Managing Your Defined Contribution Plan Funds in Retirement
If you’re newly retired, you may be wondering about your options to access and manage funds in your VRS Defined Contribution Plans. If you participated in the Hybrid Retirement Plan or the Commonwealth of Virginia 457 Deferred Compensation Plan, you have flexible options. You can keep your savings in your DCP account(s) or withdraw the funds in different ways.
Benefits of Retaining Your DCP Account
Many retirees leave their money in their VRS defined contribution plan after they stop working. These plans feature low fees and a variety of investment choices, making them a cost-effective option compared to rolling funds into other types of plans. Your DCP can also receive rollover funds from 401(a), 401(k), 403(b) and 457(b) plans, the Federal Thrift Savings Plan or a traditional IRA.
Your savings remain invested and continue to grow tax-deferred. You can leave your money in the plan until age 73, when the IRS requires you to start taking minimum distributions.
Withdrawal and Distribution Options
When you’re ready to access your DCP funds, you can choose one or a combination of distribution options:
- Lump sum. Withdraw your entire account balance at once or take a partial withdrawal.
- Periodic payments. Set up automatic withdrawals on a schedule that works for you, such as monthly or quarterly.
- Annuity purchase. Convert some or all of your account into an annuity, providing a guaranteed monthly income for life.
- Rollover. Transfer your DCP balance into another eligible retirement account, such as an IRA or an employer-sponsored plan, to keep funds tax-deferred. Be sure to compare fees and investment options before moving your money.
More details about withdrawal options are available in the Leaving Employment Guide for your plan under the DCP Publications page.
Required Minimum Distributions at 73
By April 1 of the year after you turn 73, the IRS requires you to begin withdrawing a Required Minimum Distribution each year. If you don’t take your RMD on time, you may face tax penalties. For details, refer to the RMD Checklist.
Or, call the VRS Defined Contribution Plans Service Center at 877-327-5261 for assistance.
Managing Your Account and Learning More
Review your account details, track distributions and update your preferences any time by logging in to your DCP Account.
VRS and Voya Financial, the DCP record-keeper, offer resources to help you manage your plan funds. Explore a variety of calculators, financial planning services, investment advice, management options and more on the DCP Education page.
