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Office of the New York State Comptroller’s Seal

NYS Comptroller

Thomas P. DiNapoli

Life Changes: How Do I Prepare to Retire?

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A Message from Comptroller Thomas P. DiNapoli

We are living longer. With many of us now spending a third of our lives in retirement, it’s important to consider how you can enjoy financial security in your retirement.

By reading this booklet, you are taking the first step. Here you’ll find essential information to help you understand your options as you plan for retirement, including:

  • A step-by-step guide to the retirement process;
  • A list of available resources;
  • Key factors to consider; and
  • Possible post-retirement concerns.

While this booklet is useful, your circumstances are unique. Please contact our staff with any questions you may have about your specific benefits.

Sincerely, Thomas P. DiNapoli State Comptroller

Understanding Your Benefits

Understanding both your current benefits and those you may receive in the future is essential. To help you stay up to date, we offer several sources of benefit and planning information.

Our Website

Your membership tier and plan within the New York State and Local Retirement System (NYSLRS) determine the benefits you receive and when you can receive them. You can find detailed information about your retirement plan on our Publications page.

We revise our website periodically to reflect changes in law. Visit often to ensure you have the latest information about your plan.

Retirement Online

Retirement Online is a convenient and secure way to review your NYSLRS benefits and conduct transactions in real time. Members can check their balances (outstanding loans, past service costs, member contributions), notify us of any change of address, update their beneficiaries, apply for loans and more.

Future updates will make additional features available. Learn more about Retirement Online and register today.

Semiannual Newsletters

The Update and The Sentinel offer important information on pre-retirement planning and changes in legislation for Employees’ Retirement System (ERS) and Police and Fire Retirement System (PFRS) members, respectively. We send them to your employer for distribution twice a year and post them on our website.

E-News

E-News, our monthly email newsletter, features the latest retirement news and includes a special section dedicated to pre-retirement planning. To start receiving E-News, visit our Email Sign Up page.

Your Member Annual Statement

Each summer, you receive a Member Annual Statement (MAS), which lays out the most recent information we have for you, including your:

  • Retirement plan;
  • Designated beneficiaries;
  • Service credit;
  • Earnings information; and
  • Outstanding loan balances.

For most members, the MAS also features your projected benefits and retirement options — an estimate of your pension based on your current salary and service, with details on the payment options available to you.

Make sure to review your MAS, and contact us to update your address, beneficiaries or other similar information. If you have questions about the salary and service information reported by your employer, please speak to your personnel or payroll office.

If you have questions about your statement, try the online MAS tutorial on our Member Annual Statement page. This interactive guide includes a page-by-page explanation of your statement, instructions on correcting or updating your information and answers to the most commonly asked questions.

Pre-Retirement Presentations

At your employer’s request, we offer presentations designed for members within five years of retirement eligibility. These presentations explain the retirement process, lay out the benefits you can expect and address post-retirement issues. Try to attend one at least 18 months before you plan to retire.

Individual Consultations

We offer individual consultations at locations throughout the State. To schedule an appointment, contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area.

We require appointments for individual consultations at all sites. However, with the exception of our New York City location, you do not need an appointment to drop off forms, pick up information or have something notarized.

When visiting any of our sites, please bring photo identification, any recent correspondence (such as benefit projections) and your most recent Member Annual Statement. For office hours and locations, visit our Consultation Site Offices page.

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Retirement Planning Tips

Make Sure Your Employment History Is Complete

Your retirement benefit is directly related to your years of public service. When you work for a participating public employer in New York State, you receive service credit. One year of full-time employment equals one year of service credit.

Employers send us records for all of their employees who are NYSLRS members. However, if you worked for a public employer and then joined the Retirement System later, we would not have those records. You may be able to receive service credit for that time, but you must request it.

Purchasing Service Credit

Purchasing service credit is optional. However, in most cases, the additional credit will increase your benefit.

When you apply, we will notify you of your eligibility, calculate the cost and give you several options for making your payment (such as in a lump sum, through payroll deductions or with funds from a deferred compensation plan or tax-sheltered annuity). In most cases, you will pay interest from the time of the qualifying employment. So, the sooner you purchase your credit, the less costly it will be. You must request credit for any previous service before you retire.

