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Nearing Retirement

Whether retirement is just around the corner or five years away, it pays to prepare. Be sure to explore what you need to know before you retire.

Maximize Your Contributions

To contribute as much as you're allowed in 2019, you must calculate your payroll deduction per pay period. For example, if you are under age 50 and wish to contribute the maximum allowed ($19,000 for 2019), you divide $19,000 by the number of pay periods left in the year. If you are at least age 50 by December 31, divide $25,000 (the total contribution amount you are allowed for the year) by the number of pay periods remaining. (Please refer to the 2019 Payroll Deductions Schedule for details. The schedule will tell you when the change has to be made in order to become effective with your next paycheck.)

Note: Even if you contributed the maximum in the past, you should ensure that your per-pay-period payroll deduction is enough to maximize your contributions this year.

How to Play Catch Up

The SFDCP offers three ways you may be able to “catch up” on your contributions:

Age 50+ Catch-Up*

If you are (or will be) at least age 50 by December 31, 2019, you may contribute up to $6,000 above the standard annual limit ($19,000). This means that you can contribute as much as $25,000 to your SFDCP account during the year.

Special 457(b) Catch-Up*

Starting three years before your “normal” retirement age, if you have not always contributed the maximum allowed to your account each year, you may be able to contribute a total amount equal to twice the annual limit. For example, in 2019 if you qualify, you may contribute up to $38,000 ($19,000 X 2).

You must contact a SFDCP Retirement Counselor to see if you are eligible.

Military Catch-Up

If you were on leave from the City & County due to active military duty, you may be eligible for this type of catch-up.

Please call your SFDCP Retirement Counselors at 888-733-2748, option 2, to learn if you qualify.

*Important: You cannot combine the Special 457(b) Catch-Up and the Age 50+ Catch-Up contributions in the same tax year. Neither Prudential Financial nor its representatives are tax or legal advisors. We encourage you to consult your legal or tax advisor with specific questions.

Unused Vacation Hours Can Help Fund Your Future

Turn time into money! You can deposit the value of your unused vacation hours (up to the annual IRS contribution limit) to your account when you separate or retire. The benefit? The extra money can grow along with your other SFDCP investments, and you won't have to start withdrawing until you turn 70½. The catch: You must request the deposit before your last day of employment. To get started, contact an SFDCP Retirement Counselor.

What Happens to Your Plan Loan When You Retire?

If you have an outstanding loan, you must pay off the full remaining balance within 90 days of your separation from City and County employment. The Plan will not accept loan payments outside of the payroll deduction repayment arrangement, except to pay off your loan.

If you do not pay off your remaining loan balance within 90 days, your loan will be in default and shall be deemed “distributed.” The loan balance that is deemed distributed is taxable, although no actual distribution takes place. You will receive a 1099R the following calendar year.

Loan payoff quotes are available from Prudential by calling 888-SFDCP-4U (888-733-2748). Representatives are available to assist you weekdays, from 5 a.m. to 6 p.m., PT. Loan payoff quotes are valid for 14 days.

Loan payoffs must be made by certified check or money order.

Distribution Options: Taking Income from Your Account

The decisions you make can greatly impact your retirement lifestyle. When you stop working for the City and County of San Francisco, you don't have to take immediate action with your SFDCP account. While you won't be able to add money unless you roll in balances from another “qualified” retirement account, you can leave your money invested in the Plan, and won't be required to start withdrawing until you reach age 70½. At that time, your annual federally required minimum distribution (RMD) amount will be calculated for you, so please keep your address current on your account.

Review full details on your distribution options, including rules on tax withholding.

Upon separating or retiring, you can:

  • Speak to a SFDCP Retirement Counselor about your options.
  • Keep your money in the SFDCP.
  • Take a partial withdrawal.
  • Set up installment or periodic withdrawals.
  • Receive a full “lump-sum” distribution.
  • Invest in an annuity.
  • Roll your money over to a new employer's retirement plan or an IRA.

Your Money Can Stay Where It Is!

Remember, you can stay invested through the SFDCP even after you leave employment or retire. Our commitment to you will continue, so you can relax and enjoy the many benefits the SFDCP provides:

  • A wide range of low-cost investment options screened and monitored by the Retirement Boardplus a Self-Directed Brokerage Account for even more choices.
  • Penalty-free access to your money at any age.
  • No-cost, unlimited access to personalized guidance from licensed Retirement Counselors.

Self-Directed Brokerage products and services are offered through Prudential Investment Management Services LLC (PIMS), Newark, NJ, a Prudential Financial company. Self-Directed Brokerage Accounts are carried and maintained by National Financial Services LLC pursuant to a clearing agreement with PIMS. Retirement Counselors are registered representatives of PIMS.

Considering a rollover out? Before you make the move, make sure you know the facts: Review Questions to Ask Before a Rollover Out