I plan to retire in two years. What should I do to prepare and when should I do it?
It's never too early to begin preparing and we're here to help. Be sure to take a look at our checklist of retirement planning steps
that includes not only the "what," but also the "when."
When am I considered retired?
You're considered retired once you begin receiving a retirement benefit. This is usually the first of the month after
the month you've separated from employment.
If you separate from employment, but wait to start drawing a benefit, you'll be considered retired once you do begin receiving it.
When can I withdraw my defined contribution funds from my Plan 3 account?
Once you're no longer working in a position that is covered by SERS, you can withdraw your contributions at any time. Federal income
taxes and penalties may apply, so you may want to check with a tax advisor before requesting a withdrawal.
You can also leave your contributions in your Plan 3 account, where they will continue earning money. Learn more about your options by calling ICMA-RC at 1-888-711-8773 or reading our booklet Plan 3 Request for Payment of Defined Contribution Funds, available online or from your payroll or personnel officer.
I'm close to retiring. Can I increase the amount I contribute to my DCP account?
There are two catch-up options you can use to defer additional money to your DCP account. For details, call us at 1-888-327-5596 and select
option 2.
How long will my benefit last?
As a Plan 3 member, you have a two-part retirement benefit. The defined benefit portion, funded by your employer, guarantees you a
benefit for your lifetime and, if you choose a survivor option, for the lifetime of your survivor. The defined contribution portion,
funded by your contributions, provides a benefit that is based on investment performance.
Once you separate from your employer, you can choose how you would like to receive the defined contribution portion. The option you choose determines how long you will receive payments.
To learn more about your options for receiving your defined contributions, register for a one-hour Distribution Seminar or contact a Plan 3 representative toll-free at 1-888-711-8773. Your options are also described online in the Plan 3 Request for Payment of Defined Contribution Funds booklet.
Once I retire, when will I get my first benefit check?
You should receive your first benefit payment by the last working day of the month you retire, or a few days after. For example, if you retire on
March 1 and the last working day of the month is March 31, you should receive your payment (by check or direct deposit to your bank account ) by
March 31 or shortly after. See "When am I considered retired?"
If you've arranged for direct deposit, your first payment may be mailed to your bank. All payments after that will be electronically transferred to your account.
We're only able to send your check to one bank account. If you would like your payment deposited in two accounts, be sure to arrange with your bank for an automatic transfer of funds.
What kinds of deductions can be taken from my benefit?
Deductions to your retirement benefit check can include:
The good news is – some of the payroll deductions you currently see (Social Security, Medicare) will not be taken from your retirement benefit.
When is the earliest I can start receiving my benefit?
It depends on your age and your service credit.
You can begin drawing your full (not reduced for early retirement) defined benefit when you are at least age 65 and have:
You can begin drawing a reduced benefit when you are at least age 55 and have:
Your Plan 3 handbook contains more specific information.
If you are a school district employee, you can retire earlier by forfeiting up to 45 days of sick leave. For example, if you have 45 days of sick leave and are age 65 or older, you may retire with four years and 10 months of service credit. (If you've cashed out the sick leave, however, you can't use it for this purpose.)
The sick leave won't be a part of your benefit calculation. If you plan to use sick leave to retire earlier, please call us before you leave your position.
When I retire, what will my monthly benefit be and how will it be calculated?
You can use our online service to estimate your benefit or, if you are within two years of retirement, please call us
at (360) 664-7000 or 1-800-547-6657 to request a written estimate. Here is the formula we will use to calculate your monthly
benefit:
1 percent x Average Final Compensation x Service Credit Years x Early Retirement Factor (if applicable) = Monthly Benefit
Members sometimes think there is a cap on the amount of service credit used in Plan 3 benefit calculations. There is not. All of your service credit will be used in the calculation.
How do I calculate my Average Final Compensation (AFC)?
Average your monthly salary from the highest-paid 60 consecutive months in which you earned service credit, no matter when that
is in your career. Your AFC does not include severance pay, such as lump-sum payments for deferred sick leave, vacation, or annual leave.
When I cash out my annual leave or roll it over, will the cash out be included in my benefit calculation?
Cash outs are not included in your benefit calculation.
How do I decide which benefit option to choose?
Each option has both benefits and consequences you will need to evaluate. Before making a decision, it's a good idea to consult a licensed tax
advisor, estate planner, or financial planner who specializes in retirement law and planning.
You'll want to consider the following:
Do I need to make an appointment with a benefits counselor at DRS or can I start the retirement process over
the phone?
We're always glad to meet and help you in person, but there's no requirement to come in and talk with a Retirement Services Analyst (RSA). You can
easily start the retirement process over the phone and complete it through the mail.
If you prefer to talk with an RSA in person, just call us for an appointment. It works best if you first request an estimate and retirement packet and have enough time to look it over before making an appointment. That will give your RSA specific information to go over with you and also ensure your questions are answered.
You can reach us at (360) 664-7000 or toll free (outside the Olympia area) 1-800-547-6657. Here are directions and a map to DRS.
I received a letter that says you have my application. When will I hear from you again?
During the month of your retirement, we will send you a letter with the amount of your benefit and the date you can expect to receive your first
payment. Any time you have questions, be sure to call.
I plan to move out of the country (or state) after retirement. Are there any special considerations I should be aware of?
Here are a few things to consider when moving outside the country or state:
Can service credit I earned in another state be used to qualify for retirement?
Your retirement system does not accept service credit from other states.
How does membership in another system affect my retirement?
If you're an active member in any of the retirement systems listed below and you once belonged to another of these systems, you may be eligible for
benefits as a "dual member."
There are three advantages to being a dual member:
To find out more about retiring as a dual member, see What is dual membership and how does it affect me?
If you were a member of SCERS, please call us at (360) 664-7000 or 1-800-547-6657 for information about dual membership with SCERS.