Choosing the right time to retire is a big decision. While you might think there is a “best” month to step away from work, the truth is that the ideal retirement date depends on multiple personal and financial factors. Missouri LAGERS is here to guide you through this process and help clarify some of the most commonly asked questions about timing your retirement.
When Am I Eligible?
To begin receiving your LAGERS retirement benefit, you must meet two requirements: You must reach the retirement age elected by your employer and be vested with at least five years of service credit. You cannot begin receiving benefits while you’re still earning service credit in LAGERS.
Your retirement age depends on your job type; for general employees, your normal retirement age is 60. You can choose to retire as early as age 55 with your benefit reduced by 6% for each year you retire early.
For police officers, firefighters, and public safety employees (if your employer has elected to cover public safety), normal retirement begins at age 55, with an early retirement option starting at age 50.
You can start receiving your monthly benefit once you reach your eligible retirement age and leave LAGERS-covered employment.
Rule of 80
Some employers offer an early retirement option known as the “Rule of 80”, a provision that allows eligible members to retire before the normal retirement age with no reduction in monthly benefits. If your employer provides the Rule of 80, you can retire with full, unreduced benefits when:
Your age + Years of service = 80.
If you leave LAGERS-covered employment before reaching your Rule of 80 age, you will not be able to start your benefit at your Rule of 80 age. Instead, you will have to wait until your early or normal retirement age to begin receiving your benefit.
It’s important to know that not all employers offer the Rule of 80 provision. To find out if you’re eligible, contact your employer or the LAGERS office.
Is There a Best Month to Retire?
When it comes to choosing a month to retire, there is no universal answer. From a LAGERS benefit perspective, there is no month that results in a better benefit. Every month that you work in a LAGERS-covered position, you earn a month of service credit toward your future benefit. Because service credit is earned each month, your last year of work does not have to be a full calendar year.
Jan.1 is a popular retirement date, but you should also consider other employer-provided benefits, such as payouts for unused vacation or sick leave. These can affect your financial health at retirement and may make certain months more appealing than others.
Will Retiring After Oct. 1 Reduce My Benefits?
No, retiring after Oct. 1 will not reduce your benefits.
A common misconception is that retiring after Oct. 1 could reduce your benefit, because you won’t be eligible for your first year’s cost-of-living adjustment (COLA). While retirees must be retired for twelve full months before receiving their first COLA, LAGERS adjustments are cumulative. If you retire after Oct.1, your first adjustment will be larger the following year to ensure your benefit maintains 100% of its purchasing power.
When Will I Begin Receiving My Benefit?
Once you’ve finalized your retirement plans and submitted the necessary paperwork, LAGERS will pay your monthly benefit on the first business day of each month. Most retirees opt for direct deposit to ensure the fast and secure delivery of their payments. To sign up for direct deposit, fill out the Direct Deposit Form.
The full direct deposit schedule is also available on the Retirees section of molagers.org.
Ultimately, deciding when to retire is up to you. Retirement marks a major life transition and requires thoughtful consideration of your financial readiness, health, and lifestyle goals. While LAGERS can help you understand your benefits and the impact of different retirement dates, only you can determine the right time to begin this new chapter. Whether you’re planning well in advance or are preparing to retire soon, we’re here to ensure you have the information and support you need to make the best decision for your future.
