Chapters

00:00 Understanding Retirement Age and Trends

02:10 Service-Based vs Age-Based Retirement

05:10 Planning for Longevity in Retirement

Transcript

Hi everyone, I'm Ryan Earley, host of the PERS Pro YouTube channel. In our last video, we talked about the earliest dates you can retire, but today we're looking at when people actually retire. We'll share the average age, the average years of service, and even how long the typical Mississippi PERS member spends in their retirement. Let's get started.

Before we look at a single average number, it's helpful to see the distribution by age of when PERS members retire. Not everyone retires the day or year they become eligible. According to the PERS Facts and Figures Report, there is a wide distribution of when members choose to exit the workforce. As you can see, the largest group, 42%, retires between the ages of 60 and 64. However, look at those groups under age 60. If you add them together, nearly 40 % of all PERS members retire before they turn 60. This can happen because they've hit that 25 or 30 year service requirement before reaching age 60.

Now let's look deeper at how the averages look like for only those PERS members who retire early based on their service rather than their age. On average, service-based retirees are exiting at age 57 with 30 years of service credit. This is the dream and often the situation many PERS members find themselves in, starting a fulfilling career in your 20s and retiring in your 50s before you even qualify for early Social Security benefits.

But what about those who don't spend 25 or 30 years in the system? Many members join PERS later in life and retire once they reach the age-based requirement, which is age 60, except for those eligible for disability retirement. The data for age-based retirees looks quite different. Members who retire based on age tend to work until about age 62, but they only have an average of about 16 years of service credit. This means their monthly check will likely be smaller than a 30-year veteran's, but they've successfully met the vesting requirements to secure that lifelong check. Many are also eligible to begin drawing Social Security benefits early to make any gaps in needed retirement income.

One of the most important questions in choosing your retirement date is, how long can my money last me? Luckily, PERS is a defined benefit plan meaning it pays you for life, (ignoring partial lump sum payments). But how long is that life on average for a Mississippi PERS retiree? According to PERS facts and figures, on average, PERS service retirees, not including disability retirees, spend close to 19 years in retirement. In fact, PERS currently pays benefits to 80 retirees and beneficiaries who are 100 years old or older. These particular centenarians have spent on average over 38 years in retirement, This is why your cost of living adjustment or COLA is so vital. It's designed to protect your buying power over two, three, or even four decades of retirement.

So what can you take from this video? Here are your action items for today. One, identify your path. Are you aiming to be a service-based retiree who on average retires at age 57 with 30 years of service credit? Or the age-based retiree who on average retires at age 62 with 16 years of service credit? Knowing your path helps you estimate your future benefits more accurately. Two, factor in longevity. When you are building your retirement plan, factor in living a minimum of 20 years beyond your retirement date and possibly 25, 30 or even more depending on your personal circumstances.

I hope this data gives you a clear picture of what the typical retirement looks like in the Mississippi PERS system. In our next video, we'll be discussing when should a PERS member retire diving first into the specific financial considerations you need to take into account before you sign those final retirement papers. Please make sure you subscribe so you don't miss this and other videos in our new retirement series. If you found this video helpful, can thank me by hitting the thumbs up button and sharing it with other PERS members. If you have a follow up question about PERS or anything else related to personal finance, please visit our website at perspro.ms and submit your question or topic for a future episode. Thank you for your valuable public service to the state of Mississippi. We'll see you next time.

Disclaimer, this video is for educational and informational purposes only. Neither the host nor this YouTube channel are officially affiliated with, endorsed by, or sponsored by the Public Employees Retirement System of Mississippi. Always consult a qualified professional for personal advice specific to your situation.