The most important resource for planning one’s retirement pension and finding answers to questions is www.drs.wa.gov, the website for the Department of Retirement Systems.

The next important link is the Retirement Planning Checklist. This provides a good overview of the planning steps necessary to start your retirement journey. You can also set up your account for online access.

Once you have established an account, you can estimate/calculate your eventual monthly retirement benefit. Once you log into your own retirement account, you can view the actual data that is in the DRS system. Using the benefit estimator within their account will pull the actual data for a very accurate estimate of the retirement benefit.

Worth mentioning is that most people now retiring from schools are in Plan 3. There are two parts to that retirement: their defined benefit pension amount, and their defined contribution investment account. One’s retirement includes both sources of funding. The contribution account can be turned into a monthly income stream using the TAP annuity. The calculator for this is: https://drs.wealthmsi.com/annuity There is also a “Contact Us” link. DRS encourages persons to first log into their online account and use the contact form. One can fill out a personal form with specific questions or make a phone call to talk to someone about your specific situation. DRS is very responsive in both cases. Caution: Avoid calling DRS on Mondays or after a Holiday weekend to avoid long wait times.

There are other resources available. DRS offers retirement workshops throughout the state where experts are on hand to explain and answer questions.

Organizations like the Washington State School Retirees’ Association sponsor and archive retirement webinars, too.

If you are a teacher, service credit (years of experience) is calculated from a year that runs from September 1 through September 1. If you are an administrator, service credit runs from July 1 through July 1. So, if you were a teacher and moved into school administration, you ‘lose’ two months of service credit. For example, if you retired from being an administrator after 30 years of service, the Department of Retirement Systems (DRS) would show that you had 29 years, 10 months of service credit. In effect, you have ‘lost’ the two months credit for teaching.

How can I make up those lost two months?

There is little likelihood of a legislative fix, but there are some options. One of the first steps in planning for retirement is to estimate your benefit using the online Benefit Estimator tool.

• Log in to your online account. In the top navigation menu, you will see your retirement plan name (ie: PERS 2).
• Select your plan name to open the drop-down menu.
• Select Benefit Estimator.
• The next few pages will ask you a few simple questions about your age and when you would like to retire. The four-step process will walk you through the steps, one at a time.

The final page will give you your Estimated Monthly Benefit (based on the information provided). This is an estimate of how much you can expect to receive in retirement based on your current salary.

You can input your estimated date of retirement. You should input both July 1 of the year you expect to retire and have the estimator calculate your benefit, and you should input September 1 of the year you expect to retire and see the result. Technically, you have never ‘lost’ the two months as a teacher. They have just become phantoms in the system due to the calendar years for the different positions. You are still entitled to that credit.

So you have a decision to make. If you forgo collecting your first retirement check until September 1, you will have full service credit. If you choose July 1 as your retirement date, you will lose two months of pension checks. If the difference in the benefit is enough to justify the wait, then you may decide to do so. If not, then choose July 1.

DRS recently updated an article regarding which is the best month to retire with additional information about how a July or September retirement will impact insurance coverage through SEBB and PEBB.

Some background: When it comes to retirement planning, teachers and school employees in Plans 2 and 3 often ask whether it’s better to retire at the end of June (when they stop working) or in September (when their contract ends). Many choose a July 1 retirement date if the last day worked is in June. Why? It all has to do with what’s gained from an earlier start to benefits and COLAs (cost-of-living adjustments) compared with what’s earned from two extra months of service. Although with the creation of SEBB, many now wait until September 1 as the retirement date so they can continue with SEBB coverage for July and August.

These two scenarios illustrate the differences:

• June 30th retirement scenario – Let’s say you decide to retire starting on June 30, 2022. In this circumstance, you’ll receive your pension benefits plus your salary for July and August. In addition, your cost-of-living adjustment (COLA) will start in July of the following year (July 1, 2023). What you won’t receive is service credit for July and August.

• August 31st retirement scenario – If you retire starting on August 31, 2022, your COLA won’t go into effect until July 1, 2024. That’s one year and 10 months after your retirement. This is because you must be retired for an entire year before receiving your first COLA payment. And since COLAs only go into effect on July 1, you must wait for the next July 1. You’ll earn service credit for July and August, but you’ll delay receiving your COLA (and forego pension payments for July and August).

So what’s best? The fact is, if you wait until September, the increase in your benefit from the service credit can be minimal compared to the increase you'd receive by retiring in July with an earlier COLA and the extra two months of pension payments. That decision is dependent upon inflation. If it is low, then it may be better to wait until August 31 and get the extra two months service credit.

If you have any questions about your retirement date or COLAs, please contact DRS.

Regarding health insurance: Upon retirement a person can choose to purchase insurance with the Public Employee Benefit Insurance Board, a statewide insurance cooperative. Their customer service number is 1-800-200-1004

If you decide to enroll in a PEBB offering, you have the option to sign on to set up an online account. (Recommended)

Upon retirement, an individual has 60 days of the school district coverage ending to enroll in a selected plan. If one does not do so, he/she will then forfeit any future option to enroll in any PEBB plan.

However, if one has a spouse, for example, whose insurance will continue coverage for you as a retiree, one can defer the PEBB option under certain conditions until such time that one would want/need coverage through the PEBB board. However, those deferring need to request proof of employer coverage to keep on file the longer they are deferred. This must be provided to PEBB upon their request to insure continuous coverage.

Regarding the deferral process; three important caveats: (1) If you are covered through the AppleCare insurance option (which is generally free and income-based), the deferral option is not available, and more importantly, (2) If you want to move from the state exchange coverage or other non-PEBB insurance coverage, you must maintain continuous coverage until the PEBB selection comes into effect. If there is any gap in coverage, the PEBB option is forfeit. (3) If you have not retired but separated, you may not be allowed to defer coverage. Contact PEBB/HCA for more information.

Medicare enrollment timelines are tricky and timing is critical to ensure adequate coverage and access to Medicare Part B. Research and advance planning are needed here. ◼