Employment Before Your Membership

If you worked for a participating employer before you joined NYSLRS, you can request service credit for that time. Send us a Request for Previous Service form (RS5042) Adobe pdf.

For more information, read Service Credit for Tiers 2 through 6 (VO1854).

Military Service

You may be able to apply credit for past service in the U.S. armed forces to your retirement service credit. To find out, please write to us, or email us. Include your name, retirement registration number and a copy of your Certificate of Release or Discharge from Active Duty (DD-214) showing you were honorably discharged. There is usually a cost to receive this credit.

For more information, including eligibility requirements, please visit our Military Service Credit page.

Paying Off Loans

If you have taken a loan from NYSLRS, remember that you cannot pay off your loan after you retire. An outstanding loan balance when you retire will permanently reduce your retirement benefit. In most cases, you will also need to report at least some portion of the loan balance as ordinary income (subject to federal income tax).

Check your loan balance. If you are not on track to repay your loan before retirement, you can increase your loan repayments, make additional lump sum payments, or both. By paying off your loan before you retire, you can avoid a permanent reduction in your benefit.

Your Final Average Salary

Your final average salary (FAS) is a key factor in your pension benefit calculation.

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. Usually these are the years right before retirement (but they can occur anytime in your career).

Your FAS includes your regular salary and can also include:

  • Overtime and noncompensatory overtime earned in the FAS period;*
  • Holiday pay;
  • Longevity payments earned in the FAS period (maximum of one per FAS year); and
  • Up to 30 vacation days (for Tier 1 members who joined before April 1, 1972, and ERS Tier 3, 4 and 5 members), if your FAS is based on the last three years of earnings prior to your retirement.

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

Limitations to Your FAS

The earnings used in your FAS calculation may be limited based on your tier and retirement system (ERS or PFRS). Any amount above the limit is excluded from your FAS calculation.

Tier 1 (ERS and PFRS)

If your date of membership is June 17, 1971, or later, each year of earnings used in the FAS calculation is capped at 120 percent of the earnings in the previous 12-month period.

Tier 2 (ERS and PFRS), Tier 3 PFRS Members Covered by Article 11 and Tier 5 (PFRS)

Each year of earnings used in the FAS calculation is capped at 120 percent of the average earnings for the previous two years.

Tiers 3, 4, and 5 (ERS) and Tier 3 PFRS Members Covered by Article 14

Each year of earnings used in the FAS calculation is capped at 110 percent of the average earnings for the previous two years.

Tier 6 (ERS and PFRS)

Each year of earnings used in the FAS calculation is capped at 110 percent of the average earnings for the previous four years.

For more details about FAS limitations, please find your retirement plan booklet on our Publications page.

PFRS Members Only

Some employers provide a one-year FAS for their PFRS members based on the regular compensation earned in the 12 months of actual service immediately preceding retirement. Salary, overtime, holiday pay and longevity pay are also considered regular compensation. For a complete list of what can be included, consult your plan information on our website.

Check with your employer to see if a one-year FAS is available to you. (A one-year FAS is not generally available to Tier 6 members.) Your three-year FAS may be greater than your one-year FAS. We will use the higher of the two.

Working Longer vs. Retiring Early

Since your retirement benefit is based on your total service credit, in most cases, the longer you work, the more you receive. Some plans provide a higher benefit when you reach certain milestones, such as 20 or 30 years. Usually working longer also means a higher FAS, another key component in your retirement benefit calculation.

If you are a Tier 2, 3, 4 or 5 ERS member covered by a regular plan who works until age 62, you will receive your full benefit (one that is not subject to permanent reductions based upon your age at retirement). Tier 6 ERS members covered by a regular plan must work until age 63 to receive their full benefit. Tier 2, 3 and 4 ERS members who are age 55 or older and have 30 or more years of service credit also can retire with their full benefit.

If you choose to retire early, the amount of your benefit reduction is tied to your age and service credit. The closer you are to age 62 when you retire (age 63 for Tier 6 members), the smaller the reduction in your benefit will be.

PFRS members and ERS members in Tiers 2 through 6 who are covered by a special plan should consult our website for specific benefit reduction details.

