Hi, KML--thanks for these questions and for helping me think through numbers and possibilities. The way they calculate retirement starts with calculating the benefit percentage: Service credit x age factor, which is based on your age in complete years and months on the date of your retiring. Age 60-65 = age factor .0250. (For each year you retire early, down to age 50, the age factor decreases; for example, if you retire at 50, it’s only .0110. You can’t retire and take benefits before 55, or in some cases 50. Early distributions are hit with tax penalties.) So a service credit of 20 years x an age factor of .0250 = 50.0% (benefit percentage) of your highest average monthly salary. (30 years service credit = 75% highest average monthly salary.) Multiply the benefit percentage by your highest average monthly salary to get your retirement income. Example: Your benefit percentage is 50.0%. The highest average monthly salary is $5400. 50.0% of $5400 = $2,700. Your basic retirement income is $2,700 per month.
So if a husband’s retirement is 2700/month after 20 years of service and retiring between 60-65, using the formula Gerda mentioned, W married 10 years would get 12.5% of that, or 337/month. If service credit was 30 years, H would get 75% of his monthly salary, 4050/month, and W would get 16% of that, or 648/month. (I think these calculations are right!)
He is fully vested now. If you die while eligible to retire but have not yet elected to retire, a lifetime retirement benefit may be payable to your surviving spouse or domestic partner. The benefit is calculated as though you had elected to retire on the day after the date of death. If you die before you are eligible to retire, it looks like survivors get 15% of salary, but I’m not sure how that would apply to me. H doesn't have a rich uncle, unfortunately, and though his parents are doing well, I'm sure any extra money there is going to their retirement.
So it's not a huge amount by any means, but it would be something to add to my retirement bucket. I just started a job with a pension. I don't know if I'll be able to stay at this job for the long, long term (the cost of living is so high here), but I will stay long enough to be vested and to add that to my retirement bucket as well. I am confident in my money managing abilities and I'm super frugal. H, on the other hand, never wanted to look at expenses or make a budget. It's been freeing to finally be able to manage my own finances!
