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You can look forward to a fixed 3% increase in your pension payment amount (not to exceed $25 per month or $300 annually) beginning the second October after your retirement effective date. For example, if your retirement effective date is Dec. 1, 2023, your first increase will be in October 2025.Your post-retirement increase doesn't compound, but it does accumulate. So, assuming you're eligible for the maximum increase, every October you can expect $25 more per month than you received during the previous year.
|Example of a Post-Retirement Increase|
Mr. Garcias retired Dec. 1, 2023, with a monthly pension payment of $1,200. Beginning October 2025 (the first October after he's been retired a full year) he'll begin receiving an additional $25 per month. (Though 3% of $1,200 is $36, the post-retirement increase is capped by law at $25 per month.)
The first October, Mr. Garcias will receive $1,225 ($1,200 + $25).
The next October, Mr. Garcias will receive $1,250 ($1,200 + $25 +$25).
The third October, Mr. Garcias will receive $1,275 ($1,200 + $25 +$25 +$25), and so on.