If You Are Not Working for a Public Employer

If you are vested,* but no longer work for a public employer and do not anticipate returning to public employment, should you retire early? Should you take the benefit reduction or wait until you can receive your full retirement benefit?

For Tier 1 members, benefit reductions do not apply.

Tier 2, 3 and 4 members who retire at age 55 will see a 27 percent reduction for early retirement. If you wait to retire with full benefits at age 62, it will take you 19 years, until you reach age 81, to match the money you would have received if you had retired with the reduction at age 55.

Tier 5 and Tier 6 ERS members can retire at age 55, but reductions for early retirement are substantial — 38.33 percent for Tier 5 and 52 percent for Tier 6.

Of course, every situation is unique. If you anticipate returning to public employment, you should evaluate the potential impact of additional service credit and a higher FAS before choosing early retirement. If you are considering early retirement, consult our About Benefit Reductions page.

*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 10 years of credited service to be vested.

The Sick Leave Benefit

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 chooses to offer this benefit, you may convert unused, unpaid sick leave into additional service credit. If your employer offers this benefit, it will be listed in your MAS.

To be eligible, you must retire directly from public service or within a year of leaving. You cannot use credit for your unused sick leave to increase your retirement benefit beyond the maximum payable under your plan. It will not qualify you for vesting, a special retirement plan or a better retirement benefit calculation.

Your years of additional service credit are determined by dividing your total unused, unpaid sick leave days (capped at 165 days for most members, 100 days for most Tier 6 members or 200 days for some members employed by New York State) by 260.

Accumulated sick leave may also reduce or eliminate post-retirement health insurance costs. NYSLRS does not administer health insurance programs for retirees, but your employer’s health benefits administrator can check your eligibility. 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 website.

The Retirement Benefit Calculator

Our online retirement benefit calculator allows most members to estimate their benefit with different retirement dates, final average salaries and service credit totals. By changing each variable, you can see the impact it may have on your benefit. Visit our Project Your Pension at Retirement page and click “Benefit Projector Calculator” to give it a try.

Request a Benefit Projection

Most Tier 2, 3 and 4 members with five or more years of service credit are eligible to request a benefit projection. Actively employed members age 50 or older can also request a benefit estimate that projects additional service credit based on a date of retirement up to five years into the future. In most cases, we’ll mail these on the next business day.

A benefit projection is a great tool for vested members who are considering leaving the payroll before retirement eligibility or who will be eligible to retire within five years.

To request your benefit projection, contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area. Press 3 for members not yet retired, then 1 (for ERS members) or 2 (for PFRS members), then press 4 for benefit projections.

You can also send us a Request for Estimate form (RS6030) Adobe pdf or write or email us. Be sure to include your estimated retirement date, the name and birth date of your intended beneficiary, your public employment history, any military service you may have, your current address and your retirement registration number. For our mailing address or to email us, visit our Contact Us page.

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. If you decide not to retire after getting your estimate, you may request a new estimate whenever your circumstances change.

Please contact us to update your date of birth, address, beneficiaries or other similar information. If you have any questions about the salary and service information reported by your employer, ask your personnel or payroll office.

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Retirement Countdown

Once you begin seriously considering retirement, there are a few steps you can take to make your path to the big day as smooth as possible.

File Proof of Your Birth Date

Before we pay out any pension benefits, we must have proof of your birth date on file. You can submit proof when you apply to retire or any time before. In most cases, we’ll accept a photocopy. If we need to see the original document, we will contact you.

You can submit a copy of one of the following any time before you retire:

  • Birth certificate
  • New York State driver’s license issued on or after January 1, 2005
  • Passport
  • Marriage certificate, if it notes your age on a given date
  • Enhanced driver’s license
  • Certificate of Release or Discharge from Active Duty (DD-214)
  • Baptismal certificate
  • Naturalization papers.

Please write your member registration number on the copy, and mail it to:

NYSLRS

110 State Street

Albany, NY 12244-0001

You can also drop off proof of your birth date at one of our consultation sites. Except at our New York City site, you do not need an appointment to drop off forms. If you are unable to provide one of the above, please contact us.

