I’ve decided to retire SOON. What are my options?

When you separate from full-time City service, you can stay in the Deferred Compensation Plan (DCP). You will continue to benefit from the DCP’s service team, experienced fund managers, and competitive fees. Keeping your savings in the DCP is easy, and the City can negotiate lower fees because of its large asset base ($8 billion and growing), so more of the money you’ve saved goes toward building your retirement security.

If you decide to withdraw funds from your account, you have the ability to choose a distribution option that aligns with your goals. Click on the options below to learn more about the different distribution options:

  • Installment Payment of a Specific Amount: You designate the dollar amount that you wish to receive on a regular installment basis (monthly, quarterly, semiannually or annually). Payments to you will continue until your account balance is zero. The number of payments you receive will vary depending on the rate of return on your investments.

    Installment Payment for Specified Number of Payments: With this option, you will receive payments on a regular installment basis (monthly, quarterly, semi-annually or annually). Payment amounts depend on the length of time you choose to receive payments, the periodic basis that you choose, and the rate of return on your investment options. Your payment amount is calculated by dividing your current account balance by the number of remaining payments. Your payment is recalculated each time a payment is distributed; therefore, your payment will not be the same amount each time. The payment amount will depend on the account value, which may fluctuate depending upon what your funds earn in the investments that you have chosen. With this payment method, your balance will be zero by the end of the term you select.

    With either of these options, you remain in the DCP and will continue enjoy the services and tools included in the plan. Learn more about the benefits of staying in the DCP here.

  • Withdraw some of your savings in cash: This option is also called a partial lump sum distribution. Funds can be distributed to you via check or an electronic deposit to your checking or savings account. With this option you still remain part of the DCP and can use the remaining savings to create a retirement income stream.

    With this option, you remain in the DCP and will continue to enjoy the services and tools included in the plan. Learn more about the benefits of staying in the DCP here.

  • Roll over the balance to another qualified plan: This option allows you to roll some or all of your savings to a 403(b) plan, governmental 457 plan, or an IRA (but be sure to compare fees and sales charges before you initiate the rollover).

    Keep in mind when rolling over your entire account balance to another qualified plan you are leaving the DCP and will forfeit the services and tools included with the plan. Click here to learn more about the benefits of staying in the DCP.

  • Withdraw all of your savings in cash: This option is also called a lump sum distribution. Funds can be distributed to you via check or an electronic deposit to your checking or savings account. Please keep in mind that this option may carry the greatest income tax liability. Consult with a tax professional or financial advisor before choosing this option.

    Keep in mind when withdrawing your entire account balance to you are leaving the DCP and will forfeit the services and tools included with the plan. Click here to learn more about the benefits of staying in the DCP.

You can process a distribution request by logging in to your account and navigating to Loans & Withdrawals > Taking a Withdrawal > Request a Withdrawal. If you have questions about distributions, call the Service Center at 844-523-2457. Service Associates are available from 6:00 a.m. to 5:00 p.m., PT (excluding New York Stock Exchange holidays).

A note about standard tax withholdings on withdrawals:

At this time, federal tax is withheld at 20%, and state tax is withheld based on your state of residency at the time of distribution. You may owe more or less income tax depending upon your personal tax situation. By February of the year following the year in which you receive a distribution, you will receive a Form 1099-R for the distribution amount. After-Tax Roth distributions are tax-free if you are age 59½ or older and the five-year holding period has been met.

Required Minimum Distributions (RMDs) are considered taxable events. Please review the RMD FAQ page for information about recent changes to RMD ages and requirements.