Retirement Benefit Calculation

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Your IPERS retirement benefit is guaranteed because it is calculated with a formula that includes your age, average salary and years of work in IPERS-covered employment. The longer you work in IPERS-covered employment, the larger your retirement benefit.

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Regular Members 

Your IPERS retirement benefit is calculated using this formula:

benefit calculation graphic

 

YOUR AVERAGE SALARY is the average of your highest five years’ salaries. These don’t have to be the five years that immediately precede your retirement.

THE MULTIPLIER increases two percentage points each year you work in IPERS-covered employment up to year 30. From year 31 to 35, the multiplier increases one percentage point each year. The maximum multiplier is 65% at 35 years in covered employment. 

At retirement, you may “purchase service” — or buy work time — to increase your multiplier.

A REDUCTION is applied if you retire before you reach a normal retirement age. IPERS will reduce your retirement benefit by 0.5% for each month (or 6% annually) that you receive retirement benefits before age 65.

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Multiplier chart for regular members
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Special Service Members


Your IPERS retirement benefit is calculated using this formula:

benefit calculation for Special Service members


YOUR AVERAGE SALARY is the average of your highest three years’ salaries. These don’t have to be the three years that immediately precede your retirement.

THE MULTIPLIER increases each year you work in IPERS-covered employment. The maximum multiplier is 72% at 30 years in covered employment.

At retirement, you may “purchase service” — or buy work time — to increase your multiplier.

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Multiplier chart for special service members

Early Retirement 

If all of your IPERS-covered jobs are considered Special Service, your benefit is not reduced for early retirement. If you work in a Regular IPERS-covered position at any point in your career, a hybrid formula may be used to calculate your benefit, in which case your benefit may be reduced for early retirement.