Retirement, Is it a possibility?

Is it the right time to retire? Let’s check it out!

How much can you count on from ASRS? Have you been saving the yearly statements that ASRS sends out? Look at the last one for a close estimate of what your monthly annuity would be in the near future. You can also get a close estimate by multiplying your number of years of service times your highest, consecutive 36 months of income out of your last 10 years (for most employees that will be the last 3 years) times a multiplier of 2.1% (if you have 5 to 19.99 years of service), 2.15% (if you have 20 to 24.99 years of service), 2.2% (if you have 25 to 29.99 years of service) and 2.3% if you have 30 or more years of service.

How old are you? If you are 62 years of age or older, you may also apply for Social Security to supplement your retirement. Of course the longer you wait to collect Social Security, the greater your benefit will be. Check out your latest statement on that also! Be aware that there are limits to what you can earn if you take Social Security before reaching your full retirement age (FRA). Your FRA depends on the year you were born. After reaching your FRA, you may collect Social Security benefits and earn any amount of income.

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What if I want to retire and still work?

You can do that! Have you reached “normal” retirement? If you are either 62 with at least 10 years of service, or the combination of your age and years of service totals 80 points, or you are 65, you have reached “normal” retirement. If you have reached “normal” retirement you may go back to work for an ASRS employer the day after your retirement date and work for 19.5 hours per week, and for 19 weeks of the fiscal year you may work more than 19.5 hours. After one year you may work full-time again for an ASRS employer. You must let ASRS know that you are working full-time and that you will not be contributing to the retirement plan. You may contribute to another plan, work full-time, and collect the ASRS retirement. If you take an “early” retirement, you will receive a reduced benefit, and you must wait 60 days before returning to part-time employment with an ASRS employer. Of course you may retire and work full-time under any circumstances for a non-ASRS employer!

Let’s put it together and see if it works!

Okay, between the ASRS pension and either taking your Social Security or working part-time it looks as if you might be able to retire. But what about.

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Health insurance?? That is certainly one of the main cost concerns today.

Again, how old are you? If you are 65, you are eligible for Medicare and can take a supplemental plan through ASRS. ASRS will pay a part of that cost for you. The amount depends on the number of years of service that you have in the system. If you are under 65, you may go on COBRA with the College insurance for up to 18 months or until you reach Medicare age, whichever comes first. Again, ASRS will pay a part of that cost, the amount dependent on your number of years of service. You will need to fill out the ASRS Authorization Form for the Health Insurance Premium Benefit Program and Premium Deductions for Participating ASRS Employer. The form is available in HR and in Payroll. If you choose a plan that is neither through the college nor through ASRS, ASRS will not pay anything towards the cost of your insurance. If you are retiring and have at least 15 years of service with the college, you will receive reimbursement of $1,000 a year toward your health insurance until you reach 65 years of age!

What if I need or would like more service time?

You may purchase public service time served under another employer! It is fairly expensive to do so but may boost up your pension enough to make it profitable to buy service time. You cannot be eligible to receive a pension from the other plan unless it is from military retirement. If you are interested in looking into this option, go the ASRS website (www.azasrs.gov) and use the wizard to get an estimate of the cost of buying the amount of time you have. You can also request the forms you need to begin this process. You can have the money taken out pre-tax by payroll deduction over any amount of time that you choose. The money can also be paid by a lump sum amount, but it will be taxed. Call HR if you want help going through the estimate!

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I think I can do it. . .what do I do first?

Decide on a retirement date. Your retirement date must be at least one day after your last day of work. Write a letter advising your supervisor of your last day of work and your retirement date. Faculty letters should be addressed to the President. In the letter you may request the $1,000 payment per year from the college towards health insurance if you have been here at least 15 years. This will end when you are eligible for Medicare. You may also request payment of any unused sick leave if you have been here at least 15 years. The reimbursement will not be at your regular rate of pay. It is paid at the rate of $60.00 a day, not to exceed $4,200 total. It is taxable income. Please send copies of your letter to HR and to Payroll!

When do I contact ASRS?

ASRS suggests that you contact them 60 to 90 days before your retirement date. Certainly the earlier the better as paperwork seems to take an incredible amount of time in some instances. You can call them at 1-800-621-3778 and request a retirement packet. You will receive an application, tax forms, a direct deposit form and beneficiary form. The retirement packet is now also available online. Go to www.azasrs.gov and click on “forms”. Then click on “retirement wizard”. If you indicate a possible future retirement date, you will get to the screen where you can download the application, tax forms, and the “ending payroll verification” form.

Hopefully, you will have had a chance to attend a meeting held by ASRS for employees who are considering retirement before you have to fill out the forms. We strongly recommend your attendance at one of these meetings! They are usually held twice a year in Prescott. The past few years they have been in March and September. The information will help you decide the way you want your money distributed. There are often updates to benefits given at these meetings. As you near retirement this information will be particularly important to you.

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If I have questions along the way?

Please remember that your HR office is here to help. You may contact us by phone or stop by for a discussion about your situation. We are here to help you work your way through the wizards for estimates of your annuity and your service purchase also!

How about retiring from an ORP?

Please contact HR for the name and number of the current representative for the ORP with whom you are participating. Your representative will send you the appropriate forms and information.

Please call payroll or HR for the Authorization Form for the Health Insurance Premium Benefit Program and Premium Deductions for Participating ASRS Employees

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Quick Checklist for Retirement Preparation

• Decide on a retirement date.
• Write a letter to your supervisor advising the dates of termination and retirement. Please send copies to HR and Payroll.
• Request the retirement application from Arizona State Retirement (or from your ORP rep). The ASRS retirement application is now available on-line at www.azasrs.gov. Click on “forms” on the left of the screen and then on “retirement wizard”. You will be guided through information and given the chance to download the application, tax forms and the “ending payroll verification” form which you should give to Payroll.
• Fill out the forms and return to ASRS at least 60 days prior to your retirement date.
• You will receive a postcard from ASRS advising you that they have received your information and that they will contact you if they need additional information.
• Give thought as to what you will do for health insurance. (See above for suggestions.)
• Make sure to get the “Ending Payroll Verification” form to Julie (X2203) in Payroll. ASRS must receive this soon after your termination date in order to continue processing your application.

rev: 12-2006

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