Q.: I am a Tier 4 member of the NYCERS. I will be retiring in 2020. What date should I put on my retirement application?

A.: Your retirement date should be the day after you are removed from the active payroll, inclusive of paid leave. Your HR office will furnish you with this date.

On the application there is also a place to elect a temporary survivorship option. Prior to your retirement application being finalized, you will be given an opportunity to elect a permanent survivorship option.

You have two temporary retirement allowance survivorship options to choose from. Pick only one. Under the first one (100% Joint-and-Survivor), you agree to receive a reduced retirement allowance for the remainder of your life, with the provision that 100 percent of your reduced retirement allowance will continue, upon your death, for the remainder of the life of your named beneficiary.

Should your named beneficiary die before you, you will not be permitted to name another beneficiary. You will continue, however, to receive your reduced retirement allowance for the rest of your life.

Under the second option (10-Year Certain) you will receive a reduced retirement allowance for the rest of your life with the provision that should you die during the first 10 years, your named beneficiary will receive your reduced retirement allowance for the balance of the 10-year period.

With that being said, be sure to elect a temporary survivorship option. If you don’t and die before electing a permanent survivorship option, it will be deemed that you elected “maximum” (no option). Maximum or no option means you will receive an unreduced retirement allowance during your lifetime, with no further payments after you die.

* * *

Social Security Claiming Age and Life Expectancy: Paul is 62 and single. According to the Social Security actuary, his life expectancy is 20 years. In order to get his full Social Security annuity, Paul must wait until his full retirement age, which is 66. He decides not to wait and claims his reduced Social Security annuity at age 62.

Let’s assume Paul dies in 20 years at age 82. Did Paul claim his Social Security annuity at the right age? Paul received a smaller annuity for 20 years, while if he waited until age 66 to claim he would have received a larger annuity for 16 years. Both claiming choices generated about the same in total lifetime Social Security annuity income.

Q.: You are age 62 and single. You are no longer paying into Social Security. You expect to live to age 82, your life expectancy age. Why wait until age 66 to claim your Social Security annuity?

Mr. Frank is a fee-only Retirement Financial Planner and a retired city high school Teacher of Accounting. He can be reached by phone at (732) 536-9472, or via email at rollover@optonline.net.

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