For LEOFF 2 members who were active or retired on or before Feb 1, 2021: compare the tiered multiplier against the flat 2% multiplier + lump-sum benefit, in today's dollars over your expected lifetime.
Estimates only, for illustration and discussion purposes — not tax, legal, or investment advice, and not a substitute for your official DRS benefit estimate. The tiered multiplier (2% years 1–15, 2.5% for years after 15 through 25, 2% beyond 25) and the lump-sum alternative ($100 per month of total service credit earned, paired with a flat 2% multiplier) reflect LEOFF Plan 2's benefit-enhancement rules for members active or retired on or before Feb 1, 2021 — this election is only offered to members with more than 15 years of service credit and is irrevocable once made at retirement; members with 15 years or less receive the 2% multiplier and the lump sum automatically, with no election needed (this tool still shows the comparison for reference in that case). A lump sum of $20,000 or more can also be used to purchase an annuity through DRS, which this tool does not model. If the lump sum is taken as a direct payment rather than rolled over, DRS must withhold 20% for federal taxes up front — a cash-flow timing detail distinct from the marginal tax rate assumed here. The tool does not add a 10% early-withdrawal penalty, since LEOFF members separating from service at age 50+ are generally exempt as "qualified public safety employees" under IRC §72(t)(10) — confirm this still applies to the specific situation. Ordinary income tax is not modeled separately: it would apply at the same rate to the pension income in both options and to the lump sum's eventual withdrawals (whether taken from a 457 plan or from the pension itself), so it scales both options down by the same factor and does not change which one compares better — apply your own marginal tax rate to any figure shown here to estimate actual take-home dollars. Capital gains/dividends tax is modeled because it is the one tax that treats the two options differently, dragging down the lump sum's investment growth only when it's held in a taxable account rather than rolled into a tax-deferred plan like a 457. The investment return you enter is a nominal (pre-inflation) rate; the tool taxes that nominal growth each year (capital gains/dividends in the taxable-account mode; nothing annually in the 457 mode, since it's tax-deferred), then converts everything to today's dollars for the comparison, so the "annual" and "lifetime" figures are directly comparable to the pension. LEOFF 2's COLA is capped at 3% annually (based on Seattle-area CPI, with any excess banked for future years); this tool models that explicitly — if your assumed inflation rate is 3% or less, the COLA fully offsets it and the pension holds its purchasing power flat in today's dollars, but if you assume inflation above 3%, the tool shows the pension's real value gradually eroding, since LEOFF's coverage is capped while true inflation is not (the banking-forward of excess COLA in low-inflation years is not modeled). Life expectancy uses the current SSA period life table for males (2023 experience, as used in the 2026 Trustees Report), interpolated between whole ages; actual longevity varies widely, and this tool does not account for survivor/joint benefit elections, Social Security offsets, or future plan changes. Confirm your own eligibility and exact figures with the WA Department of Retirement Systems (drs.wa.gov) before making an election.