Planning for Retirement
Retirement is a major event in most people’s lives. It ushers them from the obligations of the workplace to the self-direction of retired living. As you prepare for your KCERA retirement, here is a suggested timeline to assist in your planning.
3-5 Years Before Retirement
- Watch the KCERA Retirement Planning Seminar or attend a KCERA seminar.
- Identify a potential retirement date. Some members choose to retire after a birthday to gain a higher age factor or by April 1 to qualify for that year’s cost-of-living adjustment.
- Contact Member Services staff to obtain a benefit estimate, or use the Benefit Estimator to calculate your own estimate.
- Increase your years of retirement service by purchasing service credit. You may be eligible to pay with personal check, payroll deduction, retirement account rollover and/or salary advance.
6-12 Months Before Retirement
- Select your retirement date. Here are a few things to consider about the timing of your retirement. You may want to retire on or before April 1 so that you are eligible to receive the cost-of-living adjustment that is payable in April. You will only receive retirement service credit for a pay period that you complete, so you may want to retire on the first day of a new biweekly. The “age factor” used to calculate your pension increases every three months until you are age 60 for General Tier I members, age 65 for General Tier II members, age 50 for Safety Tier I members and age 55 for Safety Tier II members. You may want to retire after your birthday or a subsequent quarter year. You must work a whole year at a higher salary in order for it to be fully included in your final average compensation (FAC). The FAC of members subject to PEPRA rules is determined based on a three-year period.
- Obtain an updated benefit estimate from Member Services staff or the Benefit Estimator.
- If you were married during your career but later divorced or legally separated, your ex-spouse may have a “community property interest” in your KCERA benefit. If so, please provide KCERA with a copy of your Judgment, Joinder and court-approved Domestic Relations Order (DRO). KCERA cannot issue your first retirement payment until these documents are on file.
- Contact your department to discuss unused sick leave and vacation hours. At retirement, depending on your MOU, unused sick leave may be paid out to you in either a lump sum payment on your final check or if you so choose and have an eligible account, rolled into Deferred Compensation. Unused vacation may be paid out to you in either a lump sum payment or if you so choose and have an eligible account, rolled into Deferred Compensation. It can also be applied towards ‘terminal vacation’, a program that allows you to run out your vacation hours up to your retirement date. You will need to coordinate with your department in order to calculate the date you can begin vacation based on your accrued hours and any eligible holidays available to you. For more information on setting up a Deferred Compensation account or rolling eligible accruals into your Deferred Compensation account, please contact the Deferred Compensation office.
- Contact your employer’s Health Benefits Division to obtain information about retiree health benefits. If you plan to purchase health insurance through your employer, you have a limited time to enroll after retiring.
- If you are reciprocal to another retirement system in California, you must retire from both systems on the same day. If you do not, all reciprocal benefits will be forfeited.
2 Months Before Retirement
- Contact Member Services staff to discuss the advantages and disadvantages of the five retirement options and the Temporary Annuity Option. Your election is final after your first benefit payment is issued, so choose carefully based on your financial needs and goals.
- Complete KCERA’s retirement application packet. Be sure to follow the instructions on the forms, and return them to KCERA within 120 days of your retirement date. (If you are planning to take terminal vacation, you may submit the forms when your vacation begins.) Please include all requested documentation, such as copies of your marriage certificate and driver’s license.
1 Month Before Retirement
- Resolve any remaining issues with KCERA, Health Benefits and Deferred Compensation.
- Prepare your finances for the interim, “unpaid” period between your date of retirement and the deposit date of your first benefit payment. This period can last up to eight weeks, so plan accordingly.