Follow These Steps as You Cross the Finish Line Into Retirement

If you’re retiring this summer, the planning phase is nearly complete. What’s left is a short list of time-sensitive actions to finish before your last day.

VRS Is Here to Help

If you haven’t done so already, visit the Getting Ready to Retire page for all the information you need to get started, including application instructions and the Getting Ready to Retire Guide. Once you’ve reviewed the Retirement Readiness Checklist for any action items you might have missed, you’re nearly there.

Meet with a VRS counselor before you submit your application to ensure you’ve considered all your options and find answers to any remaining questions you may have. Virtual and in-person appointments are available.

Apply at Least 60 Days Ahead

Most members can apply online through myVRS in about 30 minutes. You’ll get guidance at key decision points, and you can save your progress and return if you need more time.

You must submit your retirement application at least 60 days — but no more than 120 days — before your planned retirement date. For example, if you want to retire by August 1 you’ll need to apply before June 1. Also notify your employer to receive counseling on other available benefits.

A few things to confirm before you click submit:

• Beneficiary designations. Make sure they are current in both myVRS and your DCP Account. Designations do not carry over between the two accounts.
• Personal email. Confirm that the email address in your myVRS account is one you will keep after you leave your employer. VRS will continue to communicate with you in retirement, and you will want to retain your access to myVRS.
• Health insurance in retirement. Determine whether your employer offers health coverage for retirees. If you’re retiring from state employment, for example, you’re eligible to enroll in the State Retiree Health Benefits Program, administered by the Virginia Department of Human Resource Management. Be aware that some elections have tight deadlines tied to your retirement date. Read more about health care options in retirement.
• PLOP rollover account. If you’re planning to take a Partial Lump-Sum Option Payment (PLOP), be mindful of tax implications if the amount is paid directly to you. You can roll over the PLOP amount into a qualified tax-deferred savings plan such as the Hybrid 457 Deferred Compensation Plan or the Commonwealth of Virginia 457 Plan. As you apply for retirement, you will need account numbers and other details for your tax-deferred plan or financial institution receiving the PLOP funds.
• Tax withholding elections. Review your tax withholding allocations and decide how you want to designate withholding or claim exemptions in retirement. Your income sources and tax situation will change in retirement, so it’s worth thinking through or consulting a financial planner about how much to withhold from your monthly benefit.

Members with hazardous duty service or long-term disability in their record, or those who have an ongoing purchase of prior service agreement, will need to complete a paper application. Schedule an appointment with a VRS counselor who can review your record with you and help you through the process.

Act Before These Windows Close

Some benefits require action within specific timeframes around your retirement date.

• Optional Group Life Insurance. If you currently participate, you have 31 days following the month you leave employment to continue or convert your coverage. You pay the premiums. After that window closes, the option is gone.
• Health Insurance Credit. Don’t miss out on this benefit. If you have 15 or more years of service credit, you may qualify for a tax-free monthly credit to help with the costs of individual health insurance premiums in retirement.
• Long-Term Care Coverage. If you are covered under the Virginia Local Disability Program or Virginia Sickness and Disability Program, you can continue that coverage into retirement by paying affordable group rates. Submit the required forms to illumifin Corp. within 60 days of your last day of employment.

Decide What to Do With Your DCP Account

If you participate in a VRS defined contribution account, retirement is a decision point for those funds. Your options include leaving your balance in the account to continue growing tax-deferred, rolling it over to another plan, purchasing an annuity that pays you a monthly income or requesting a distribution.

As you evaluate these choices, consider that keeping your money in the VRS plan may allow you to continue benefiting from low plan fees and institutionally priced investment options.

Review your plan’s Leaving Employment Guide at DCP Publications or meet with one of Voya Financial’s DC Plans Education Specialists to talk through your situation. In addition, Voya also offers financial planning and investment advisory services to VRS members.