Your retirement, explained

One formula

Your average final compensation, times your years of service, times 1.85%. That is your pension for a year, for life.

a year is a month.

Every year is a slice

Each year of service adds the same slice to your check: a month, for the rest of your life.

One more year on the job is one more slice, forever.

Short of 25 years costs more

Leave between 50 and 60 with fewer than 25 years and VRS cuts 0.5% for every month you are short. At 20 years, that is 30% less, for life.

Shown at your average final compensation.

Your pension

a month replaces about of your pay.

Your official number is in the myVRS Benefit Estimator. Survivor options and a PLOP would lower it.

It sits on top

With 20 years of hazardous duty service, VRS adds a flat $1,488 a month to your pension. Everyone who qualifies gets the same amount, whatever their salary.

For you, that is about of what VRS pays.

It is a bridge

It starts when your VRS retirement begins, age 50 at the earliest, and carries you to full Social Security age, 67.

Starting at , the bridge runs , about in all.

At 67, it hands off

The supplement ends at 67 whether or not you have started Social Security, which is designed to pick up where it leaves off.

Claim Social Security as early as 62 and you collect both for a while, but your Social Security check stays permanently smaller.

Your handoff

Change your Social Security estimate under Use your own numbers.

Your future checks

The Partial Lump-Sum Option Payment lets you take 1, 2 or 3 years of your pension up front. Each square here is one future monthly check of .

Pulled forward into one payment

It is not extra money. It is your own future checks, paid early.

Every check after is smaller

To pay for it, VRS lowers your monthly pension permanently. Future cost-of-living increases are figured on the smaller check.

VRS calculates the exact reduction. See it in the myVRS Benefit Estimator before you choose.

Taxes come off the top

Taken in cash, VRS withholds 20% for federal tax and 4% for Virginia before you see a dollar. Rolling it into an IRA or a plan that accepts rollovers avoids the up-front tax.

Do you qualify?

You must work at least one year past the date you first qualify for an unreduced pension: 50 with 25 years, or 60 with 5. Purchased service does not count toward that year.

One choice, made once

When you retire from the County Supplemental Pension Plan, you pick one option, and you cannot change it later. Which options you have depends on your age when you leave.

Option 1: a bridge to 50

Only for members who reach 25 years before they turn 50, which usually means hired at 24 or younger. It pays monthly until your VRS pension can begin at 50, then stops.

Option 2: 180 checks

If you die before all 180 are paid, your beneficiary receives the rest.

Option 3: one lump sum

When the lump sum can make sense

To catch up with Option 2, the lump sum would have to grow like a strong stock fund every year for 15 years. But you might use it to pay off a mortgage, clear credit card debt or cover a child's tuition, and the interest you stop paying can tip the math.

That is a conversation for a financial planner. The IAFF Financial Corporation is a good place to start.

Accounts, not pensions

What you get depends on what goes in, how it grows and how you draw it out. Your 457(b) and Roth 457(b) hold what you save. Your 401(a) holds the County's contributions.

Tax now or tax later

The 457(b) gives you a tax break today, and you pay tax when you withdraw. The Roth 457(b) is taxed today, and comes out tax-free later.

Roth works best when your tax rate now is lower than it will be later, which is often true early in your career.

When you can reach it

Your 457(b) is open at any age once you leave the County, with no 10% penalty. Your 401(a) opens without the penalty if you leave in or after the year you turn 50, or with 25 years. Roth earnings come out tax-free at 59½ once the account is 5 years old.

Two pockets

That is why many members use both: 457(b) money to live on from the day you leave until 59½, and Roth money that comes out tax-free after. It matters most if you retire young.

Your balance as a paycheck

Simple division, before growth or taxes. Move these accounts into an IRA and you lose the early-withdrawal protection: before 59½, IRA withdrawals generally face the 10% penalty.

Your monthly income, by age

Start with the foundation: your VRS pension, a month, from for the rest of your life.

Add the supplement

The $1,488 bridge stacks on top until 67.

Add CBIZ Option 2

Option 2 pays for 15 years. Chapter 4 compares it with the lump sum.

Social Security takes over

At 67, Social Security picks up: a month on your estimate.

Your retirement at a glance

Before taxes and health premiums, without cost-of-living increases or your 457(b) and 401(a) savings, which can smooth any change.