Break-Even Calculator
Deciding When to Collect
Choosing the best time to start your PERA benefit doesn't have to be complicated.
This calculator is used by members terminating public employment and deciding between:
- Option 1: Start the PERA benefit early, or
- Option 2: Wait and collect the benefit later.
The break-even point is a useful tool, but factors like your health, financial goals, and other income sources should also be part of your retirement decision.
What is a break-even point?
The break-even is the point at which collecting the benefit early versus at a later date reaches the same total payout amount.
- If you have concerns you may not live beyond your break-even point, starting your benefit early may make more sense, allowing you to enjoy your monthly benefit sooner.
- If you expect to live beyond the break-even point, starting your benefit later may be a good fit because you'll receive more monthly benefits during your lifetime.
How does it work?
- Estimate your monthly benefit at different ages by using the retirement calculator in your myPERA account. Remember to use the same termination date for both benefit estimates.
- Use the break-even calculator and enter:
- Your early begin date and early benefit amount (Option 1)
- Your later begin date and later benefit amount (Option 2)
- Review the break-even results. The calculator will list:
- The difference between benefit amounts
- The length of time between benefit dates
- The accumulated amount you receive from the early benefit date up to the later date
- The break-even point
- Analyze the results. Add the break-event point to your later begin date (Option 2) to find how long you will need to collect benefits to receive an equal payout whether you start your benefit early or later.
Examples
Example 1: Age 55 vs. Age 62
Kelly ended public service at age 55. She is deciding if she should start her PERA benefit now or wait and start her benefit at age 62.
Option 1: Age 55
- Benefit Begin Date: September 2025
- Monthly Benefit Amount: $1,000
Option 2: Age 62
- Benefit Begin Date: September 2032
- Monthly Benefit Amount: $1,820
Break-Even Results
- Difference Between Benefit Amounts: $820
- Length of Time Between Benefit Dates: 84 months
- Option 1 Accumulated Amount (up to Option 1 Benefit Begin Date): $84,000
- Break-Event Point: 102 months, or 8.5 years
Analyze the Results
Add the break-even point to the later begin date: 8.5+62=70.5. Kelly will break even at age 70.5. In other words, Kelly must receive $1,820 each month for at least 102 months (8.5 years) for the delayed benefit be the better option.
Example 2: Age 65 vs. Age 66
Bill ended public employment at age 65. He is deciding if he should start his PERA benefit now or wait and start his benefit at age 66, his full retirement age.
Benefits do not increase after your full retirement age, so it may not be in Bill's best interest to start his benefit after age 66.
Option 1: Age 65
- Benefit Begin Date: June 2025
- Monthly Benefit Amount: $2,300
Option 2: Age 66
- Benefit Begin Date: June 2026
- Monthly Benefit Amount: $2,530
Break-Even Results
- Difference Between Benefit Amounts: $230
- Length of Time Between Benefit Dates: 12 months
- Option 1 Accumulated Amount (up to Option 1 Benefit Begin Date): $27,600
- Break-Event Point: 120 months, or 10 years
Analyze the Results
Add the break-even point to the future retirement date: 10+66=76. Bill will break even at age 76. In other words, Bill must receive $2,530 each month for at least 120 months (10 years) for the delayed benefit to be the better option.
Example 3: Rule of 90 vs. Age 65
Jane started public employment prior to July 1, 1989 and is eligible for pre-89 benefits. She ended public employment at age 60 when her age (60) plus years of service (30) equals 90. She is deciding if she should start her PERA benefit now or wait and collect her benefit at her full retirement age of 65.
Option 1: Rule of 90
- Benefit Begin Date: November 2025
- Monthly Benefit Amount: $3,000
Option 2: Age 65
- Benefit Begin Date: November 2030
- Monthly Benefit Amount: $3,326
Break-Even Results
- Difference Between Benefit Amounts: $326
- Length of Time Between Benefit Dates: 60 months
- Option 1 Accumulated Amount (up to Option 1 benefit begin date): $180,000
- Break-Event Point: 552 months, or 46 years
Analyze the Results
Add the break-even point to the future retirement date: 46+65=111. Jane wouldn't break even until age 111.
Disclaimer
This website content (including the calculator) provides general information for educational purposes and should not be construed as legal or financial advice. The statutes, rules, and regulations governing PERA may change at any time. If there is a discrepancy between the law and this website content, the law will govern.