Consider Different Factors Carefully Before Accepting An Early Retirement Incentive Plan

The month of December in the year 1986 saw a law being enacted that allowed public employers to offer their employees with an early retirement incentive plan known as the retirement incentive plan or ERIP. The basic aim of this law is to permit states and local governments to purchase as many as twenty percent of the employee Public Employees Retirement System or PERS service credit and failing that, to purchase 5 years of the PERS of the employee whichever happens to be lesser.

Replacing Employees

Many employers of course use the early retirement incentive as a means of replacing their employees rather than as a means to provide the outgoing employee with regular income and an easy retirement option. To get the most out of your early retirement it is therefore necessary that you first of all weigh the pros and cons of this act and also learn everything that there is to know regarding the early retirement incentive being offered to you by your employer.

It is also necessary to realize that an early retirement incentive will give you entitlement to get all the benefits that you would get upon retiring at the full retirement age. This means that you will still get to enjoy Social Security and Medicare benefits. However, a few different factors can and will influence your decision regarding whether to accept or reject an early retirement incentive plan.

First and foremost, you need to realize that early retirement means suffering a loss in income. On the other hand, early retirement allows you to have more free time to do as you wish and to relax after having spent long years in working at your job. At the same time there is something that might make people reject an early retirement incentive program and that is that it would mean that they would have to leave their profession that has for so long provided them with so much satisfaction and joy. There is a lot of social satisfaction that a job provides that no early retirement incentive however attractive it may be can hope to match.

Only people that meet certain requirements will be eligible for voluntary early retirement and these requirements have to do with age as well as service. So, people that are at least fifty years old and who can show twenty years of creditable employment service will qualify while others that cannot show these may not get to enjoy this form of early retirement.