Deferred Retirement Option Program (DROP)

At Hughes Financial Services, we have specialized in retirement planning for public employees in Virginia for almost 30 years. We understand the complexity of your retirement options and will walk you through the process to help you increase your retirement benefits, understand any tax implications, and help you reach your financial goals.  

The Deferred Retirement Option Program (DROP) is most often available for state and federal workers and those in what would be considered a “public sector” job. This may include:

  • Police Officers
  • Firefighters
  • Teachers
  • Postal Workers
  • Government Officials

Taking advantage of a DROP from your employer can provide a very nice increase in your defined benefit or pension amount because of the unique way a deferred retirement option works.

However, making investment choices when planning for retirement can be challenging as you'll need to navigate through decisions about asset class allocations, investment strategies, and market risks. Some may enjoy this type of challenge but for others, making these choices can be daunting or you may feel you don’t have the time, skill, or experience to “do it yourself.” These are not the only factors that will need to be addressed; pre-retirees will also need to consider tax implications, survivor options, COLA’s, and pay increases.

Before you determine whether you should enroll in DROP once eligible for retirement, you should make sure you understand what it is and how it could benefit your retirement plan.

Please take a moment to read through some of our articles on early retirement for public employees:

5 Key Areas of Financial Planning & the Questions You Need to Answer

Four Phases of Retirement

The Power of Your Beneficiary Election

Nine Risks to Retiring Early