| | Curious, I looked at the retirement benefit formula on page 7 here for most employees. It is 2% (times years of service times pay) at age 55 or 60 and 1.25% at age 65. Maybe I'm missing something, but there seems to be a strong incentive not to work past age 60. Consider a person with 30 years of service at 55. So three choices are retire at age 55 with a pension of 60% of pay, at age 60 with 70% of pay, or age 65 with 50% of pay.
Of course, the above is not the whole picture. Retiring before 65 results in a significant drop in income until age 65. However, income is 10% or 20% more after age 65 than working to age 65. Also, there are possible pay hikes for working past age 55. However, the drop in income from the state for 5 or 10 years might be offset by working a private sector job.
Are there any Californians on RoR who may have heard more about this? Do lots of state employees retire at 60 or earlier?
Clearly state employees retiring at 55 or 60 rather than 65 is a much bigger burden on taxpayers. The pension is payable N+10 or N+5 years rather than N years (for most, who live past age 65). If N turns out to be 15, N+10 is 66.7% more and N+5 is 33.3% more.
(Edited by Merlin Jetton on 12/09, 11:39am)
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