Report Title

Load a previously saved Modeling scenario.

Select full time if you expect to earn 12 months of service credit each year. If you select part-time, the software will assume you earn 6 months of service credit each year.

The date you reached the service credit years entered in the previous field.

The date (mm/dd/yyyy) your plan choice becomes effective.

If you expect your salary to increase during each year, select the appropriate percentage to use in the calculation.

The calculator will use the salary growth rate percentage you selected to project the increase in your pay for the remainder of your career.

This is the average of your 60 consecutive highest-paid service credit months. This software assumes that your highest salary is at the end of your career.

Plan 2 provides a retirement benefit at:

• Age 65 or older with at least five years of service credit, or
• Age 55 or older with at least 20 years of service credit. Your benefit will be reduced if you are under age 65. There is less of a reduction if you have 30 or more years of service credit.^*

Plan 3 Defined Benefit provides a retirement benefit at:

• Age 65 with at least five years of service credit if:
  • 12 months were earned after age 44, OR
  • 5 years of service were established in Plan 2 prior to transferring to Plan 3 and prior to June 1, 2003 (PERS members), September 1, 2000 (SERS members), July 1, 1996 (TRS members)
• Age 65 with at least 10 years of service credit if you do not meet the above criteria.
• Age 55 or older with at least 10 years of service credit. Your benefit will be reduced if you are under age 65. There is less of a reduction if you have 30 or more years of service credit.^*

^*Plan 2 and Plan 3 provide an unreduced defined benefit at age 62 for members who were hired before May 1, 2013 and retire with 30 or more years of service credit.

This is the date on which you plan to separate from service with all employers covered by the Washington State Department of Retirement Systems.

Option 1 - Single life
This option pays the highest monthly amount of the four choices, but pays it for your lifetime only. No one will receive ongoing benefits after you die.

Option 2 - Joint and 100 percent survivor
Your monthly benefit under this option is less than in Option 1, but after your death, your survivor will receive the same benefit you were receiving, for his or her lifetime.

Option 3 - Joint and 50 percent survivor
This option has less of a reduction to your monthly benefit than Option 2. Your survivor will receive half of the benefit you were receiving, for his or her lifetime.

Option 4 - Joint and 66.67 percent survivor
This option has less of a reduction to your benefit than Option 2 and more of a reduction than Option 3. Your survivor will receive 66.67 percent of the benefit you were receiving, for his or her lifetime.

Your beneficiary is the person you have designated to receive any benefits that are payable upon your death. Enter that person's birth date here in mm/dd/yyyy format.

On July 1 of every year following your first full year of retirement, both Plan 2 and Plan 3 provide an annual cost of living adjustment to your defined benefit pension based on the Consumer Price Index (CPI) for Seattle, to a maximum of 3 percent per year. You may choose to model this adjustment by entering a number in the range 0-3. For purposes of comparison, the same adjustment will be applied to both the DB and the DC payment streams, if you choose a Life Expectancy or Deplete by Certain Age distribution option. If you choose the Life Annuity distribution option, a COLA of 3% will be applied to that option and the COLA you choose will be applied to the DB.

You are required to contribute a percentage of your salary or wages to your retirement plan. You may choose to contribute to other retirement savings vehicles, in addition to whichever Washington State plan you select. You may have access to the Deferred Compensation program (also administered by the Washington State Department of Retirement Systems), which allows you to save in a tax-deferred way by flexible payroll deduction. The Internal Revenue Service establishes limits to the amounts that can be voluntarily contributed to tax-deferred retirement investments. For additional information regarding contribution limits as defined in Internal Revenue Code 415, refer to http://www.fourmilab.ch/ustax/www/t26-A-1-D-I-B-415.html.

This is the rate at which you expect to contribute to Plan 2 in the future.

The defined contribution part of Plan 3 is funded by the mandatory contributions you make. You choose how much to contribute from one of these six rate options.

Option A: 5% all ages

Option B: 5% up to age 35; 6% ages 35 through 44; or 7.5% age 45 and older

Option C: 6% up to age 35; 7.5% ages 35 through 44; or 8.5% age 45 and older

Option D: 7% all ages

Option E: 10% all ages

Option F: 15% all ages

If you don't choose a contribution rate, the mandatory default rate will be chosen for you: Option A: 5% all ages.

To complete the calculations you must input your expected rate of return (ROR) on your pre-retirement and post-retirement investments. You may want to run the model using a range of ROR values that you could realistically expect to achieve. In arriving at your expected ROR value(s) keep in mind your investment time horizon, your risk tolerance and the historical performance of asset classes you will be investing in such as the stock and bond funds. The average returns on stocks, bonds and stable investments are depicted on the Rate of Return History Chart. A long time horizon allows your investments to span short-term fluctuations and is typically associated with a more aggressive investment approach. A short time horizon is typically associated with a conservative investment approach. A low tolerance for risk, i.e. "I lose sleep worrying how my stocks are doing", is also typically associated with a conservative investment approach. Based on investment assumptions regarding time horizons, risk tolerance and historical performance, a range of values for use with the financial modeling software may be categorized as follows.

