• You have a lump sum cash payment that you can use to pay off debt or make a purchase (be sure to review the Taxability Implications).

• You will be taxed on the money (see Taxability Implications for details).
• If you don't carefully budget for the entire length of retirement, you may run out of money.

Immediate Fixed Annuity
A guaranteed and set monthly payment.

• Your monthly benefit will always stay the same.
• You can choose to have your annuity paid to you for a specified period or for the rest of your life.
• Payments are not subject to market fluctuations.

• No choice in how your money is invested.
• You cannot change your payout option once payments begin.
• You must pay the cost of the annuity from your account balance.

Immediate Fixed Joint and Survivor Annuity
A monthly payment that will provide a continuing benefit (usually ranging from 50-100% of your original benefit) to your spouse or other beneficiary should you die.

• Allows you to provide a continuing benefit to your spouse or other qualified beneficiary.
• You get to choose the percentage amount of the continuing benefit.

• If both of you die, there is no continuing payment to another beneficiary.
• Your monthly benefit is reduced slightly so that a continued benefit can be paid to your spouse or other qualified beneficiary.
• You must pay the cost of the annuity from your account balance.

Deferred Income Annuity
 

• Permit you to delay receiving your guaranteed income payments to a later age, which means higher monthly income payments.
• Reduce your Investment Plan balance that may be subject to required minimum distribution (RMD) rules.
• Referred to as "longevity insurance" because they can provide income later on in retirement, typically between the ages of 80 to 85

• No choice in how your money is invested.
• You cannot change your payout option once payments begin.
• You must pay the cost of the annuity from your account balance.

Systematic Withdrawals
A flexible payment schedule where you decide how much money to withdraw, and how often.

• Allows you to get the money you need for your living expenses while still keeping your investment growing.
• You can change the payment amount at any time.

• Payments are not guaranteed to last your lifetime.
• Your payments are affected by market fluctuations.
• Requires frequent monitoring of your investments - the amount of your withdrawals need to be less than what your investment earnings are to keep pace with inflation.

Combination
You can choose to take a partial lump sum payment and have the balance paid as an annuity.

• Refer to the Lump Sum Payment and Annuity options above for information.

• Provides you with the maximum monthly benefit for which you are eligible.
• Payments are paid to you for your lifetime.

• Does not provide a continuing benefit for your spouse or beneficiary after your death.

Reduced Life Annuity (Option 2)

• Provides you with a reduced monthly benefit for your lifetime.
• If you die before you receive benefits for 10 years, your beneficiary will receive the same benefit you were receiving until the benefit has been paid for 10 years in total to both of you.

• Provides a continued benefit to your beneficiary for a set period of time.
• Allows you to choose any beneficiary to receive payment.
• Payments are paid to you for your lifetime.

• If you live longer than 10 years after you begin receiving benefits, upon your death your beneficiary is not entitled to a benefit.

Reduced Joint and Survivor Annuity (Option 3)
Provides you with a reduced monthly benefit for your lifetime, with payment of the same monthly benefit to your spouse or joint annuitant (who is financially dependent on you for the remainder of their lifetime).

• Provides a monthly benefit to your survivor that is equal to what you were receiving.
• Payments are guaranteed for the lifetime of you and your joint annuitant.

• No further benefits are payable after both you and your joint annuitant die.
• Requires you to choose a beneficiary who qualifies as a joint annuitant to receive payment.

Reduced Annuity with 2/3 Survivor (Option 4)
Provides you with a reduced monthly benefit while both you and your spouse or your joint annuitant (who is financially dependent on you) are alive. When either of you dies, the monthly benefit payable to the survivor is reduced to two-thirds of the monthly benefit.

• Provides for a larger benefit while both you and your joint annuitant are living, and a smaller benefit when only one of you is living.
• Allows you to choose any beneficiary to receive payment.
• Payments are guaranteed for the lifetime of you and your joint annuitant.

• No further benefits are payable after both you and your joint annuitant die.
• Requires you to choose a beneficiary who qualifies as a joint annuitant to receive payment.

• Allows you to "retire" while continuing to be employed by an FRS employer for up to 60 months.
• Your Pension Plan benefit becomes frozen and you begin to accrue additional pension benefits in a separate DROP account.

• When you terminate your employment, you receive two retirement benefits: a monthly payment from the Pension Plan and the payment of your accrued DROP benefit as a rollover, partial rollover and partial lump sum, or a lump sum.
• Allows you to acquire a tax deferred nest egg that is otherwise not available through the Pension Plan.

• You must elect your Pension Plan payment option when you enter DROP and you cannot change it at a later date.