If you have at least 10 service credit years, you may retire at or after age 55. However, your benefit will be reduced to reflect the fact that you are likely to be receiving your benefit over a longer period of time. Reductions are prorated based on the length of time before age 65 that your benefits begin. If you have 30 or more years of service credit, the benefit reduction is set at three percent for each year you are under age 65.
If you accumulate 20 service credit years and separate from service, your defined benefit will be increased by three percent each year from your separation until you begin drawing your benefit.
The chart below lists the approximate annual reductions in 2005. Your benefit is determined by the reduction percentage in effect at the time your benefits begin.
| Age at retirement | 10-29 years of service | 30+ years of service |
|---|---|---|
| 55 | 37% | 70% |
| 56 | 40% | 73% |
| 57 | 43% | 76% |
| 58 | 49% | 79% |
| 59 | 55% | 82% |
| 60 | 61% | 85% |
| 61 | 67% | 88% |
| 62 | 73% | 91% |
| 63 | 82% | 94% |
| 64 | 91% | 97% |
| 65 | 100% | 100% |
Actuarial figures in the middle column are up-dated periodically. The figures for members with at least 30 years of service are set in statute.
Suppose you retire at age 55 with 25 years of service credit and an average final compensation of $3,500. Because you are retiring early, your benefit is 37 percent of what it would be if you were 65 when you retired, with the same service credit and average final compensation. Your monthly benefit of $343.25 is calculated as follows:
1% x 25 years x $3,500 x 37%
= monthly benefit
1% x 25 years = .25
.25 x $3,500 = $875.00
$875.00 x 37% = $323.75
Suppose you work another five years rather than retiring at age 55. At age 60, you will have 30 service credit years. Assuming you have the same average final compensation, your benefit would be calculated as follows:
1% x 30 years x $3,500 x 85%
= monthly benefit
1% x 30 years = .30
.30 x $3,500 = $1,050.00
$1,050.00 x 85% = $892.50