Form of Benefit Payments
When you retire, you will receive your benefit in monthly payments for your lifetime. If you die after payments begin, your eligible surviving spouse will receive 60 percent of the benefit you were receiving when you died. If you take early retirement, you have the option of choosing the level income payment option described below.
Level Income Payment Option
The level income payment option is a payment option you may elect if you retire early (between ages 55 and 62) and decide to receive retirement benefit payments immediately. The level income payment option increases the amount of the monthly payment through the month of your 62nd birthday, at which time you are eligible to receive Social Security benefits. The month following your 62nd birthday, the payment from SDRS will decrease, but your replacement income from both SDRS payments and Social Security benefits will remain essentially the same as what you had been receiving from SDRS alone under the level income payment option.
The value of your future lifetime benefits under the level income payment option is expected to equal the value of your normal lifetime payments. This option just provides a higher SDRS payment until age 62 when you are eligible to receive Social Security benefits.
Some additional points to consider:
- If you retire and plan to return to work in SDRS covered employment, the level income option may not be a good choice. If you retire with reduced or unreduced benefits, the benefit suspensions and/or benefit reductions during the reemployment period may distort the higher pre-age 62 payments. .
- In addition, the level income payment option significantly reduces the survivor benefit payable after age 62.
Like all monthly benefits payable from SDRS, benefits under the level income payment option are protected against inflation under the provisions of the SDRS cost-of-living adjustment.
Portable Retirement Option
The SDRS portable retirement option (refund) gives you a choice of taking your accumulated contributions instead of monthly SDRS lifetime retirement benefits. However, the lifetime value of your SDRS monthly benefits may be worth considerably more than your accumulated contributions.