Employee Matters

This column is prepared by staff of the Employee Compensation and Benefits Services office. E-mail the office at employee@bussvc.wisc.edu, or call 263-7556 or 262-5650. For more information, visit the EC&BS Web site, http://www.bussvc.wisc.edu/ecbs/ecbs.html, or e-mail employee@bussvc.wisc.edu.

Retirement

This is the first in a series of three articles on retirement. The first article covers questions about when people can retire; the second will discuss health insurance in retirement and the roles that sick leave and Medicare play; and the third article will discuss other benefits in retirement.

When can I retire?

You may retire as early as age 55 (50 for protective).

I’ve heard of the “rule of 85.” What is it?

In the Wisconsin Retirement System, there is no rule of 85. Its origin probably stems from the fact that at age 57 with 30 years of WRS service, you can receive an unreduced retirement benefit. If you have 29 years of service and retire at age 57, there is a slight reduction.

What if I do not have 30 years of service when am I eligible for an unreduced benefit?

Once you reach normal retirement age for your classification, typically 65, your benefit will not be reduced by the age reduction factor regardless of your years of service.

How many years do I have to work to get a retirement benefit?

There is no minimum number of years that you need to work to receive a retirement benefit. However, to receive a monthly annuity, you would have to work until your monthly annuity meets the minimum requirement. Otherwise you would receive a lump sum.

Is there a mandatory retirement age?

No, there is no mandatory retirement age.

Do I have to wait for my birthday, or can I retire a month or two earlier?

When calculating retirement, you get credit for each month of service. For instance, if you want to retire in June but turn 60 in September, you would get credit for 59 years and nine months.

When is the best time of year for me to retire?

Under the formula benefits calculation, employees may retire any time during the year, but for classified employees, a popular time is Jan. 3, and for unclassified 12-month employees, a popular time is July 3 or 4. This allows employees to use the prior year as one of three high years of earnings (if higher than other years) for computing the formula benefit; receive personal holidays for the new year; receive a full retirement check for the month of January; and receive another month of employer contribution toward health insurance if applicable.

As with the formula benefits, under the money purchase calculation, employees may retire at any time during the year, but the popular time for both classified and unclassified employees is Jan. 2 or 3. This allows a full year of interest on retirement accounts; another month of health insurance; and a full retirement check for the month of January.

For nine-month employees, contracts for teaching and academic support are based on class schedules. Therefore, employees would retire at the end of the semester, unless they have summer support.

Who do I contact if I have questions?

Visit the EC&BS Web site at http://www.bussvc.wisc.edu/ecbs/ecbs.html, or send your question to employee@bussvc.wisc.edu.