EARLY RETIREMENT

How early retirement affects your pension

You might be interested in retiring early. If you do, your benefit must be reduced because you will be receiving it for a longer period of time. Early retirement is any age earlier than 66. TRA has a provision for age 62 and 30 years of service.

Background

On July 1, 2013, enacted legislation went into effect implementing a new early retirement provision, known as “62 and 30,” for Minnesota’s educators. This provision lowered the reduction factors used to calculate a benefit when a member retires early, i.e. before the normal retirement age. To be eligible for the 62 and 30 provision, a member must meet both milestones in their career:

  • Must attain at least age 62, AND;
  • Must attain at least 30 years of eligible public service with a Minnesota public pension fund
    • Minnesota State Retirement System (MSRS)
    • Public Employee Retirement Association (PERA)
    • St. Paul Teachers Retirement Fund Association (SPTRFA)
    • Teachers Retirement Association

If a member meets the above criteria, the reduction factors applied to a benefit calculation will be smaller:

  • Approximately 3% per year from age of retirement to age 66

For comparison, if a member does not meet the age 62 and 30 provision criteria, reduction factors applied to a benefit calculation prior to age 66 are:

  • Approximately 7% per year from age 59 to 66
  • Approximately 4% per year from age 55 to 59
Frequently Asked Questions:

Does my service with other public pension funds count?

Yes, all eligible service with another Minnesota public pension fund listed above will count toward the required 30 years, if applying within one year with each fund.

Do I have to work until 62 if I already have 30 years?

No, if you have 30 years of service you can stop working and wait until you reach age 62 to begin your benefit.

Does 30 years of service help me if I am not 62?

You must meet both age 62 AND 30 years of service to have your benefit calculated with the lower reduction factors.

Are there other reductions applied to my benefit calculation if I retire early?

Benefit reductions are being phased in for members who do not qualify for the 62 and 30 provision. The interest rate that is embedded in the reduction factors is being gradually eliminated which will result in higher reduction factors. The new reduction factors will be fully phased in by June 30, 2024.

If my benefit is calculated under the 62 and 30 provision, will my COLA be delayed?

No, if your benefit is calculated under the 62 and 30 provision, you will begin to receive your COLA the year after you retire.

Please note: eligibility for and amount of post-retirement increases, i.e. COLAs, are determined by the Minnesota legislature and are therefore subject to change in the future.

Do all Minnesota public pension funds have the 62 and 30 provision?

No, this provision is specific to the TRA benefit calculation.

Log in to your MyTRA online account to generate a benefit estimate or contact TRA.

How Might Changes in the Law Affect My Planned Retirement Date?

To find out how early-retirement reduction formulas affect you, contact TRA to schedule an appointment with a retirement counselor.

How Can I Learn More About Early-Retirement Options?

If you are close to retirement, our counselors can answer your questions about how choosing to retire early might impact you personally. Contact TRA or go to your MyTRA online account to make an appointment with a retirement counselor.