The IRS limits have increased for retirement savings programs like Washington’s Deferred Compensation Program (DCP). Beginning Jan. 1, 2025, you can contribute up to $23,500 per year. If you’re 50 or older, you can contribute up to $31,000 per year. 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, 2025. 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 20-35: Average monthly contribution is $359 Age 36-45: Average monthly contribution is $586 Age 46-55: Average monthly contribution is $728 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

The 2025 COLA percentages effective July 1 for most plans have not been released. DRS will update the COLA information page when the information becomes available in 2025 (usually sometime in March). Review the current 2024 COLA adjustments on the COLA information page.

Do you have DCP or Plan 3? If so, keep in mind that if you are separated from employment, federal law requires you to withdraw a minimum amount from your investment account when you reach age 73. The DRS record keeper, Voya, calculates this Required Minimum Distribution (RMD) and pays this amount to you automatically each year. You can also take out your own withdrawals to meet the minimum. Completing the annual minimum withdrawal, either on your own or automatically through the record keeper, helps you avoid the tax penalty (up to 25%) the IRS can impose if the minimum amount is not withdrawn. How do you calculate your RMD? To calculate your RMD amount, start with your previous year’s Dec. 31 investment account balance. Next locate your age in the RMD tables. Take your total investment account balance and divide it by the period that corresponds with your age. The resulting number is your required minimum amount. If you are a member of Plan 3 and DCP, you have two investment accounts that are subject to minimum distribution requirements, and you calculate these separately. How do you make changes to your RMD? While the required minimum distribution is issued to you automatically, you do have options to make changes to the withdrawal. To find out more, contact the DRS record keeper at 888-327-5596 or visit the RMD Section of the IRS website. Who is not required to withdraw an amount? Contributing employees: If you are still contributing to your plan, the RMD withdrawal is optional. Plan 1 and Plan 2 customers: If you are a Plan 1 or 2 member who is receiving a monthly pension benefit, you don’t need to take an RMD from those plans. If you are not receiving a monthly pension benefit, you are required to start your benefit or take an RMD when you reach age 73. DCP Roth account balances: As of 2024, the DCP RMD applies only to DCP pretax balances, not DCP Roth balances, which are already taxed.

A new Retirement Strategy Fund (RSF) is coming to the lineup of investment options in Plan 3 and the Deferred Compensation Program (DCP). The most recent addition – the 2070 Retirement Strategy Fund – will be available beginning Jan. 6, 2025. The newest fund is designed for those born in 2003 or later. Meanwhile, the oldest target date fund in the RSF lineup will be “retired” at the end of this year. The 2010 Retirement Strategy Fund will close and investor accounts in that fund will transfer to the Retirement Maturity Strategy Fund Jan. 3. No action is required from participants as the RSF lineup is updated. As these changes occur, however, it’s a good opportunity to evaluate your circumstances and make sure you’re investing in the fund that will best align with your personal financial goals. Retirement Strategy Fund Overview 2070 Fund fact sheet Retirement Maturity Strategy Fund fact sheet DCP or Plan 3 What is a Retirement Strategy Fund?Also called a target date fund, this is a diversified mutual fund that automatically shifts toward a more conservative mix of investments as it approaches a particular year in the future, known as its target date. The investor picks the fund with the date closest to the date they want to begin withdrawing their contributions. The managers of the fund then make all decisions about asset allocation, diversification and rebalancing. How do I choose a one-step Retirement Strategy Fund? These funds are listed by date in increments of 5 years. Just choose the date closest to the one you plan to begin withdrawing funds. In other words, take the year you were born and add it to the age you expect to retire or withdraw your funds. The sum is your target date. birth year + retirement age = target dateExample: 1993 + 65 = 2058 Pick the fund with the date closest to your target date. In the example here, the closest fund would be 2060. If you have been retired for 15 years or more, you would choose the Retirement Maturity Strategy Fund. See your plan section above for performance and fee information related to these funds. How do I view or change my investments? Make investment changes through your online investment account. Change your fund selections anytime during or after your employment. You can also contact the DRS record keeper, Voya Financial for assistance (888-327-5596).  More resources Investment information: DCP PERS SERS TRS Investment cost comparison calculator Investment account login How to save for retirement with DCP (DRS podcast)