When mapping out your retirement strategy, a defined benefit (DB) or pension can be a great advantage.

First, it’s essential to understand when you may be eligible for a pension and how much you may receive in retirement, so you can plan how to cover expenses and budget retirement income.

The DB, or pension, is a guaranteed monthly benefit for vested, qualified retirees.

PERF Hybrid members need 10 years of creditable or eligible service, or a combination, to become vested. Vested members may receive full pension benefits at:

• Age 65 with 10 years of service
• Age 60 with 15 years of service
• Age 55 with 30 years of service¹

To calculate your pension benefit, we use this formula:

TRF Hybrid members need 10 years of creditable or eligible service, or a combination, to become vested. Vested members may receive full pension benefits at:

• Age 65 with 10 years of service
• Age 60 with 15 years of service
• Age 55 with 30 years of service¹

To calculate your pension benefit, we use this formula:

Annual Amount Divided by 12 months

=

Monthly Benefit

(Example: If your average salary for five years is $45,000 and you have 20 years of service, your estimated monthly pension benefit is $825.)

You can visit our Online Calculators page to enter in your data to see an estimate of what you may receive in retirement here, or you can log into your secure account at myINPRSretirement.org.

Now that you know what a pension benefit is, who qualifies, when you are eligible, and how to calculate your monthly benefit, it’s time to understand why it is important for your retirement strategy.

As a guaranteed monthly benefit, a pension can cover any expenses during retirement. From groceries to health care, leisure activities to household expenses, your pension benefit is yours to do with, with no limitations.

Another advantage of receiving benefits through INPRS is that they won’t be reduced once you begin receiving social security benefits. In fact, INPRS has an option called ‘Social Security Integration’, which is a pension benefit payment option available to PERF and TRF members at retirement.

If you retire between the ages of 50 and 62, you may combine your monthly retirement benefit with your estimated Social Security benefits. This does not affect the amount of the benefit received from the Social Security Administration (SSA).

Before age 62, your benefits will equal the sum of your age 62 Social Security estimate, multiplied by actuarial factors, and your early retirement benefit. This will result in you receiving a larger monthly benefit payment before age 62.

At age 62, your benefit will equal the difference between your age 62 Social Security estimate, multiplied by actuarial factors, and your pre-62 monthly retirement benefit. Depending upon your estimated Social Security disbursement, benefit payments may be greatly reduced. When receiving an unreduced benefit, the age 62 benefit shall not reduce below $180 for PERF members and $185 for TRF members. The reduced benefit will occur based on the estimated Social Security benefit at 62, even if you defer the start of your Social Security until later.

Knowing more about your pension benefits, how to earn them, and what you can do with them will help you better manage your finances and set a goal to work toward before entering retirement.

¹"Rule of 85" Member must be at least 55 and age plus years of service total 85.