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85 Year Rule:
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The 85 Year Rule is a retirement eligibility formula used by many pension plans. It states that when an employee's age plus years of service equals 85 or more, they become eligible for full retirement benefits without any reduction.
The calculator uses the simple formula:
Where:
Explanation: If the total equals or exceeds 85, the individual meets the rule criteria for full retirement benefits.
Details: This rule is significant for retirement planning as it determines when employees can retire with full pension benefits. It provides a clear benchmark for retirement eligibility in many organizations.
Tips: Enter your current age in years and total years of service. Both values must be positive numbers. The calculator will determine if you meet the 85 year rule criteria.
Q1: Is the 85 year rule used by all pension plans?
A: No, this rule is specific to certain pension plans, particularly in public sector and some corporate plans. Always check your specific plan details.
Q2: What happens if I don't meet the 85 year rule?
A: If you don't meet the rule, you may still be able to retire but possibly with reduced benefits or early retirement penalties.
Q3: Does part-time service count toward the rule?
A: This varies by plan. Some plans prorate part-time service, while others may count it differently. Consult your plan administrator.
Q4: Can I use this calculator for Social Security benefits?
A: No, this calculator is specifically for pension plans that use the 85 year rule. Social Security has different eligibility requirements.
Q5: What if I exceed the 85 year rule?
A: Exceeding the rule typically doesn't provide additional benefits beyond full retirement eligibility. Benefits are usually based on your years of service and final salary.