When you can retire early
Any Group C member: age 55 with at least 5 years of service, if you don't yet meet the rules for an unreduced benefit. Group C #2 handout, p. 1, Early Retirement; 16 V.S.A. § 1937(f)(2); 2025 valuation, p. 58, Exhibit H (Group C: age 55 with 5 years)
Group C #1: 6% a year
The benefit is reduced by 6% for each year you are under age 62 (1/2% for each month). Months are counted from your age in years and months at retirement: the handout's member aged 58 and 3 months is 45 months under 62, a factor of .775. Group C #1 handout, p. 1, Early Retirement, and p. 3 (6% for every year under 62, or 1/2% for every month); 16 V.S.A. § 1937(g)(1); 2025 valuation, p. 59, Exhibit H; Treasurer, Pension Group Plan Comparison (Mar. 16, 2021), p. 5
| Retire at | Months under 62 | Cut | Factor |
|---|---|---|---|
| 55 | 84 | 42% | 0.58 |
| 56 | 72 | 36% | 0.64 |
| 57 | 60 | 30% | 0.7 |
| 58 | 48 | 24% | 0.76 |
| 59 | 36 | 18% | 0.82 |
| 60 | 24 | 12% | 0.88 |
| 61 | 12 | 6% | 0.94 |
| 62 | 0 | none | 1 |
Group C #2: an actuarial cut
Figured like a normal benefit, then an actuarial reduction is applied for each month you are under age 65. The handout's member aged 58 and 3 months (81 months under 65) has a factor of .555434. VSTRS publishes no full factor table; the 2026 comparison chart says only "Varies". Group C #2 handout, p. 1, Early Retirement (an actuarial reduction is made for each month under the age of 65), and p. 3; 16 V.S.A. § 1937(g)(2); 2025 valuation, p. 59, Exhibit H; Vermont Retirement Systems Defined Benefit Plan Comparison Chart (Apr. 9, 2026), p. 1 (Early Retirement Reduction: Varies)
That one factor means about 44.5% less at that age, much more than Group C #1's cut at the same age (22.5%). Group C #2's cut counts to 65, not 62.
For Group C #2, VSTRS cuts an early benefit by an actuarial amount for each month you are under 65. It publishes only one example factor: .555434 at age 58 and 3 months.
We show your unreduced amount. We compute the reduced amount only at that published age, or with a factor you type in from your VSTRS estimate.
Group C #2 handout, pp. 1, 3Group C #2 early reduction: the handout says the actuarial reduction is applied for each month under age 65. The valuation says 'from normal retirement age', which for a rule-of-90 member could be earlier than 65. Handout followed: the engine counts months under 65.
Group C #2 handout, pp. 1, 3; 2025 valuation, p. 59, Exhibit H; 16 V.S.A. § 1937(g)(2)Two more things to know
- Your cost-of-living increases wait until the January after you reach 62 (Group C #1) or 65 (Group C #2). Group C #1 handout, p. 6, COLA (the January after attaining the age of 62); Group C #2 handout, p. 6, COLA (the January after attaining the age of 65); 16 V.S.A. § 1949(c)(3); 2025 valuation, p. 61, Exhibit H
- If you retire before 62, the Level Income Option can raise your check until Social Security starts. See Payment options.
What the sources say
- Any Group C member can retire early from age 55 with at least 5 years of service.Group C #2 handout, p. 1; Group C #1 handout, p. 1; 16 V.S.A. § 1937(f)
- Group C #1: your benefit is cut by 6% for each year you are under 62 (1/2% a month). The handout's example: age 58 and 3 months is 45 months early, so the benefit is multiplied by .775.Group C #1 handout, p. 3, Early Retirement; 16 V.S.A. § 1937(g)(1)
- Check with VSTRSGroup C #2: your benefit is figured like a normal one, then an actuarial reduction is applied for each month you are under 65. VSTRS publishes only one example factor: .555434 at age 58 and 3 months (about 44% less). For any other age, ask VSTRS for an estimate.Group C #2 handout, pp. 1, 3, Early Retirement; 16 V.S.A. § 1937(g)(2)No full Group C #2 factor table is published.
- Check with VSTRSGroup A members can retire early from age 55 with an actuarial reduction VSTRS does not publish.16 V.S.A. § 1937(d)-(e)No Group A factors are published.
- If you retire early, cost-of-living adjustments start the January after you reach 62 (Group C #1) or 65 (Group C #2).Group C #1 handout, p. 6; Group C #2 handout, p. 6; 16 V.S.A. § 1949(c)(3)
The cut depends on which group you are in, so check that first. A survivor payment option lowers the check again, and one more year of work can shrink or remove the cut. The calculator shows your check at every age.
Questions
How much is my VSTRS pension reduced if I retire early?
Group C #1: 6% for each year you are under 62 (1/2% a month), so retiring at 55 cuts it by 42%. Group C #2: an actuarial cut for each month you are under 65; the Treasurer's one example is a factor of 0.555434 at age 58 and 3 months, about 44.5% less.
What is the earliest I can retire from VSTRS?
Age 55 with at least 5 years of service, in either Group C.
Does the reduction ever go away?
No. The early-retirement reduction is permanent. Cost-of-living increases for early retirees start the January after you reach 62 (Group C #1) or 65 (Group C #2).
Source: VSTRS Eligibility for Retirement: Group C #2 handout (Office of the State Treasurer), undated (PDF of Sept. 21, 2012), with 16 V.S.A. chapter 55 as of the 2026 session, pp. 1, 3, 6; Group C #1 handout pp. 1, 3, 6; 2025 valuation pp. 58, 59, 61; Vermont Retirement Systems Defined Benefit Plan Comparison Chart p. 1; 16 V.S.A. §§ 1937, 1949. Last reviewed .