When it comes to budgeting, you may have heard the term “Save more and spend less.” But that’s easier said than done. We know that retirement planning can be a lot. However, if you set up a plan now, it'll feel easy-peasy. When you think about it, planning for retirement is a lot like using a blueprint to build a house. Just as a blueprint outlines the structure of a home, a retirement plan maps out your financial goals and strategies for achieving them. When you have that blueprint in your hand, it can help to relieve a lot of that stress. Take a moment to think about your retirement blueprint. What kind of lifestyle do you want to have? Do you want to plan for an early retirement? What’s your risk tolerance when it comes to investing? Set aside some time to ask yourself these questions. The beginning of fall is a great time to take a fresh look at your plans and to review your budget. Draft a plan for your finances before the busy holidays start. This October, we’re hosting four free Q&As to help you lay the foundation to achieve your retirement goals. Each session is 30-min which includes a short 10-minute presentation followed by time for your questions. Sign up to get your spot. Special 30-min Q&As for October Tuesday, Oct. 1 – Planning for an early retirement Saving just a little more during your career can help you in retirement. Find out how contributing to DCP with a percent of your pay or a flat dollar amount could help you plan for an early retirement.Session has ended. Tuesday, Oct. 8 – DCP Roth and pretax options DCP offers Roth and pretax options. Compare these options and discover how DCP differs from an Individual Retirement Account (IRA).Session has ended. Tuesday, Oct. 16 – What’s your risk tolerance? DCP and Plan 3 investments all have levels of risk. Find out about investing for the long term and what type of risk tolerance you have.This session still has spots that are open. Tuesday, Oct. 22 – How does a pension work? Defined benefit pensions in the U.S. are rare to have nowadays. Find out what it means to have a pension and how you can increase it.Session is full, but you can still join the waitlist. Sign up for a Q&A Financial resources to craft your perfect retirement blueprint DCP calculator Use the DCP calculator to estimate how much you’ll have in retirement with your current contribution. If you ever wished that you could have a crystal ball to look into your financial future, look no further.  Try estimating different contribution amounts. If you increase your monthly contribution by $100 or 1%, it can make a big difference over time. Benefit estimator tool Log in to your online account and select “Benefit Estimator” to get an idea of your monthly retirement income. By answering a few simple questions, this tool will allow you to see what your monthly income could look like. Retirement planner calculator The Retirement planner calculator projects how much (or how much more) you should be saving based on your current plan for retirement. It also allows you to stagger income sources. This can be especially helpful for Plan 3 customers who have different options for how they withdraw their retirement savings. TAP annuity calculator If you’re a Plan 3 customer, you can turn your Plan 3 Investments into a second lifetime benefit income option (guaranteed by the State of WA). Use the TAP annuity calculator to estimate what that income might look like. DRS podcast Listen to the podcast: Fund Your Future with DRS. Now available on all listening platforms. Explore some of the basics of financial planning, tools for managing your money and ideas for sparking conversations with friends and family. Join DRS employees as they tackle the stigma around money and share their personal financial journeys. Financial independence checklist Setting and maintaining your course toward financial independence could take less time than you think. The financial independence checklist has 5 easy steps you can take to set yourself up for success in retirement. DRS Webinars Watch a live or recorded webinar. Topics cover your retirement plan as well as tips for financial wellness. See the webinar schedule. More resources: Hey millennials, plan for your future with 3 easy steps Retirement guide for new hires Financial Wellness Video Library from VOYA America Saves – A nonprofit that encourages and supports average-income households to save money, reduce debt, and build wealth.

