Taking time off while under a pension system?

[kevj1085]

My wife and I both work under a state retirement pension system and I'm not quite sure how this predicament works that we are in. Currently we are in a financial situation where technically she could stay home indefinitely, but at least for sure until our 3 and 1 year old are in a grade where they can bike home and be self sufficient until we get home. All would be fine w her staying home now except if she takes say 10 years off doesn't that mean she would have to work 10 more years to make up for that in the pension system? I feel it wouldn't be fair to her for me to retire at 52 while she has to work til 62 to get the same benefits just because she took years off to support our kids. However, we will need her pension in addition to mine so it will have to happen somehow. A co worker told me she doesn't think the 10 years matters so much because as long as she still has a retirement account and doesn't cash it out, her age will play a bigger factor with time. Anyone know how this works?

[Blatant]

It will be individual to your system; I doubt anyone here has enough specific info. You know who does? Your state retirement administration. Call them and ask.

[sparkytheop]

It definitely depends on the system.  Obviously, she's likely to get more out of a pension if she's not missing 10 years, however, that doesn't necessarily mean she'll have to work 10 years longer just to get a pension.

My minimum retirement age is 57, as long as I have 25 years in, so I have to work until age 57 to get my full pension, barring a special event allowing me to retire earlier without being penalized.  At 57, I'll have 36 years in, so I could leave for 10 years in the middle, and still retire at 57, but I'd lose 10 years of my calculations (.1% of high three x # of years served).

[Dee18]

Where I work the pension was just closed to new hires.  So if I were to take several years off, I would not be able to rejoin the system.  I would factor into your evaluation whether the system she is in is underfunded.  If so, it may be significantly changed in the coming years.

[DailyGrindFree]

In short, every state retirement is different and you should call your state's retirement admin or check their web site for rules/calculations.

[aceyou]

My wife and I both bought 5 years so we are eligible to retire with our pension at age 48 instead of 52.  Look into whether you can buy years and how much they cost.  They may often be purchased with pretax money, and you can sometimes just pay for them out of your 403 or 457 account. 

[Retire-Canada]

My GF can't take time off [beyond paid holidays and sick leave] without it affecting her pension. To get the same benefits she's have to work an extra 6 months if she took 6 months off. If she took 10yrs off she may well not get the same pension benefits at all since she'd be starting from scratch.

That's why they call pensions "The Golden Handcuffs".

If she has to work extra years you can also work extra years and bank the extra savings to make up for her lower pension benefits. That way if she stays home for 10yrs you each may only have to work an extra 5yrs to get back to the same income in retirement.