How Do I Cash In My VRS Retirement Account?
You may have been working for many years in Virginia, and you’re wondering, "how do I cash in my VRS retirement account?" if you decide to cash in a VRS retirement account through the Virginia Retirement System (VRS), you may be able to collect some benefits right away, or you can wait to cash in until you reach full retirement age.
- Basic Benefit. Determine your basic annual benefit by taking your average final compensation when you retire, multiplying this number by 1.7, and multiplying again by your years of service credits. You accrue one month of service credit for every month of active employment in a VRS covered position. For example, $50,000 x 1.7 x 25= $21,250 annual benefit. Divide $21,250 by twelve, to determine your monthly retirement benefit.
- Survivor Option. To cash in your VRS retirement account by choosing the Survivor Option, you will receive monthly benefits that are lower during your life span, so that when you die, your named survivor can collect monthly benefits for the rest of her life. Your designation of a chosen percentage of your benefit, which can range between ten and 100 percent, will go to your named survivor. Anyone can be named as a survivor, although the IRS may limit the percentage the survivor can receive if she is not a family member.
- Partial Lump Sum Payment. You become eligible for this payment, if you work at least a year after the date you were first eligible to receive full retirement benefits. Taking a one time partial lump sum payment will reduce your monthly benefit payments. Cashing in your VRS retirement account by choosing the Basic Benefit or Survivor Option, will allow you to also receive a partial lump sum payment, if you choose. Determining the amount of your lump sum payment is based on the amount of your annual retirement benefit, and the length of time you worked after becoming eligible for full retirement benefits.
- Advanced Pension. Cash in your VRS retirement account by taking the Advanced Pension Option. Choosing this option allows you to temporarily increase the amount of your monthly benefits to an age that you choose between age 62, and the age you become eligible for full retirement benefits. When you reach your chosen age, your VRS benefits will be permanently reduced by the total of your full Social Security benefit. However, your benefit cannot be reduced by more than half of your Basic Benefit amount.
(pg 4,7,8, 9)