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Welcome to our Video Guide - Planning Your Successful
Retirement created for New York State executive branch
employees.
My name is Susan MacLennan and I am sure you are excited about
planning for your retirement.
This series of short videos was designed to provide you with
essential information to answer some of your questions.
But these videos are just a beginning.
You have many important decisions to make regarding your
New York State pension, so we encourage you to also consult
with a representative from the New York State Employees'
Retirement System.
For additional information regarding your pension, please
refer to Chapter 9 of the online version of the Self-Help Guide
to Pre-Retirement Planning available on the Work-Life
Services website at worklife.ny.gov.
This video is entitled, What Steps Should I Take to Prepare
to Collect My New York State Pension?
Bonnie Clark, an Information Representative from the Office
of the State Comptroller, will explain the importance of
requesting a formal estimate of your retirement benefits.
She will also provide information on choosing your
retirement options and how to file your application for
service retirement.
The key to successful retirement planning is preparation.
That preparation should begin well before your date of
retirement.
One of the most important things you can do when you begin to
plan for your retirement is to get an estimate of your pension
benefits.
You should request an estimate approximately 18 months prior to
your retirement date.
It's also important that you consider your entire financial
situation during the retirement planning process.
While many people focus mainly on the amount of money they'll
be receiving, estimating what your bills and other expenses
will be when you retire is just as important.
Calculating a retirement budget will help you to understand what
your entire financial picture might look like after you
retire.
While the Retirement System does not administer health insurance
benefits, they are a very important component of the
retirement process.
You should contact the Health Benefits Administrator in your
human resources office to discuss your health benefits.
If you have taken the proper pre-planning steps, the actual
process for filing for your retirement benefits is
relatively easy.
Shortly before your retirement date, you must file an
Application for Service Retirement to apply for your
pension benefits.
One of the most important things you'll need to do when you begin
to plan for your retirement, is to request an estimate of your
pension benefits.
You can obtain a Request for Estimate form on our website, or
you can give us a call and we can mail the form to your home.
On the form, you'll need to provide us with an estimated
Date of Retirement that is not more than 18 months into the
future.
We recommend to most of our members that they should request
their first General Estimate 18 months prior to the date they
will first become eligible to retire.
You must have at least five years of service credit and be
at least age 55 to be eligible to collect a pension, so most
members become eligible to file a Request for Estimate form at
the age of 53 and a half, using their 55th birthday as their
estimated Date of Retirement.
Even if you don't intend to retire when you turn 55, it's
good to know what benefits would be available to you if your
circumstances were to change unexpectedly.
And while you can only request one General Estimate every 18
months, we have a number of other benefit projection
services available to you if you need to get updated information
after your receive your estimate.
Just give us a call and we'll find a way to get you the
information you need.
There's a number of good reasons to request an estimate of your
pension benefits.
An estimate will help you decide when might be the best time to
for you to retire.
Your pension benefit will be an important piece of your
financial picture in retirement, so it's critical to the planning
process that you have a good idea of the benefits you will
receive before you make any final decisions.
Another important thing you'll need to consider when you retire
is choosing a retirement option.
The estimate results you receive will provide information on the
various retirement options available to you, along with
estimated annual and monthly amounts for each option.
It's important to note that as a retiree from our system, you
will receive a pension benefit from us every month for the rest
of your life, no matter how long you live or what retirement
option you choose.
Retirement options offer our members the opportunity to
select a beneficiary, or in some cases multiple beneficiaries, to
receive a portion of their pension benefit after they pass
away.
You'll have until the end of the month in which you retire to
choose your option, and you'll have only until the end of the
month that follows that to change your option selection.
Because this becomes a permanent decision, it's very important
that you approach the option selection process from the
proper perspective.
It's been our experience here at the Retirement System that many
of our members struggle with understanding how to approach
the retirement option selection process, so I'd like to try and
make that a little easier for you.
While it may be tempting to look at the option amounts provided
on your retirement estimate as the logical first step to
choosing the option that is best for you, the reality is you
should actually be looking at your estimate near the end of
the option selection process, not at the beginning.
The best way to figure out what option works best for you is to
first figure out what you might need to leave your beneficiary.
Try this approach.
Consider what your beneficiary's financial picture would be like
if you passed away and didn't leave them any additional or
continuing pension benefits.
Do your best to estimate how much income they would have
coming in each month without any additional pension benefit, and
just as importantly, you'll need to estimate what their bills and
other expenses would be like each month.
At the end of that discussion, you should have a better idea of
how much additional money your beneficiary may need to
supplement the income they would already have if you passed away
before they did.