	Conservative	Moderate	Aggressive
Pre-Retirement	6%	8%	10%
Post-Retirement	4%	6%	8%

The reason for the 2% reduction between Pre-Retirement and Post-Retirement is a change in the investment mix in the definition of an aggressive portfolio. For example, an aggressive portfolio for a twenty year old might be 100% stocks, but an aggressive portfolio for an 67 year old might be 40% stocks and 60% bonds. Even though guidelines are provided in arriving at a reasonable ROR for input, it is important that you consider your individual circumstances in applying the guidelines. For example, you may have a short time to retirement, which typically would place you in a conservative investor category, but you may have other retirement savings available which allow you to be more aggressive in investing your Plan 3 Defined Contribution Account.

Rate of return prior to retirement is the percentage by which you anticipate the value of the investments in your defined contribution account in Plan 3 will increase each year while you are still working.

Rate of return during retirement is the percentage by which you anticipate the value of the investments in your defined contribution account in Plan 3 will increase each year while you are retired.

This is the date that you would begin receiving payments from the Plan 3 Defined Contribution portion. For the purpose of Part 4 - Standard Comparison, this date is set the same as your retirement date. This date can be changed in Part 6 - Alternative Distributions Options. Under the Minimum Required Distribution regulations, you must begin receiving payments by the later of: April 1 following the year you turn 70^1/2, or the date you separate from service.

Deplete by Certain Age:
This is a distribution method that can be used with your Plan 3 Defined Contribution account. With this method, you may begin your distributions at any age after your separation age and specify the age at which you wish to have your Defined Contribution account depleted. The COLA assumption you specified applies to this method.


Life Expectancy:
Your life expectancy is an estimate of how long you will live beyond a particular age. Your projected life expectancy is used to calculate the amount being withdrawn from your Plan 3 Defined Contribution account and it also is used to determine the present value of your Plan 2 and Plan 3 Defined Benefit payments. This program uses the IRS Table V Life Expectancy Chart.

Interest Only:
This is a Plan 3 Defined Contribution Account distribution method by which you withdraw on a monthly basis only the interest on your account balance at a rate specified by you. The lump sum attained at the time distribution begins remains in the account.
You might choose an Interest Only distribution to see what level of monthly income could be sustained indefinitely from your DC account.

Bridge Benefit:
This is a distribution method that can be used with your Plan 3 Defined Contribution account. A bridge benefit allows you to receive approximately the same monthly payment before and after your Defined Benefit becomes available. It uses your defined contribution account to provide a monthly payment from your withdrawal age to retirement age (when you begin receiving your Plan 3 Defined Benefit). The intent of a Bridge Benefit is to supplement income before the defined benefit or other payments such as Social Security begin so that your payment stream stays level throughout your retirement years.
If you choose Bridge Benefit payments, your Defined Contribution monthly benefit from Plan 3 will be larger at first than it would have been if it had been calculated simply on the basis of your life expectancy. Once you reach your retirement age and begin receiving your Defined Benefit, the Bridge Benefit is eliminated and the Defined Contribution payment continues to pay out the remainder of your account based on your life expectancy.
For example, you might choose to stop working at age 62 and use a Bridge Benefit distribution to supply your monthly income until you become eligible for a full pension at age 65.

Specified Rate:
Specified Rate allows you to choose a specific rate of withdrawal from your Defined Contribution account. If you enter a withdrawal rate that is lower than your expected rate of return, your monthly payments and your Defined Contribution account balance will continue to grow. If you enter a withdrawal rate that is higher than your rate of return, both your monthly payment and your account balance will get smaller and eventually reach zero.
You might choose a Specified Rate distribution to see what level of monthly income is compatible with continued growth of your DC assets.

Life Annuity:
It is possible to use the lump sum accumulated in your Plan 3 DC account to purchase a life annuity. A life annuity is similar to your defined benefit pension in that it provides a guaranteed income stream for the rest of your life. The amount you must pay for each dollar of monthly life-long income depends mostly upon the age at which you purchase a life annuity. The price of an annuity reflects assumptions about life expectancy and about yield of investments, just as any DC distribution option does. In effect, the seller of a life annuity assumes the risk that goes along with these assumptions, and the price you pay for the annuity compensates the seller for relieving you of this risk.
The Life Annuity distribution option modeled in this software is intended to correspond to a single-life annuity that will be available for purchase by Plan 3 retirees from the State of Washington. Benefit provisions include a fixed 3% per year COLA, independent of changes in the Consumer Price Index, and a refund provision for the estates of members who die before receiving, in monthly benefits, a sum equal to the purchase price. The pricing reflects only the cost of providing the benefit. The pricing reflects the most current information available at the time this software was created. Actual prices when you retire may differ. This distribution option is not affected by changes in the assumed Rate of Investment Return in Retirement, because the member's assumptions are not those of the annuity seller.
You might choose a Life Annuity distribution to see whether the DC lump sum that has been projected according to your assumptions can be converted to a risk-free monthly payment that, when combined with your Plan 3 DB, exceeds the DB you would receive under Plan 2. Annuities from the Self-Directed Program and the Total Allocation Portfolio (TAP) are currently available.