File Your Domestic Relations Order

Divorce can affect your retirement benefits, as they are considered “marital property” that can be divided between you and your ex-spouse when the marriage ends. If you divorce:

  • Your ex-spouse may be entitled to a portion of your pension.
  • You may need to name your ex-spouse as beneficiary of any pre-retirement death benefit.
  • You may need to choose 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 issued by a court that gives us specific instructions on how to divide your benefits.

We offer an easy-to-complete, online DRO template. You don’t have to use the template, but using it can help ensure your DRO meets all guidelines. It will also enable us to complete our review faster. We will also honor a properly drawn DRO issued by a New York State court.

Once the court has approved a DRO or an amendment to a DRO, please send us a certified copy promptly. For more information, please visit our Divorce and Your Benefits page.

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.

NYSLRS does not administer health insurance benefits, but your benefits administrator will have information on the types of coverage available and their costs. For New York State employees and retirees, the 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 coverage as a retiree, or you can visit the Department of Civil Service website to learn more.

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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 straightforward.

Your Retirement Application Makes It Official

You cannot receive your retirement benefit without filing an Application for Service Retirement (RS6037) Adobe pdf, available online or from our consultation sites. If you mail your application to us, we recommend you use certified mail, return receipt requested. You also can drop off forms, and have them notarized, at one of our consultation sites. At our New York City site, please make an appointment.

Your application must be on file with the Office of the State Comptroller at least 15 days — but not more than 90 days — before your chosen retirement date. The 15-day filing requirement is waived if you are over 70 years old at retirement. It is also waived if you are a vested member who left the public payroll before age 55. If you submit your application on or after your 55th birthday (or on the first of the month following your 55th birthday for Tiers 1 and 2), your application will be effective immediately upon filing with this office.

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

The Confirmation Letter

Once we receive and begin processing your application, we will send you a confirmation letter. We will also notify your employer that you filed for retirement.

If you received an estimate from us within the past 18 months, we will include three forms with your confirmation letter:

  • Your Withholding Certificate for Pension or Annuity Payments form (W-4P), so you can choose the amount you want withheld from your benefit each month for federal taxes;
  • A Direct Deposit Enrollment form (RS6370), so we can automatically deposit your benefit payment into your checking or savings account; and
  • An Option Election form, so you can choose how you want your pension paid based on the information in your estimate.

If you have not previously received an estimate, we will send you the W-4P and Direct Deposit Enrollment forms while we process your estimate. Once your estimate is complete, we will send it to you with the Option Election form.

You can also submit any of these forms with your retirement application. Find them online on our Forms page.

The W-4P Form

If you don’t submit a W-4P form, we will still process your application, but we will withhold federal taxes based on the status “married with three dependents.” You can change your withholding status at any time. To print a W-4P form Adobe pdf, visit our website.

Your retirement benefit is not subject to income tax in New York State or its municipalities. However, if you move to another state, it could be taxable there. Before you move to another state, find out for sure. The Retired Public Employees Association (RPEA) tracks which states tax New York State pensions. Visit RPEA’s website for details.

The Option Election

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

All of the options provide you a monthly benefit for life. The Single Life Allowance option provides the largest monthly retirement benefit. However, with this option, no payments are made to your beneficiaries after you die. The other options reduce your payments now in order to provide a benefit for your beneficiaries or estate upon your death. Your accountant, financial adviser or estate planner can help you consider the tax implications of your option election.

For descriptions of the payment options available to you, visit our Payment Option Descriptions page.

You have 30 days from the start of the month following your retirement date to change your option election. After those 30 days, it cannot be changed.

If we have confirmed receipt of your retirement application, but you have not yet received an estimate of the amounts payable under each option, the letter accompanying your estimate will include your option election deadline.

What to Expect When You Receive Your Retirement Benefit

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. You may be eligible to receive partial payments until we’ve established your final monthly pension amount. These partial payments are approximately 90 to 95 percent of the estimated monthly amount associated with the retirement option you elected, and are based on your most recent estimate or benefit projection. The time it takes to finalize your retirement benefit amount can vary depending on the complexity of your own circumstances.

Remember: You must file proof of your date of birth before we can make any payment.

