total years of credited service;
  • Your total member contributions, if applicable;
  • Your outstanding loan balances and how much your pension will increase if you pay off the loans before retiring (if applicable);
  • The retirement date used to determine your pension;
  • The names and birth dates of your current beneficiaries;
  • How much your pension will be under each of the retirement payment options; and
  • The increase in your pension if you purchase optional service credit (if applicable).

To get an estimate, send us a completed Request for Estimate form (RS6030) Adobe pdf, available on our website and from our Call Center. You can also write to us. In your letter, include your estimated retirement date, the name and birth date of your intended beneficiary, your public employment history, any military service you may have and your retirement registration number.

The information we have in our records is used to provide you with an estimate of what your pension will be on your estimated date of retirement. Therefore, when you receive your estimate, report any inconsistencies to us as soon as possible. Remember, the figures in the estimate are not final and should be used only as a guide. After getting your estimate, if you decide not to retire, you may request a new estimate 18 months after receiving the initial one.

Proof of Your Birth Date

A Must-Have Document

Before you can receive any pension benefits, we must have proof of your birth date on file. A photocopy of your birth certificate is acceptable. If we need to see the original document, we will contact you.

You can submit proof of your birth date anytime before you retire.

If you do not have a birth certificate, we will also accept one of the following documents:

If you are unable to provide one of the above, please contact us for information about other acceptable documents.

Your Domestic Relations Order

Send Us a Copy

If you divorce, your retirement benefits could be affected. Retirement benefits are considered marital property and can be divided between you and your ex-spouse when the marriage ends.

  • Your ex-spouse may be entitled to a portion of your pension.
  • You may be required to name your ex-spouse as beneficiary of any pre-retirement death benefit payable.
  • You may be required to elect a retirement option that provides a continuing benefit to your ex-spouse in the event of your death.
  • Your ex-spouse may be entitled to a portion of your cost-of-living adjustment.

Any division of your benefits must be stated in the form of a Domestic Relations Order (DRO) — a legal document that gives us specific instructions on how your benefits should be divided. Once the court has approved a DRO or an amendment to a DRO, please send us a certified copy promptly.

For more detailed information, please read our Guide to Domestic Relations Orders available on our website and review our DRO FAQs before you finalize your divorce.

Review Your Health Insurance Coverage

Before you retire, check with your employer’s health benefits administrator to determine your eligibility for post-retirement coverage for yourself and your family. (We do not administer health insurance benefits.) The administrator will be able to provide you with information concerning the type of coverage available, the cost, and how much you must pay. If you are not eligible for coverage after retirement or you need supplemental coverage, you should investigate private health insurance well in advance of retiring.

For New York State employees and retirees, the New York State Department of Civil Service administers the New York State Health Insurance Program (NYSHIP). Your health benefits administrator should be able to answer your questions about your coverage as a retiree, or you can visit the Department of Civil Service’s website to learn more.

Retirement Incentives

Be Informed and Prepared

Occasionally, and sometimes with little forewarning, the Legislature enacts retirement incentive programs. These incentive programs, which are different from local incentives your employer may offer, could provide additional service credit or allow you to retire before you would normally be considered eligible (sometimes with benefit reductions). It is important to note that the New York State Legislature authorizes the enactment of these retirement incentive programs. The Retirement System simply administers them. We will notify you and your employer if the Legislature makes an incentive program available.

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Retirement Process — Step by Step

If your records are in order and you meet the eligibility requirements, the retirement process can be very simple. The following section presents general information regarding the steps to take once you are ready to retire.

Filing Your Retirement Application

The Form That Makes It Official

You cannot receive your retirement benefit unless you file an Application for Service Retirement (RS6037) Adobe pdf, available on our website. The form is also available from your employer, our consultation sites and our Call Center. Staff members at our consultation sites are notary publics and can help you with your application, if needed.

Your Application for Service Retirement (RS6037) must be on file with the Office of the State Comptroller at least 15 days but not more than 90 days before the date on which your retirement will occur. The 15-day filing requirement is waived if you are over age 70 at retirement. Vested members no longer on a public employer’s payroll can file between 90 days and one day before their retirement date.

Do not give your retirement application to your employer. Please send it to us directly.

The Confirmation Letter

You’re on Your Way

Once we receive your application, we will send you a confirmation letter. We will also notify your employer that you filed for retirement. If you received a formal estimate from us within the past 18 months, we will include three forms with the letter:

  • Your W-4P form (Withholding Certificate for Pension or Annuity Payments), so you can choose the amount you want withheld from your benefit each month for federal taxes;
  • A direct deposit enrollment form, so you can have your benefit payment automatically deposited into your checking or savings account as soon as we finalize your retirement calculations; and
  • An Option Election form, so you can choose how you want your pension paid based on the information supplied in that estimate.

If you have not previously received an estimate, we will send you the W-4P form and direct deposit enrollment form and begin to process your estimate. Once your estimate is completed, we will send it to you along with the Option Election form.

The W-4P Form

If you do not submit a completed W-4P from Adobe pdf to us, we will still process your retirement application, but the amount of federal tax withheld will be based on the status, “married with three dependents.” You can change your federal withholding tax status at anytime. W-4P forms are available from our Call Center, consultation sites or website.

Your retirement benefit is not subject to the income tax of New York State or its municipalities. However, if you move to another state, it could be taxable in that state. Check with the state where you will be living to see if your retirement benefit will be taxable. You can also visit the Retired Public Employees Association’s website for a complete list of states that do and do not tax New York State pensions.

The Option Election

The Option Election form tells us how you want your retirement benefit paid to you. It must be filed by the last day of the month in which you retire (unless you are otherwise notified, as in the case of disability retirement).

