The IRS limits have increased for retirement savings programs like Washington’s Deferred Compensation Program (DCP). Beginning Jan. 1, you can contribute up to $24,500 per year. Age 50 or older: you can contribute an additional $8,000 beyond the limit ($32,500 for 2026). For highly compensated employees ($150,000 in FICA wages for 2025), who are age 50 or older, the additional $8,000 may be required as Roth contributions. These limits apply to DCP Roth and pretax contributions. That means whether you contribute to Roth, pretax or both DCP options, it’s a combined total.  If you’re already a DCP participant, now’s a great time to consider increasing your contributions. If you’re not a participant and your employer offers DCP, consider signing up. The new limits are effective Jan. 1, 2026. But depending on your employer’s payroll, it can take up to 30 days for your account changes to go into effect. So, if you want to begin saving in the new year, you might want to start your changes now. How much do DCP customers save each month? The DCP program makes it easy to save for retirement. Even a minimum monthly contribution of 3% of your salary can add up to big savings over time. The most common percentages saved are 10%, 5% and 3%. Age 26-35: Average monthly contribution is $477 Age 36-45: Average monthly contribution is $655 Age 46-55: Average monthly contribution is $800 Around 5% of DCP customers contribute the maximum amount. Next steps Change your contribution online through your DCP account Check out the DCP page New to DCP? Enrolling is easy with this online form

We often talk about early retirement. But what about retiring later? Many people choose to continue working beyond the traditional retirement age, or they separate from employment but wait to start collecting retirement income. Whether you’re delaying for personal, financial or healthcare reasons, let’s explore how this timing affects your benefit. Why some people delay retirement There are many reasons employees choose to keep working past their first eligibility date. Some want to build more savings or earn additional service credit. Others simply enjoy their work or want to maintain employer-provided healthcare coverage, especially if a spouse isn’t yet eligible for Medicare. Every situation is unique, and delaying retirement isn’t necessarily good or bad. It just depends on your goals. The key is knowing what happens to your retirement income sources when you wait. Pension vs. Social Security: how they differ A common misconception is that a DRS pension works like Social Security, where delaying payments can increase your monthly benefit. That’s not the case. Once you’ve separated from employment and are age 65 or older, there’s no monetary advantage to delaying your pension. Your benefit is based on your service credit and Average Final Compensation (AFC) at the time you separate, not the date you apply for retirement. For some DRS plans, normal retirement is before age 65. Review your plan page for individual retirement requirements. In summary, if you’re already eligible and no longer working, your pension amount won’t continue to grow while you wait to start it. What happens when you delay retirement If you’ve separated from service and haven’t yet applied for retirement, your account remains inactive with DRS. You can apply for your pension at any time once you reach the eligible age. However, your benefit will be calculated using your service and salary information as of your separation date. For those still working and earning service credit, each additional month adds credit toward your benefit formula. But once you’ve stopped working, the value is fixed. Plan 3 and LEOFF 2 members: If you have at least 20 years of service credit when you leave employment and do not start to receive your pension, it will automatically increase by about 3% for each year you delay receiving it up to your normal retirement age. This is called benefit indexing and is exclusive to Plan 3 and LEOFF 2. Retroactive retirement If you’re eligible and apply for retirement later, you could have a retroactive retirement date. This means your pension could start from the first eligible date, and you’d receive a lump-sum payment for the months you delayed. You need to be separated from your DRS-covered employer during the delayed months. Contact DRS for assistance. Important tax and income consideration: If you are paid retroactively, the lump sum amount will apply to your annual taxable income for that year. This can be a considerable amount of federal tax if you delay the pension for an extended time. Also consider impacts to your Social Security and other income-based programs. Can I separate early, delay retirement, and still enroll in PEBB retiree healthcare? Yes, if you’re in PERS, SERS or TRS Plan 2 or 3 and meet the age and service requirements for an early retirement (age 55 or older with the years of service credit needed) at the time of separation, you can delay receiving your retirement benefit and still be eligible for PEBB retiree coverage. Because DRS does not administer healthcare, we are unable to assist with healthcare questions or accounts. Visit the PEBB retiree section of the Health Care Authority (HCA) website for more information. Can I time the withdrawals for different parts of my retirement? Short answer? Yes. If you have multiple retirement income sources, you can choose when to receive these funds. For example, let’s say a Plan 3 member in TRS also has a Deferred Compensation Program (DCP) account through DRS. They could choose to collect their pension retirement from TRS 3 at a different time from their investment contribution account funds in TRS 3. They could also choose to withdraw DCP funds at an earlier or later date. Many people use supplemental retirement income accounts like DCP to separate early and delay pension retirement, or to span any income gaps before collecting Social Security. If you’ve joined multiple types of DRS-covered systems (PERS, SERS, TRS, LEOFF, PSERS, WSPRS) see information for dual members. Returning to work after retirement Some retirees decide to return to work. Depending on your plan and the type of job, you may be able to work while continuing to collect your pension. Or you may need to suspend it temporarily. DRS provides specific guidelines on “retiree return to work” rules for each plan, so it’s worth reviewing those details if you’re considering post-retirement employment. More about returning to work. The bottom line Delaying retirement is a personal choice, and sometimes a practical one. But when it comes to your pension, it’s important to know the facts. Once you’ve separated from employment and reached full retirement age for your plan, your pension benefit doesn’t increase just because you wait. If you’re unsure what’s best for your situation, consider using the benefit estimator from your online account to create multiple estimate scenarios. If you’re within a year of retirement, you can contact DRS for a benefit estimate or to discuss your options. Knowing how timing affects your pension can help you make the most of your retirement years, whenever you decide to start them. Next steps Visit your plan page to review age and service requirements for retirement. Log into your DRS online account to review your years of service, estimate your pension income, or request an official benefit estimate to retire. While you’re there, check that your mailing address, personal email address and phone number are correct. This information is the only way DRS can contact you once you separate from employment. Looking for steps to retire? Visit the retiring section.

The 2026 Cost-of-Living Adjustments (COLA) percentages effective July 1 for most plans have not been released. DRS will update the COLA information page when the information becomes available (usually sometime in March). You can review the current 2025 COLA adjustments on the COLA information page.

Mark your calendar – the new schedule is here! DRS issues pension payments on the last business day of each month. Please note: the date you receive your payment will depend on your financial institution. 2026 pension payment schedule January 30 February 27 March 31 April 30 May 29 June 30 July 31 August 31 September 30 October 30 November 30 December 31 Keep your information up to date To use a different bank account for direct deposit, update it in your online account. Your new information will need to be provided early in the month (before the 15th) to be effective for that month. Keep your address up to date. You’ll receive a payment in the mail if the change is not effective in time. Also, keeping your address current allows your tax documents to be delivered on time. How to update your direct deposit: Log in to your online account Select My Account from the menu options listed. This will bring up a table of your account information. Next to Direct Deposit select View/Edit. For security, enter the current bank account number you have on file. Enter the new routing number. Select Validate Number. Enter the new account number and information. Check the agreement box and select Next. When prompted, verify your changes using multi-factor authentication. If you do not receive a confirmation email/text, it was not successfully changed.