Let's compare scenarios
At 55, Yvette will have:
- 14 years of contributory service
- 14 years of eligibility service
- Average annualized earnings of $65,000
Here is what Yvette's monthly pension would be if she retired at age 55, in comparison to if she waits one year and retires at age 56.
| | Age 55
14 years eligibility service | Age 56
15 years eligibility service |
|---|
| Monthly pension | $922/month
| $1,142/month
|
| Bridge benefit (until age 65) | $139/month | $190/month |
| Annual pension (until age 65) | $12,732/year
| $15,984/year
|
| Annual pension (after age 65) | $11,064/year | $13,704/year |
After reviewing both scenarios with her Member Services Specialist, Yvette learned why retiring on Dec. 31, 2023, at age 56 with 15 years eligibility service was the right choice for her, as outlined in the next tab.
Yvette was developed as an example by HOOPP for illustrative purposes only. In this example, we have assumed that Yvette is one year older and has one more year of contributory service when she retires with 15 years of eligibility service. We also have assumed the 2021 YMPE increases by 3%. The average YMPE as of Dec. 31, 2022, is $59,700. The average YMPE for Dec. 31, 2023, is $61,889.40. For simplicity, inflation protection has not been factored into this example. All amounts have been rounded to the nearest dollar. The HOOPP benefit improvement, effective January 1, 2023, has not been reflected in this example.
The result
By waiting just one more year to retire, Yvette could increase her pension by $220 per month which is a 24% increase in her lifetime pension!
That’s because:
- Yvette gained an additional year of contributory and eligibility service, which translates to an additional $53.
- She qualified for a more generous early retirement benefit once she reaches 15 years of eligibility service which translates into an additional $167. Reaching this milestone means that she gets a bigger
lifetime pension and bridge benefit.
- The percentage of pension she would receive would increase from 70% to 82% as the early retirement pension benefit gets closer to 100% with every extra full year of age and eligibility service
that you complete.
Yvette was developed as an example by HOOPP for illustrative purposes only. In this example, we have assumed that Yvette is one year older and has one more year of contributory service when she retires with 15 years of eligibility service. We also have assumed the 2021 YMPE increases by 3%. The average YMPE as of Dec. 31, 2022, is $59,700. The average YMPE for Dec. 31, 2023, is $61,889.40. For simplicity, inflation protection has not been factored into this example. All amounts have been rounded to the nearest dollar. The HOOPP benefit improvement, effective January 1, 2023, has not been reflected in this example.