Creditable Service: Creditable Service is the time the MTRB will allow you to use toward retirement

Creditable Service: Creditable Service is the time the MTRS will allow you to use toward retirement. A year is based on either the ten months of a teacher or the twelve months of an administrator or other acceptable employment. Part of a year counts for creditable service. If you have months to express in your creditable service it is done with a decimal point. Thus thirty years and four months would be expressed 30.4.

Age Factor: I use a different, but accurate approach, then the age factor numbers given by the MTRB. A numeral one in front of the decimal point indicates the person is in their fifties; a numeral two in front of the decimal point indicates in their sixties. The number after the decimal point indicates the second number in a person's age. Thus:

1.0 = 50 1.1= 51 1.2= 52 1.3= 53 1.4= 54 1.5= 55 1.6= 56 1.7= 57 1.8=58 1.9-59

2.0= 60 2.1=61 2.2= 62 2.3= 63 2.4= 64 2.5= 65

2.5 is the highest age factor one can use. Thus a person who is 66, 67 or older, would still use the 2.5 age factor. For age factor, part of a year does not count. It is the age you are on the birthday preceding your retirement or the age you are on the day you retire if you retire on your birthday.

Retirement Plus Factor: If you bought into Retirement Plus you get to add an additional percentage to your Option A amount. Retirement Plus allows you to add 2% beginning with your 25^th year of service but it cannot be calculated until you have completed 30 years of service. At the completion of each year you add:

30 Y/S = 12% 31 Y/S= 14% 32Y/S= 16% 33 Y/S= 18% 34 Y/S= 20% 35 Y/S = 22%

The highest percentage you can use to figure your retirement benefits is 80%. Even if you work to obtain 36 or 37 or more years of service I have never found anyone who could add more than 22% to reach the 80%. However if you are the exception then 36 Y/S would add 24% and 37 Y/S would add 26%. Don't believe there are any exceptions beyond this! In order to be able to add the 2% you must have completed the year. For example if you have 30.4 Y/S you only can add 12%. When you have 6 more months of creditable service, no matter what month of the school year that falls in, you will have 31 Y/S and can now add 14%.

Final Average Salary (FAS) is calculated on an average of the 3 highest consecutive years of service. For most people that is their 3 last years but it does not have to be.

What constitutes salary? It is the money you get for the job you are doing, plus longevity is your system pays it, plus any stipend you get for a contractual position. This contractual position does not need to be in the system where you are working full time but must be reported to your system.

Formula to calculate your pension.

Age factor X creditable service = Option A percentage under traditional formula. Plus Retirement Plus factor if you are eligible = full Option A formula X FAS = yearly pension under Option A divided by 12 = monthly pension under Option A.

Mary Smiley is 56 years of age and has 34.6 years of service. Her FAS is $56,000. She is under R+. How does she use the above information to calculate her pension?

Mary's age factor is 1.6; creditable service is 34.6 and her R+ factor is 20%.

1.6 X 34.6 = 55.36 + 20 = 75.36% X 56,000 = $42,201.16 Yearly divided by 12= $3516.80 monthly under Option A

Tom Stickler is 55 years of age and has 35 years of service. His FAS is $62,000. Tom has a summer birthday on August 15 at which time Tom will be 56. He definitely wants to retire and has R+.

1.5 X 35 = 52.5% + 22 = 72.5% X $62,000= $44,950 divided by 12 = $3745.83 By waiting for his birthday in August---

1.6 X 35 = 56% + 22 = 78% X $62,000 = $48,360 divided by 12= $4030 under Option A It is obvious that Tom should wait for his birthday even though he looses a month and a half or roughly $5618.75 of pension. With the increase amount of $3410 yearly he will pay himself back with the increase in less than 2 years.

Legal

Do you have all your documents in order? Do you have a listing as to where they can be found?

Do you know who the beneficiaries are for all of your policies? Updating just requires that you request a change of beneficiary form from the agency that holds your policy or the Teachers Retirement Board for your active teacher's contribution.

Are you one of the 40% of Americans who have a will? If not take care of this now. Make sure the one you have does not need updating.

Need for MA Teachers' Retirement System

Notorized birth certificate Marriage certificate if taking Option C

Copy of discharge if veteran

Photo copiess from contract of salary schedule for period of time which makes up your FAS, longevity and contractual stipend position.

Six months beforee your effective date of retirement you should download the Application to Retire from the MYRS website. It is 18 pages long. Some of the pages must be filled out by your payroll dept. Recommend that you have them fill out their portiton first. Among these pages is the forms authorizing the MTRS to withhold your health care premiums, if you are carrying hte health insurance, a form telling them where to send your monthly check if you elect direct deposit and the option selection form. Four months(no sooner) prior to your effective date of retirement you should send the forms, return receipt requested to the MTRS.

Social Security

Full retirement age

If you were born before 1938, you were eligible for your full Social Security benefit on your 65th birthday. In 2003, the age at which full benefits are payable began to increase gradually. The following chart will guide you in determining your full retirement age:

Full retirement age
Year of birth Full retirement age
1937 or earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943-1954 66
1955 66 and 2 months
1956 66 and 4months
1957 66 and 6 months

1958 66 and 8 months
1959 66 and 10 months
1960 67

NOTE: Although the full retirement age is rising, you should still apply for Medicare benefits within three months of your 65th birthday. If you wait longer, your Medicare medical insurance (Part B) may cost you more money.

Preretirement Page

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Last Updated March, 2009