Deferred Retirement (for inactive members)

If the inactive member is eligible to retire, there is no advantage in deferring retirement beyond age 60, as the benefit does not increase beyond that age when the member is in an inactive status. If the inactive member becomes eligible for benefits but delays applying for retirement, he/she forfeits all benefits from the date of eligibility to the date the retirement application is received by ERB. The retirement date for inactive members is the first day of the month following date of receipt of the retirement application.

 

Here is an example of deferring a retirement benefit: Mary has 20 years of earned service and qualifies for retirement at age 55. She will be terminating her employment by age 55. Her monthly benefit of $1,000 is decreased by the age reduction of 12% - 2.4% per year for each year under 60 for the “Rule of 75” option. ( Mary's reduction will decrease as she gets closer to age 60.) Her gross retirement benefit would be $880 per month. Deferring her benefit to age 60 would increase her benefit to $1,000 (no age reduction) but cost her $52,800 ($880 x 12 months x 5 years) in lost pension income. Mary would begin her admittedly larger pension $52,800 in the red. She would break even on this option just before her 87th birthday.

 

To calculate a retirement estimate, you can log into your ERB account and use the benefit estimator.

 

For more information please see the ERB Member Handbook or email ERB-memberhelp@state.nm.us.