Hi Crossley, thank you for your query. In your CSS, there are two different calculations to determine your potential CPI indexed pension – deferred benefit (before minimum retiring age) and age retirement.
Neither calculation is always better than the other; it depends on your personal situation, needs and financial goals.
If you wish to retire at your minimum retirement age (usually age 55), you may receive a higher pension benefit from CSS if you resign and preserve your benefit a few days before then. This option is commonly known as ‘54/11’.
Investment returns will affect your pension as it is based on a formula using your accumulated basic contributions of your lump sum. The earning rate applied is that on the day your benefit application is processed. So if you consider this option, please also consider current investment performance.
But remember, you do not need to claim your CSS benefit immeditately - you can do so at any time between your 55th and 65th birthday.
As CSS is an indexed (defined benefit) pension, you will need to speak to a CSS specialist in regards to your retirement options as they use a very specific formula to calculate your benefits based on a number of factors. On the CSS website, there is an i-Estimator calculator that enables you to project your potential final CSS benefit. It is a member only link which I have provided below:-
By Ken Ngeow CFP®