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Five ways to make early retirement work for you

Retiring before 65? Learn how to make the most of your early retirement pension.

You can retire and start collecting your pension as early as age 55. However, if you leave your job before age 65, your pension may be reduced. Follow these tips to make an early retirement pension work for you.

1. Make an informed decision

Retirement rules can be complex, but you don’t need to be an expert to estimate your monthly pension payment. Sign in to My Account and use the personalized pension estimator to see what your pension will look like at any retirement age.

Save or print your estimate and take it to your financial adviser. They can help you understand how an early retirement pension fits into your financial picture.

2. Top up your contributory service

Your age isn’t the only factor that determines the reduction to your pension; it also depends on your years of contributory service. You get one month of contributory service for every month you contribute to the plan.

You may be able to increase your contributory service by:

  • Buying service for a leave of absence
  • Transferring service worked for another plan
  • Claiming a child-rearing credit

3. Learn what a pension reduction means for you

Your pension may be reduced if you retire before 65. The amount of the reduction depends on your age and your years of service.

Reduction rules are different for service earned before and after January 1, 2018. In some situations, only part of your pension may be reduced. Your earliest unreduced date, shown on your Member’s Benefit Statement, is the date when all parts of your pension are unreduced.

To see how reduction rates affect you, try running estimates through the personalized pension estimator for dates before and after your earliest unreduced date. The difference may be less than you thought.

4. Front load your pension with a temporary annuity

If you retire before 65, you can choose to take a temporary annuity (TA). A TA front loads your pension; you get more money upfront, but after age 65, your pension drops permanently.

Taking a TA may also permanently reduce any death benefit your spouse or beneficiary is entitled to after you pass away.

Talk to your financial adviser to understand if this option is right for you.

5. Consider the big picture

Your pension may not be your only source of income after retirement. Consider how an early retirement pension fits with your personal savings and any government benefits you may be eligible to receive.