It's only after you've completed that discussion that you should
open up your retirement estimate and look at the options
available to you.
Simply look for the option that comes closest to meeting your
needs.
Stop and think about it for a minute.
How could you possibly pick the option that's best for you and
your beneficiary if you don't figure out first how much more
money they'll need if you passed away?
Now that I've explained how to approach the option selection
process, let's take a look at the various options you'll get
to choose from.
The Single Life Allowance option would provide you with the
maximum monthly pension amount each month for the rest of your
life.
If you select this option, all pension payments will stop when
you pass way.
The Cash Refund - Initial Value option is available only to Tier
1 members.
If you select this option, your monthly pension benefit will be
reduced every month for the rest of your life.
You can select one or multiple beneficiaries, and you're
allowed to change your beneficiaries after you retire.
If you were to pass away before we have paid you the Initial
Value of your pension, we would pay the remaining amount to your
beneficiary or, if you have multiple beneficiaries, we would
split the remainder of the benefit between them.
The Joint Allowance options offer you the opportunity to
select a single beneficiary to receive a continuing monthly
benefit for the rest of their life if you were to pass away
first.
You can choose to leave your beneficiary the same amount of
money that you've been receiving each month, or you can choose to
leave them only a portion of what you'll be receiving.
If you select a Joint Allowance option, your monthly pension
benefit will be reduced every month for the rest of your life.
It's also very important to note that your beneficiary can never
be changed after you retire, and that if you're beneficiary were
to predecease you your monthly pension benefit would remain
exactly the same.
The Pop Up Joint Allowance options work just like the Joint
Allowance options, but with one added feature.
Like the Joint Allowance options, the Pop Up options
offer you the opportunity to select a single beneficiary to
receive a continuing monthly benefit for the rest of their
life if you were to pass away first.
You can choose to leave your beneficiary the same amount of
money that you've been receiving each month, or you can choose to
leave them only a portion of what you'll be receiving.
The added feature of these options is that if your
beneficiary were to predecease you, your monthly pension check
would pop up to the amount you would have received under the
Single Life Allowance option.
If you select a Pop Up Joint Allowance option, your monthly
pension benefit will be reduced every month for the rest of your
life, and your beneficiary can never be changed after you
retire.
If you select either the 5 or 10 Year Certain option, you can
select one or multiple beneficiaries, and you're
allowed to change your beneficiaries after you retire.
If you were to pass away before we have paid you for a full five
or 10 years since you retired, we would continue to pay the
same monthly pension amount you were receiving to your
beneficiary or, if you have multiple beneficiaries, we would
split the monthly benefit amongst them for the remainder
of the period you have chosen.
For example, if you choose the 10 Year Certain option, and you
passed away eight years after you retired, we would continue
paying your monthly benefit to your beneficiary or
beneficiaries for the remainder of the 10 year period, or two
more years.
At that point, all benefit payments would stop.
In this example, if you live longer than 10 years after you
retire, there will be no additional monthly benefits paid
to any beneficiaries at the time you pass away.
We also offer a number of alternative options.
If none of the standard options offered to you meet your
specific needs, please contact the Retirement System before you
retire to discuss the other options available to you.
Any request for alternative options must be made to the
Retirement System prior to your Date of Retirement.
Shortly before you're ready to retire, you'll need to file an
Application for Service Retirement.
On this form you'll need to list all of the public employment
you've had throughout your career, and you must sign the
form in front of a Notary Public and have them certify your
signature.
The Application for Service Retirement must be mailed to the
Retirement System using Certified Mail/Return Receipt
requested at the post office, or it can be submitted to a
Retirement System representative at one of the 16 retirement
consultation sites located throughout New York State.
In addition to your retirement application, you'll also need to
file a retirement option election form and proof of your
date of birth.
If you selected an option that will provide a continuing
lifetime benefit to your beneficiary upon your death,
you'll need to submit their proof of date of birth as well.
Do I have to pay taxes on my pension?
Your New York State pension is federally taxable, and when you
retire you must file a W4-P form with us to let us know how much
money, if any, you'd like to withhold from your monthly check
for federal taxes.
If you decide to reside in another state after you retire,
you should check with that state to determine if they will tax
your New York State pension.
Your pension is not subject to New York State income tax or
Social Security tax.
Preparing for retirement may seem like a difficult thing to
do, but if you take the time and make the effort to do the few
things you need to do, you'll probably find it's not as hard
as you think.
We encourage you to view the other pension videos and to
visit their website at www.osc.state.ny.us.
You may also call to speak with a representative at
1-866-805-0990.
Thank you for viewing this video segment and for your service to
New York State.
We wish you a successful retirement!