Math in the Workplace: Overview

Math in the Workplace - Numbers & Operations

Problem:

A person who has worked for 25 years and 3 months retires on January 1, 1999. They have been earning $14.75 per hour for the last four years, which has also been their top hourly pay. Their current age is sixty-five.

They have looked up the base period in a table and found it is 48 months and the multiplier is 1.917%. What is their monthly retirement benefit?

Your retirement benefits are based on your highest average monthly salary over a base period and your total months of credited service.

^{(Average Monthly Salary during base period) x (Multiplier) x (Months of Service) = (Annual Benefit) 12 months = Monthly Benefit}

Solution:

1. Calculate the average monthly salary.

40 hours/week x 52 weeks/year = 2,080 hours/year

2,080 hrs/yr x $14.75 per hr 12 months

= $2,556.67 average/month

2. Calculate the number of months of service

25 years x 12 months/year + 3 months = 303 months
 

3. Calculate the monthly benefit using the benefit formula.

$2,556.67 x 1.917% x 303 months 12 months

= $1,237.54

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* This is the basic retirement benefit calculation for general members of the Idaho Public Employees Retirement System.

Math in the Workplace: Overview