What kind of retirement do you want? There are a number of things you should consider before choosing a plan. Think about the type of person you are, how much time you have until retirement and how involved you want to be in managing your investments.
Use the checklist below to select the plan elements that best fit your needs.
| Choose Your Benefits, Choose Your Plan | |
|---|---|
| Plan 2 | Plan 3 |
One that's managed for you and one you manage yourself |
|
20 service credit years at age 55 |
10 service credit years at age 55 |
Must begin receiving your retirement benefit as soon as you leave employment or you will forfeit PEBB coverage |
You can delay receiving your retirement benefit and still be eligible for PEBB coverage |
How do you decide which plan is best for you? Several resources are available to help you decide. You may need to use one or more of these to make your plan choice decision while considering your own financial situation.
You can compare the projected retirement benefits for Plan 2 and Plan 3 using different contribution rate options and expected rates of investment return. You can also use factors such as early retirement and delayed benefits to compare your projections.
The Plan Choice seminar goes over the similarities and differences between Plan 2 and Plan 3 to assist you in making your decision.
The Getting to Know Plan 3 seminar provides an overview of Plan 3, as well as the contribution rate and investment option decisions you’ll need to make if you decide to join Plan 3.
Calculate your future retirement benefit using Self-Estimate Worksheets on the DRS Web site. You can run a variety of retirement scenarios to see what will work best for you.
Call 1-888-711-8773 (TDD 1-800-669-7471) or write planchoice@icmarc.org.
As you’re deciding on whether to join Plan 2 or Plan 3, consider all other sources of retirement income. Do you qualify for Social Security benefits? Do you have savings in other retirement plans from past employers? Do you have an IRA? Gather the information on your other sources of retirement income and determine what your projected monthly benefit will be. A standard practice for estimating retirement income needs is to use 80 percent of your income five to 10 years before you retire. Use this estimate and the projected monthly benefit of your other sources of income to help determine whether you should join Plan 2 or Plan 3.
If you’ve discovered in your projection that you’ll need more income in retirement, consider joining the Washington State Deferred Compensation Program (DCP). DCP is a supplemental retirement savings program that offers you the opportunity to invest money toward securing the retirement you envision. Whether you’ve been saving for years, or are just getting started, DCP offers you an excellent opportunity to enhance your financial future. Check with your employer to find out if they offer DCP. Tell your employer you want DCP if it’s not already available to you.
If you are participating in other tax-deferred plans your employer may offer, your Plan 3 contributions may limit your ability to contribute to these plans. Consult the IRS and/or a tax adviser for more information.