We’re often asked to explain what service credit is and how it works. Customers want to know about topics related to service credit, such as portability (also known as reciprocity), dual membership and out-of-state credit. Here’s a rundown along with some links to helpful resources. Retirement service credit basics Service credits are the units used to calculate your pension benefit. The different retirement systems and plans have their own rules about how many you need to qualify for retirement; what we refer to as vesting. Most require five years, equal to 60 service credit months. Think of it like a car payment – you need to make 60 payments before you own the car. For retirement, you need to earn 60 service credit months of employment before you qualify for retirement and, you can only earn one service credit per month maximum. For your vesting requirements, see your plan guide. You can view your complete service credit history through your online account. It is a good practice to check your service credit every few years to be sure it matches your expectations. Membership in multiple plans – also known as dual membership or multiple plans Some customers have asked about dual membership and wonder if there’s reciprocity or portability (an interchange of service credit) between DRS plans and other plans from different Washington state cities and other states. At DRS, there is portability with the First Class City Retirement Systems for Seattle, Spokane and Tacoma. You’re a dual member if you have membership in more than one Washington state retirement system, including First Class City Retirement Systems for Seattle, Spokane and Tacoma. We also refer to dual membership as multiple plans. To see if you’re eligible to retire, add up the service credit you earned in each of your member systems. If that combined service makes you eligible to retire from one of your plans, you can choose to retire from all of them. It’s important to know that retiring before full retirement age can result in a permanent reduction of your benefit. Early retirement rules still apply. If you are in multiple plans, you will receive a separate monthly benefit from each of your systems. Each system calculates the payment amount in its own way, but they all include three factors: Service credit years (SCY) Multiplier (usually 1% or 2%) Highest average monthly earnings (Average Final Compensation [AFC] or Final Average Salary [FAS]) Check out these resources for more information: Webinar/Multiple plans Podcast – Dual members and reciprocity Plan guides Service credit opportunities for Plan 2 and Plan 3 teachers Teachers have portability opportunities with other states where they have earned teaching service credit. TRS Plan 2 and Plan 3 customers can use service credit earned as an out-of-state teacher to qualify for early retirement or increase their monthly benefit. Two programs are available: the Out-of-State Service Credit Program and the Public Education Experience Program. You can participate in either or both. To be eligible, your out-of-state service must be earned from a public retirement system that covers teachers. You must also be a vested member of TRS Plan 2 or Plan 3 through DRS. If you’re interested, we encourage you to find out if using your out-of-state service credit could benefit you. These resources can help: Try the out-of-state service credit calculator View a short video (2 mins.): Using Service Credit Earned While Teaching Outside of Washington State Listen to this Fund Your Future with DRS podcast -- Teachers: Out-of-State Service Credit Review your plan guide -- TRS Plan 2 or TRS Plan 3 Purchased service credit Purchasing additional service credit increases your monthly retirement benefit for the rest of your life. You can purchase between one and 60 months of service credit in whole months. Purchasing service credit will increase your monthly benefit, but it will not increase the years of service posted on your account. The increase to your benefit is calculated using the same formula as your retirement benefit. This additional service credit is available at the time of your retirement only. Also, you cannot use the additional credit to qualify for vesting or early retirement (it won’t increase your years of service). Log in to your account and choose “Purchasing Service.” Here you can find the estimated cost and income increase per month you purchase. Also see your plan guide for details. Missing or withdrawn service credit Sometimes customers notice their service credit doesn’t match their seniority date. Often, the difference is because of missing or withdrawn service credit or a break in service. You may be eligible to purchase some or all of the missing credit. Here is what you need to know about the process. View your complete service credit history through your online account. It is a good practice to check your service credit every few years to be sure it matches your expectations. Contact DRS for a cost estimate. You will need to contact DRS to request a cost for restoring your credit. We are not able to provide an estimate when you call. Similar to a retirement benefit estimate, this cost must be calculated by DRS and may require information from your employer. Prepare in advance. See the list of information you’ll need on hand before you call, in your Plan guide under “Missing and withdrawn service credit.” There are lots of ways you can use your retirement service credit. Some of the rules are complex. If you have questions, please send us a secure message through your online account.

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.

The 2024 Annual Comprehensive Financial Report  (ACFR) reflects our ongoing commitment to accurate and transparent financial reporting of the retirement systems. It contains the following detailed information: Financial statements and highlights DRS membership Employer participation Investment performance and policy Financial trends Demographics Operations Funding policy and progress Actuarial assumptions and methods Financial information for employers The 2024 Participating Employer Financial Information (PEFI) is now available. It includes allocation schedules and information to assist employers participating in the state of Washington’s multiple-employer, cost-sharing retirement plans with their pension financial reporting. Where to find previous reports Chapter 15: Financial Reporting in the DRS Employer Handbook includes links to reports published in the last few years. You can view and download historical ACFRs and PEFIs on the Washington State Library’s website.