LIFETIME RETIREMENT PLANNING

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Retirement planning frequently asked questions

Public Employees' Retirement System (PERS) Plan 1

  1. 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."

  2. 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.

  3. 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.

  4. How long will my benefit last?

    You are guaranteed a retirement benefit for your lifetime and, if you choose a survivor option, for the lifetime of your survivor.

  5. 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.

  6. What kinds of deductions can be taken from my benefit?

    Deductions to your retirement benefit check can include:

    • Income tax authorized by the withholding form you submit with your retirement application
    • Health insurance premiums
    • Life insurance premiums
    • Combined Fund Drive contributions
    • Dues for retiree organizations
    • Any other approved deductions

    The good news is – some of the payroll deductions you currently see (Social Security, Medicare) will not be taken from your retirement benefit.

  7. When is the earliest I can start receiving my benefit?

    It depends on your age and your service credit.

    If you work until you begin drawing your benefit (you must work the month immediately before), you can retire at:

    • Any age with 30 or more years of service credit, or
    • Age 55 with 25 or more years of service credit, or
    • Age 60 with five or more years of service credit.

    If you separate from employment and wait to begin drawing your benefit, you can retire at:

    • Age 65 with five or more years of service credit, or
    • Age 60 with five or more years of service credit (benefit is reduced), or
    • Age 60 or older (full benefit), if you separated from service on or after January 1, 2002, and were at least age 50 at separation, with at least 20 years of service credit.
  8. 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:

    2 percent x Average Final Compensation x Service Credit Years (maximum of 30 years) = Monthly Benefit

    If you began employment on or before April 25, 1973, a different formula may apply. We'll calculate your benefit under both formulas and use the one that gives you the highest amount.

  9. How do I calculate my Average Final Compensation (AFC)?

    Average your monthly salary from the highest-paid 24 consecutive months in which you earned service credit, no matter when that is in your career. You may be able to include a leave cash out in your AFC. To learn more, see When I cash out my annual leave or roll it over, will the cash out be included in my benefit calculation?

  10. When I cash out my annual leave or roll it over, will the cash out be included in my benefit calculation?

    If you cash out leave (annual, sick, etc.), you may be able to use all or part of its value in your benefit calculation. To be included, the leave must have been earned during your Average Final Compensation period (your highest-paid 24 consecutive service credit months).

    The administration of leave cash outs can vary, based on employer. Contact your payroll officer for more information.

  11. If I retire before my employment contract is settled, how will that affect my benefit?

    We will calculate your benefit based on the initial information we receive from your employer. Once final information is reported to us, your benefit will be recalculated and, if appropriate, we will make a one-time payment that is retroactive to your original retirement date. Please allow several weeks after your employer reports any additional salary for this recalculation to be completed.

  12. 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:

    • What is your target "income replacement" (the income you'll need to maintain your standard of living) amount?
    • Will you have other retirement income?
    • If you are married, do you have life insurance for yourself and/or your spouse?
    • Can you live on less than the maximum retirement benefit?
    • What is your health status and life expectancy?
    • How much of an age difference is there between you and your spouse? (If your spouse is younger than you and you select a survivor option, the greater the age difference, the more your benefit is reduced.)
    • What will your health care costs be after retirement?
    • Do you expect any lifestyle changes that will affect how much income you need?
    • What is the status of your short-term and long-term debt?
    • Will you continue to support any dependents after retirement (such as children or elderly parents)?
  13. If I choose the Optional COLA, how many years will it take before I recover the cost of this benefit?

    There isn't a simple answer that applies to everyone. We hope you'll try the Optional COLA Calculator to get an estimate based on your information.

  14. Can I roll my post 30-year contributions into DCP?

    Yes. When you retire, you can roll any contributions you've made since enrolling in the Post 30-Year Program into DCP. Remember - when you withdraw DCP funds, you may need to pay taxes.

  15. How do I start the retirement process?

    You may retire online by signing up for your retirement account, or you may contact us for a paper application. The choice is yours.

    Applying for retirement – online

    Go to your online retirement account. Log in (or sign up if you haven't already done so). The online retirement application will display only what you need based on your retirement system, plan and retirement eligibility rules. Follow the step-by-step instructions and electronically submit the application to us when you're ready. If you encounter any issues during the process, don't give up! Just give us a call and we will help walk you through it.

    Applying for retirement – paper application packet

    When you are ready to begin the process, request a retirement application from us. Be sure to submit the completed application with all required signatures and documentation, including proof of age for you and your survivor if you choose one of the options with a survivor benefit.

    Remember – if you're purchasing service credit, you'll need to complete and turn in your purchase form with your retirement application.

    If you prefer to talk with a Retirement Services Analyst (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) 800-547-6657. Here are directions and a map to DRS.

  16. I received notification that says you have my application. When will I hear from you again?

    During the month of your retirement, we will send you notification 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.

  17. 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:

    • Washington does not have a state income tax, but some states do. If you move to one of these states, be sure to check into the tax obligations for your retirement benefit.
    • Your health insurance coverage may be affected. To find out if it is, contact the insurance plan you intend to be covered by when you retire.
    • Direct deposits can only be made to banks within the United States. If you're moving outside the country, be sure to find a bank that can process electronic deposits within the U.S.
  18. 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.

  19. 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."

    • Public Employees' Retirement System (PERS) Plans 1, 2 and 3
    • Teachers' Retirement System (TRS) Plans 1, 2 and 3
    • School Employees' Retirement System (SERS) Plans 2 and 3
    • Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) Plan 2
    • Washington State Patrol Retirement System (WSPRS) Plans 1 and 2
    • Public Safety Employees' Retirement System (PSERS) Plan 2
    • City Retirement Systems for Seattle, Spokane and Tacoma
    • State-wide City Employees' Retirement System (SCERS)

    There are three advantages to being a dual member:

    • You can restore service credit you withdrew from a dual member system.
    • You can combine service credit to help you become eligible for service retirement.
    • You can use your highest "base salary" in a dual member system to calculate your service retirement benefit in other dual member systems.

    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.