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Guide to Retirement

Plan now for Retirement

If you’re like most of us, you probably believe that retirement planning is something that you start thinking about when the end of your career is in sight. Nothing could be further from the truth. The secret to a successful retirement is getting started early: it’s never too early to start planning and saving for your retirement. 

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2. Getting Ready to Retire

F. Timing Your Retirement

Many factors influence the timing of your retirement date. One to consider is the impact of your retirement date on your Washington State retirement benefits. The Washington State Department of Retirement Systems (DRS) tracks two dates:

  1. Your separation date: The last day you worked for your employer.
  2. Your retirement date: The date you formally begin claiming your retirement benefits.

These two dates cannot occur in the same month. If the last day you work is the 15th of June, the earliest date you can begin claiming your state retirement benefits is the 1st of July. The DRS pays benefits at the end of each month, so in this case, you wouldn’t receive your first payment until the last day of July, which is 45 days after your last day of work.

The best way to ensure you minimize the time you go without income is to retire on the last day of the month and start claiming your state retirement benefits on the first day of the following month.

Another consideration in timing your retirement date is maximizing the benefit of annual Cost of Living (COLA) increases. The state makes a cost-of-living adjustment every July. You are not eligible to receive a COLA increase until you have been retired for one full year. Many people time their retirement to maximize the impact of annual COLA increases: they start claiming their retirement benefits on July 1st, so they get the benefit of the next increase, which is applied the following year. Retiring in August, for example, would mean waiting 23 months before receiving the benefits of the next COLA increase.

The DRS strongly suggests that you notify them at least three months ahead of your planned retirement date (and preferably six months) so they have time to review your available benefits, review and address any discrepancies, and set up your monthly payments in their system.