All of the options provide you with a monthly benefit for life. The Single Life Allowance option provides you with the highest retirement benefit. However, under this option, no monthly payments are made to beneficiaries after you die. All of the other options reduce your benefit in order to possibly provide for your beneficiary (or beneficiaries) upon your death. Your accountant, financial advisor or estate planner can help you determine the tax implications of the various options.

You have up to 30 days after your retirement benefit is payable to change your Option Election (your benefit is payable on the first of the month following your date of retirement).

If you have not yet received an estimate of the amounts payable under each option available to you, we will notify you of your Option Election deadline.

Receiving Your Retirement Benefit

What to Expect
Advance Checks

Since most employers are on a lag payroll, we cannot get certain information (such as your employer’s certification of your unused vacation and sick leave credits) until after you retire. During this time, you may be eligible to receive advance checks (partial payments based on your estimated benefit) until we are able to determine exactly what your actual benefit will be. These checks will be mailed to your home each month, beginning approximately 30-60 days after your date of retirement.

NOTE: Your date of birth must be verified before any payment can be made.

Your Retroactive Check

As soon as we determine exactly what your monthly retirement benefit will be, you will receive a retroactive payment to make up the difference between the advance payments and the amount actually due (minus federal withholding).

Once you receive your retroactive payment, you are automatically included in the regular pension payroll disbursement schedule. With our Direct Deposit Program, your monthly pension payments are directly deposited on the last business day of the month for that month. If you decline automatic enrollment in direct deposit, you will receive pension checks, which are mailed the second to the last business day of each month for that month.

The Direct Deposit Program

The Fastest Way to Get Your Money

You will be enrolled in our Direct Deposit Program at the same time you file for retirement. Just fill out a Direct Deposit Enrollment Application (RS6370)Adobe pdf and return it to us. As soon as your retirement benefit is finalized, your payments will be directly deposited into the account you specified on your enrollment application. (If you are eligible for advance payments, these will still be made by paper check.)

Direct deposit is quick, easy and safe. In most instances, your money is immediately available and you will not have to rely on the Postal Service to deliver your check or wait in long lines at the bank to cash it. Direct Deposit Enrollment Applications are available from our Call Center and our website.

Planning Your Post-Retirement Budget

Having a post-retirement budget enables you to decide how you want to spend your money once you retire. One of the best ways to plan for the future is to keep track of what you spend now. To help you plan your post-retirement budget, we have included our Monthly Expenses Worksheet and Monthly Income Worksheet below. These forms can help you determine how you spend your money over the course of one or two months. Remember to include expenses that occur periodically, such as car insurance, property taxes and school taxes.

Worksheets to Help You Plan — Monthly Expenses
Item Present Anticipated
Rent $ $
Mortgage Payments    
Real Estate Taxes    
Household Maintenance
Repairs, House & Grounds    
Water, Electricity, etc.    
Waste Disposal    
Hired Help    
Home Purchases
Furniture & Fixtures    
Equipment, House & Yard    
Automobile & Transportation
Monthly Car Payment    
Gas & Oil    
License & Registration    
Other Transportation    
Medical & Health
Medicines & Drugs    
Doctor, Dentist, etc.    
Insurance Premiums    
New Clothing    
Dry Cleaning, Laundering    
Food at Home    
Food Away from Home    
Taxes & Insurance
State & Local    
Life Insurance Premiums    
Personal Care
Gym Fees    
Total $ $
Worksheets to Help You Plan — Monthly Income
Source Present Anticipated
New York State Retirement Income $ $
Social Security Income    
Yield from Savings    
Dividends from Stocks, Mutual Funds    
Life Insurance Income    
Real Estate    
Other Sources    
Total $ $
Worksheets to Help You Plan — Where My Assets Are

One problem survivors often have is finding documents and valuable papers. You can do them a favor by filling out this form. Give copies to your loved ones, executor, lawyer and anyone else who will need this information. You should review and update this information periodically.

Retirement System Registration No.  
Social Security Number  

My valuable papers and assets are stored in these locations (address plus where to look)

A. Residence  
B. Safe-Deposit Box  
C. Other  
Item Location
My will (original)      
Power of attorney      
Spouse’s will (original)      
Safe combination      
Trust agreements      
Life insurance policy      
Health insurance policy      
Homeowners policy      
Car insurance policy      
Employment contracts      
Partnership agreements      
List of checking/savings accounts      
List of credit cards      
Brokerage account records      
Retirement plans      
Deferred compensation/IRA      
Titles and deeds      
Notes (mortgages)      
List of stored & loaned items      
Auto ownership records      
Birth certificate      
Military discharge papers      
Marriage certificate      
Children’s birth certificates      
Divorce/separation records      
Health care proxy      

Important Names, Addresses and Phone Numbers

New York State and Local Retirement System 110 State Street, Albany, NY 12244-0001.

1-866-805-0990 or 518-474-7736

Insurance Agent  
Copies Given to  
Date Prepared  

NOTE: Beneficiaries should contact the Retirement System to determine what benefits may be due.

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How to Contact Us

If you have questions, do not hesitate to contact us. There are several ways to do this:

  • Email us;
  • Phone our Call Center at 1-866-805-0990 or 518-474-7736 in the Albany, New York area;
  • Make an appointment to meet with an Information Representative at any of our consultation sites throughout the State;
  • Fax us at 518-402-4433; or
  • Write to us at:

    New York State and Local Retirement System

    110 State Street

    Albany, New York 12244-0001.

VO1709 (Rev. 6/13) © 2013, New York State and Local Retirement System

This publication provides a general summary of membership benefits, rights and responsibilities, and is not a substitute for any New York State or federal law. For specific information about your benefits, please contact us.

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