Your Retroactive Check

Once we have all the information we need and we finalize your benefit amount, you will receive a retroactive payment of what you are owed back to your date of retirement (the difference between partial payments and your finalized retirement benefit amount).

After you receive your retroactive check, your pension benefit will be paid at the end of each month. If you’re enrolled in direct deposit, payments will be deposited into your checking or savings account on the last business day of the month. If you don’t enroll in direct deposit, payments will be mailed out by paper check on the second to last business day of each month.

Get Your Money Fast with Direct Deposit

You can enroll in our direct deposit program when you file for retirement. Just fill out an application, and return it to us. Your payments will be deposited directly into the checking or savings account you specify.

Direct deposit is quick, easy and safe. Get your money immediately, and avoid long lines at the bank. You can print a Direct Deposit Enrollment form (RS6370) Adobe pdf from our website.

Planning Your Post-Retirement Budget

A post-retirement budget helps you adjust your spending for this next phase in your life. One of the best ways to plan for the future is to track what you spend now. To help you, we have included monthly expense and monthly income worksheets on the following pages. These forms can help reveal your current spending habits and assist you in projecting your future needs. Remember to account for non-monthly expenses, such as car insurance, property taxes and school taxes.

Worksheets to Help You Plan — Monthly Expenses
Item Present Anticipated
Shelter
Rent $ $
Mortgage Payments    
Real Estate Taxes    
Insurance    
Household Maintenance
Repairs, House & Grounds    
Water, Electricity, etc.    
Fuel    
Telephone    
Waste Disposal    
Hired Help    
Other    
Home Purchases
Furniture & Fixtures    
Equipment, House & Yard    
Other    
Automobile & Transportation
Monthly Car Payment    
Repairs    
Gas & Oil    
License & Registration    
Insurance    
Other Transportation    
Medical & Health
Medicines & Drugs    
Doctor, Dentist, etc.    
Hospital    
Insurance Premiums    
Other    
Clothing
New Clothing    
Dry Cleaning, Laundering    
Other    
Entertainment
Food
Food at Home    
Food Away from Home    
Taxes & Insurance
Federal    
State & Local    
Life Insurance Premiums    
Personal Care
Gym Fees    
Grooming    
Other    
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    
Salary    
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. Make sure copies are kept in a secure place. You should review and update this information periodically.

Name  
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
A B C
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      
Other:      
Other:      

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

Attorney  
Accountant  
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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Stay Informed

Your retirement benefits are an important part of a solid financial plan. They can help you and your beneficiaries achieve financial security in retirement or in the event of disability or death. Use these tips to help you understand your benefits and stay informed.

  • Access your NYSLRS retirement information, update your address and more using Retirement Online. It’s a convenient and secure way to review your benefits and conduct transactions in real time. Learn more about Retirement Online and register today.
  • Review your Member Annual Statement carefully and notify us of any errors promptly.
  • Visit our website frequently to learn about your benefits, download forms, read informative booklets and brochures, and get tips on preparing for retirement.
  • Attend a pre-retirement presentation to learn about the retirement process and discuss post-retirement issues. At your employer’s request, we offer these presentations designed for members within five years of retirement eligibility.
  • Make an appointment to visit any of our consultation sites, where you can meet with an information representative to discuss special concerns or request specific information.
  • Notify us if your mailing address changes. This is especially important if you leave public employment before you are eligible to retire.
  • Contact us if you have questions about your benefits.
  • Subscribe to our blog, New York Retirement News, where you’ll find tools to help you understand your benefits, as well as important retirement news.
  • Like us on Facebook and follow us on Twitter for quick tips and updates on a variety of retirement topics.
  • Sign up for E-News, our email newsletter, for the latest NYSLRS news and information dedicated to pre-retirement planning.
  • Read your member newsletter for current retirement information and updates on your benefits.

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Contact Us

If you have any questions or you need more information, we’re glad to help.

  • Email: secure contact form;
  • Call: 1-866-805-0990, or 518-474-7736 in the Albany, New York area; or
  • Write:

    NYSLRS

    110 State Street

    Albany, NY 12244-0001.

VO1709 (Rev. 4/17) © 2017, 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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