Arizona State Retirement System Retirement Information - House Bill

When may I Retire?

When you retire is up to you. The longer you work and contribute to the Arizona State Retirement System (ASRS), the larger your retirement benefit will be. You may take an "early retirement" with a reduced benefit. Or, you can increase your benefit by working past your normal retirement date, also referred as "late retirement." These concepts are explained below:

Normal Retirement

Normal retirement is the earliest you may retire with a full benefit as calculated by the ASRS benefit formula. A normal retirement date occurs under the earliest of the following situations:
  • at age 65,
  • at age 62 with 10 or more years of credited service,
  • at any combination of years of credited service and age, totaling 80 points.
Example: If you have 31 years of credited service and you are 49 years of age, you will be eligible for a normal retirement because you have 80 points (49 + 31 = 80).

Early Retirement

If you are at least age 50 with five or more years of credited service, you may retire before your normal retirement date. However, a reduction is applied to your benefit depending upon your age and your credited service. The ASRS reduces the full amount of your retirement benefit for each year your age at retirement is under your normal retirement date. Your benefit stays at the reduced amount as long as you are receiving retirement benefits. The reduced amount is not increased except for cost-of-living adjustments or other supplements authorized by the state legislature. The early retirement benefit is determined as shown below:

  • If you are under age 65 when you retire and have at least five years of credited service, but less than 10 years, the ASRS will reduce your benefit for each year your age at retirement is under age 65 by five percent from ages 50 to 60, and by three percent from ages 60 to 65. (See examples that follow this section.)

  • If you are under age 62 when you retire and have at least 10 or more years of service, the ASRS will reduce your benefit for each year your age at retirement is under age 62 by five percent from ages 50 and 60, and by three percent from ages 60 to 62. (See examples that follow this section.)

  • You also may take an early retirement if you have at least 77 points. Your benefit will be reduced three percent for each point or fraction of a point under 80, down to a minimum of 77 points. If you have fewer than 77 points when you retire, you must follow the applicable reduction formula based on age, as shown above. If you are working, you earn two points each year--one for age and one for credited service.

    The ASRS determines age and credited service to two decimal places. Points are rounded down to the nearest whole number. For example, age 60 and 3 months is 60.25 years; 60.25 years of age plus 19.50 years of service is 79.75 points, counted as 79 points for retirement. However, you would need.25 points to reach 80 points. You may gain the additional .25 points by age or service or both.

Late Retirement

If you continue to work beyond your normal retirement date, otherwise known as late retirement, you accrue additional retirement benefits equal to two percent of your average monthly salary for each additional year of work.

Retirement Examples

  • Member A is age 62 at retirement with 12 years of credited service. Member A is entitled to a normal retirement benefit based on age 62 with at least 10 years of service. Member B is age 55 at retirement with 25 years of credited service. Member B has 80 points (55 + 25) and qualifies for normal retirement based on points, even though the member is under age 62 and age 65.

  • Member C is age 63 with 4 years of credited service. Member C is not eligible to retire until Member C earns one additional year of credited service or until age 65. A member must have at least 5 years of credited service to retire before age 65.

  • Member D is age 51 with 5 years of credited service. Member D may take early retirement with a benefit reduced by 60 percent from the normal (full) benefit (5 years at 3 percent [ages 60 to 65] and 9 years at 5 percent [ages 51 to 60]: [5 x 3] + [9 x 5] = 60%).

  • Member E is age 58 at retirement with 18.5 years of credited service. Because this is only 76.5 points, if Member E retires at this time, early retirement will be based on age, not points. Member E will receive a benefit reduced from normal by 16 percent (2 years at 3 percent [ages 60 to 62] and 2 years at 5 percent [ages 58 to 60]).

  • Member F is age 60 and at retirement with 18.5 years of credited service. Member F has 78.5 points and receives a benefit reduced by 6 percent (2 points or fractions of points below 80 at 3 percent each). Again, points are rounded down to the nearest whole number.

How do I apply for my retirement benefit?

You should request a benefit estimate six months to one year prior to your planned retirement date. Members requesting an estimate within a year of retirement will receive a retirement application along with their completed estimates. The figures provided are ONLY estimates; the actual benefit at retirement may be different. However, an estimate within six months of retirement should be close to the actual amount.

You should submit your application to the ASRS about three months prior to the planned retirement date. On the application, you will enter your mailing address, your retirement date, the benefit option you have chosen, the name of your beneficiary or "contingent annuitant," and the date completed. If married, your spouse should co-sign the application to acknowledge the retirement option chosen. When does my retirement benefit start?

You are entitled to start receiving a benefit on the day after you leave employment with an ASRS employer. You must terminate at least one day before the date you want to retire. If your retirement application is received after your desired retirement date, your benefit will be payable from the date of receipt of the application. You also have the option of choosing a later retirement date. In this case, your benefit would start the day you choose, as long as the ASRS has received your application.

Retirement Calculator - get an idea of what your monthly benefit will be at retirement or early retirement.
October 1, 2004