What Is the Full Retirement Age in New York State?

Retirement age is a significant milestone, influencing when one can cease regular employment and begin drawing benefits. Different programs and retirement systems establish their own age criteria, impacting income timing and amount. Navigating these requirements helps individuals make informed decisions about their retirement timeline.

Full Retirement Age for Social Security

Social Security benefits are a foundational component of retirement income. The Full Retirement Age (FRA) is central to determining the standard benefit amount. FRA is the age at which a person becomes eligible for 100% of their primary insurance amount (PIA).

The Full Retirement Age (FRA) depends on birth year, as detailed in the table below.

| Year of Birth | Full Retirement Age |
| :———— | :—————— |
| 1937 or earlier | 65 years |
| 1938 | 65 years and 2 months |
| 1939 | 65 years and 4 months |
| 1940 | 65 years and 6 months |
| 1941 | 65 years and 8 months |
| 1942 | 65 years and 10 months |
| 1943-1954 | 66 years |
| 1955 | 66 years and 2 months |
| 1956 | 66 years and 4 months |
| 1957 | 66 years and 6 months |
| 1958 | 66 years and 8 months |
| 1959 | 66 years and 10 months |
| 1960 and later | 67 years |

Claiming Social Security benefits before FRA results in a permanent reduction of the monthly benefit. The reduction percentage varies based on how many months early benefits are claimed, with a 30% reduction for those with an FRA of 67 who claim at age 62.

For early claiming, the benefit is reduced by 5/9 of 1% per month up to 36 months before FRA. Beyond 36 months, an additional 5/12 of 1% reduction applies per month. The earlier one claims, the greater the permanent decrease.

Delaying Social Security benefits beyond FRA can lead to increased monthly payments, known as Delayed Retirement Credits (DRCs). These credits apply for each month benefits are deferred past FRA, up to age 70. No additional benefit increase occurs for delaying beyond age 70.

For individuals born in 1943 or later, Delayed Retirement Credits accrue at an annual increase of 8% for each year benefits are delayed past FRA, up to age 70. This translates to an increase of 2/3 of 1% per month of delay. For example, an individual with an FRA of 67 delaying until age 70 would see their monthly benefit increase by 24%.

These credits ensure individuals who continue working or wait receive a higher monthly payout. Understanding these adjustments is important for maximizing Social Security income.

New York State Public Employee Retirement Systems

Public employees in New York State typically participate in distinct state or city retirement systems. These systems have their own eligibility rules, service requirements, and definitions of “full retirement age” or “service retirement age,” generally based on years of service and an employee’s “tier membership.”

The New York State and Local Retirement System (NYSLRS) covers state and local government employees. NYSLRS comprises the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS). Both systems have multiple tiers with varying age and service requirements for unreduced benefits.

The New York State Teachers’ Retirement System (NYSTRS) provides benefits for public school teachers statewide. NYSTRS has tiers dictating eligibility for full retirement benefits, based on age and credited service. These tiers typically require a minimum number of years of service for vesting.

New York City employees are primarily covered by the New York City Employees’ Retirement System (NYCERS). NYCERS has unique rules for service retirement eligibility based on an employee’s tier and years of service. Other systems exist for New York City uniformed services, including Police and Fire Department Pension Funds.

These state and city retirement systems provide defined benefits or contributions to public sector workers. The age for unreduced pension varies by tier, determined by employment date and years of contribution.

New York State Taxation of Retirement Income

New York State generally exempts Social Security benefits from state income tax. While federal tax may apply based on combined income, New York State does not tax these payments.

Pensions from New York State, its localities, or the federal government are generally exempt from state income tax, including those from the New York State and Local Retirement System, the New York State Teachers’ Retirement System, federal civil service, and military retirement pay.

Private pensions and annuities are generally taxable by New York State. However, New York offers a pension and annuity exclusion of up to $20,000 per eligible taxpayer annually, covering payments from 401(k)s, 403(b)s, and traditional IRAs.

This exclusion applies to private pensions, annuities, and IRA distributions for individuals aged 59 1/2 or older. Only income exceeding $20,000 is taxable. For married taxpayers filing jointly, the $20,000 exclusion is available per spouse, potentially allowing a total exclusion of up to $40,000.

Distributions from Roth IRAs and Roth 401(k)s are generally tax-free in New York State, mirroring federal treatment if qualified.