Retiree News

Whether you’re adjusting to a fixed income or reviewing your plan for the year ahead, budgeting helps you prepare for expected and unexpected expenses while making the most of your funds.

As tax season approaches, it’s a good time to revisit your budget, check your tax withholding and organize your financial documents. These tips help you stay on track and make informed decisions.

Why Budgeting Still Matters

Retirement changes how you manage money. You may spend less on commuting or work-related costs, but other expenses — like travel, health care or helping family — can take their place. A budget helps you stay on top of what’s coming in and going out, so you can make choices that support your lifestyle.

Start by listing your income sources: your VRS pension, Social Security, any defined contribution plans and personal savings or investments. Then take a fresh look at your monthly expenses. Don’t forget the small stuff like streaming services, gifts and seasonal costs, which can add up over time.

If it’s been a while since you updated your budget, log in to your myVRS account and check out the Financial Wellness section. You’ll find tools and articles to help you get started.

Build in Some Breathing Room

Life doesn’t always go according to plan. Whether it’s a medical bill, a broken appliance or a last-minute trip, having a little extra set aside can make a big difference. Try to build up one month’s worth of essential expenses and adjust as you go.

Keep Your Information Organized

Part of budgeting is knowing where your financial documents are when you need them. Organizing your personal records helps you stay prepared and makes it easier to manage your budget over time.

VRS offers a Get Organized guide to help you inventory your assets and vital documents. Use the final page to list the locations of items like your will, tax documents, insurance policies and property records. Here’s a checklist to help you get started:

Financial

• VRS benefit statements.
• Bank and investment account records.
• Tax returns and withholding forms.

Insurance

• Health, life and property insurance policies.

Legal

• Will and power of attorney documents.
• Titles and deeds.
• Safe deposit box information.

Review Your Tax Withholding

Your tax withholding directly affects your monthly income. Reviewing it regularly ensures your budget reflects what you actually receive. You can change your withholding anytime through your myVRS account. Use the income tax calculator to see how withholding different amounts affect your benefit and submit changes online.

Understand Your Distribution Options

If you have a VRS Defined Contribution Plan, such as the Commonwealth of Virginia 457 Deferred Compensation Plan, knowing your withdrawal options helps you plan your income stream and build a budget that works for you.

At retirement, you can leave your money in the plan or choose from several withdrawal options:

• Lump-sum payments.
• Periodic withdrawals.
• Annuities.
• Rollovers to another eligible retirement account.

When you leave your funds in the plan, your savings remain invested and continue to grow tax-deferred. You must begin taking Required Minimum Distributions by April 1 of the year after you reach your RMD age. Depending on your birth year, your RMD age may be 73 or 75. Read the RMD Checklist for details.

Get Help When You Need It

Call VRS at 888-827-3847 for general questions about your VRS benefits. For more specific questions, schedule a one-on-one appointment with a VRS counselor. Appointments are available virtually or in person at the VRS Retirement Counseling Center in Richmond.

For questions about your VRS Defined Contribution Plan, contact the DCP Service Center at 877-327-5261. VRS and Voya Financial also offer calculators, planning tools and educational resources to assist you. For more details on these options, including a free 30-minute session with a Voya advisor (available to all VRS retirees), see this issue’s “Take Advantage of Financial Planning Services.”