When Will I Get My First Pension Check in Massachusetts?

One of the biggest surprises and sometimes even a reason people delay retirement for state and town employees in Massachusetts is that your pension check doesn’t show up right away. In most cases, it takes 30 to 60 days or more after your official retirement date for your first payment to arrive.

The delay happens because your employer has to send in your final payroll information before the Massachusetts Retirement System can finish calculating your pension. This information includes your last salary details, any unused vacation time, sick leave buyback, and overtime. Until all of this is processed, you may only receive an estimated payment. That is why your first few checks may look a little “off.” Once everything is finalized, your pension amount is corrected and brought up to the right number.

Can some money arrive sooner?

Some money may arrive sooner than your pension. Vacation payouts are often issued in a lump sum with or shortly after your final paycheck. Sick leave buybacks depend on your employer’s policy, but in many cases a percentage of unused sick days can be cashed out. These payments can provide immediate income and may also increase your “highest three years” of salary, which is used in your pension formula. If you prefer, you can also roll these payouts into the SMART Plan for flexibility and potential tax advantages.

SMART Plan

The SMART Plan is Massachusetts’ deferred compensation program, and it can be one of the ways to cover the gap between your last paycheck and your first pension check. The money in the SMART Plan can be accessed as soon as you retire, no matter your age, and you won’t face the 10 percent early withdrawal penalty that applies to other retirement accounts. Withdrawals are flexible, which means you decide when and how much to take. Many retirees also choose to defer their vacation or sick leave payouts into the SMART Plan at retirement so they have an extra cushion to draw from.

Bridge the income gap

Depending on your age and resources, there are several ways to bridge the gap. Some retirees rely on personal savings, which is the simplest method and often comes with no tax consequences. Others use their vacation or sick payouts to provide cash while waiting for their pension to begin. The SMART Plan is another option, since it is available immediately at retirement and can be used penalty-free, though withdrawals are usually taxable. If you are 59½ or older, you can also use funds from a 403(b) or IRA without penalty, although income taxes may still apply.

Planning Ahead

Your first Massachusetts pension check usually arrives one to two months after retirement, and the first few payments may be estimates until everything is finalized. By planning ahead and making use of vacation payouts, sick leave buybacks, the SMART Plan, and other savings and investments, you can seek to comfortably bridge the gap and start retirement with confidence.

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