What is a Pension Plan?
Your pension plan is a defined benefit retirement plan and is most likely managed by your state or local government. With a pension place in place, you can retire assured that you’ll receive the money you need.
How This Applies To You
If you started in the New York State Teachers’ Retirement System between September 1st 1983 and December 31st 2009, you are a tier 4 pension member.
- If you have at least 30 years in the system, you can retire at age 55 without any penalties applied to your pension. If you do not have 30 years, you would have to work until age 62 to avoid penalties.
- Within 30 years, you are entitled to 60% of the average of your highest three consecutive years salary. Every year beyond 30 adds 1.5% to that number.
If you started in the New York State Teachers’ Retirement System between January 1st 2010 and March 31st 2012, you are a tier 5 pension member.
- If you have at least 30 years in the system, you can retire at age 57 without any penalties applied to your pension. If you do not have 30 years, you would have to work until age 62 to avoid penalties.
- Within 30 years, you are entitled to 60% of the average of your highest three consecutive years salary. Every year beyond 30 adds 1.5% to that number.
If you started in the New York State Teachers’ Retirement System on or after April 1st 2012, you are a tier 6 pension member.
- No matter how many years you have in the system, you will receive a penalty if you retire before age 63 as a Tier 6 member.
- Within 30 years you are entitled to 55% of the average of your highest five consecutive years salary. Every year beyond 30 adds 2% to that number.
In-Service Death Benefit
If you were to pass away before filing for benefits, your beneficiary would receive three times your salary (after three years of service) as a lump sum, of which any amount over $50,000 is fully taxable. This applies to all tiers.
This is only the tip of the iceberg when it comes to your pension. Other important considerations that we can discuss include:
- Taxation
- Spousal benefit options
- The importance of choosing where you live in retirement
- The true value of your pension
Want more information regarding your pension, and to see where we found all the above information?
Download Your Pension Handbook
What Financial Questions Do You Have?
Our process together always begins by understanding what you hope to achieve and educating you on all of your options. Then, we’ll determine the right solutions for your financial situation.