1. What is Tier 6 Pension?

Tier 6 pension refers to retirement benefits under various US public employee retirement systems, typically featuring a 1.66% multiplier for each year of service applied to final average earnings.

2. How Does the Calculator Work?

The calculator uses the Tier 6 pension formula:

Where:

• \( YS \) — Years of Service
• \( FAE \) — Final Average Earnings (USD)
• \( 1.66\% \) — Annual pension multiplier

Explanation: The formula calculates annual pension by multiplying 1.66% times years of service times final average earnings.

3. Importance of Pension Calculation

Details: Accurate pension estimation is crucial for retirement planning, financial security assessment, and making informed decisions about retirement timing and benefits.

4. Using the Calculator

Tips: Enter years of service (can include decimal values for partial years) and final average earnings in USD. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is Final Average Earnings (FAE)?
A: FAE typically represents the average of your highest consecutive earnings over a specified period (often 3-5 years) before retirement.

Q2: Are there maximum service years for Tier 6?
A: Most systems have maximum service credit limits, often around 30-35 years, but this varies by specific retirement system.

Q3: Does Tier 6 include cost-of-living adjustments?
A: COLA provisions vary by system. Some Tier 6 plans have limited or no automatic COLAs, while others may offer periodic adjustments.

Q4: Can I purchase additional service credit?
A: Many systems allow purchasing additional service credit for previous public service, military service, or unpaid leaves, subject to specific rules.

Q5: How does early retirement affect Tier 6 benefits?
A: Early retirement typically results in reduced benefits. Reduction factors vary by system and are based on how early you retire before normal retirement age.