Choosing the Right DROP Payout for You
Properly completing the DROP Payout Form (Form DP-PAYT) prior to retirement could be the most important thing you do with your DROP Benefit. An error could cost you tens of thousands of dollars. Your “inaction” in this case may result in the most taxable option available.
Understanding the Payout Form
When you are three months out from retiring you will receive a packet of documents from the State. Your answers on these forms will determine where your benefit will go at retirement and how it will be taxed.
You have three choices to make on page 1 of this form. The choice you make will either cost you a lot of money in taxes immediately or cost you nothing currently:
• A lump sum
• A direct rollover
• A partial lump sum
If you have questions, schedule a time to speak with an advisor. They can discuss the options one by one with you and help you determine which choice might be in your best interest and why.
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