Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington State public employees.

A decision two decades away

Picture a 54-year-old budget analyst for a Washington county. She has 26 years in PERS Plan 2.

Her husband is 55 and works maintenance for a school district in SERS Plan 2. Between them they have about $750,000 saved, most of it in pretax DCP.

They want to retire at 58.

To her, required minimum distributions feel like someone else's problem. That's a fair instinct. Anyone born in 1960 or later has an RMD age of 75 [2].

Still, a few choices this couple makes in their 50s and 60s will decide how much control they have once that day comes.

You pick the calendar

An RMD is figured by dividing your account balance from the end of last year by a factor from an IRS table [1]. After your first one, each year's RMD is due by December 31 [1].

That's the whole requirement. A single January withdrawal counts the same as twelve monthly checks.

For Washington public employees, part of the picture is simpler than people expect. There's no RMD tied to your monthly DRS pension [3].

The RMD applies to the pretax money in your DCP and any Plan 3 investment account [3]. Voya, the DRS record keeper, sends a notice with your calculated amount. You can take withdrawals yourself during the year. Whatever's left gets paid out automatically in October or November [3].

So if this couple does nothing, their schedule gets picked for them. That might be fine. It's still worth knowing it's a choice.

Market timing is mostly a coin flip

Waiting until fall keeps the money invested and tax-deferred a few months longer. An early withdrawal avoids the risk of the account dropping first. Nobody knows which will work out in a given year.

I don't spend much energy here. My approach is to keep about five years of withdrawals in high-quality, short-term bonds. When the RMD comes out of that reserve, the stock market's mood that month matters a lot less.

How it fits the household budget

In this example, the pensions cover the basics. The DCP money is for travel and bigger projects like a new roof. Steady spending pairs well with monthly payments. Lumpy spending may be simpler with one withdrawal.

Either way, RMDs are taxed as ordinary income [7]. A bigger income year can also change how much of your Social Security is taxed and what you pay for Medicare [7].

What drives the tax bill is everything else that lands in the same year.

Where the sequence trips people up

In any year an RMD is due, the first dollars you take out count toward that RMD [6]. The required amount can't be rolled over [5], which means it can't be converted to a Roth either [6].

So a 76-year-old planning a Roth conversion has to take the RMD out first. If the DCP is set to pay the RMD in the fall and the conversion is planned for March, the RMD needs to move up.

Charitable giving has its own sequence. Starting at age 70½, you can give directly from an IRA to a charity, and that gift counts toward your RMD [4]. That option isn't available from DCP or a Plan 3 account, which is one reason some people roll money out to an IRA [3].

They'd also want to make those gifts before taking the rest of the RMD. Once the RMD is satisfied, a later gift can't go back and count toward it [4].

Why this matters at 54

The best time to shrink future RMDs is before they start.

If she retires at 58, she has years before age 75 when her income may be lower than it will ever be again. Pretax DCP money can be converted to Roth inside DCP [8], and Roth DCP balances don't have an RMD [3].

The first RMD has a wrinkle of its own. You can push it to April 1 of the next year [1], but then you take two RMDs in the same tax year [1, 7]. With a pension already filling the lower brackets, that can be a costly way to save a few months.

Choosing a schedule that fits

When the time comes, a Roth conversion planned for that year is a good reason to take the RMD early. Charitable gifts from an IRA work best when they happen before the rest of the RMD comes out.

Monthly payments suit people who use the RMD for regular spending. If none of that applies to you, the automatic fall payment is a reasonable default.

A small step for now

You don't need to decide any of this today.

It is worth logging into your DRS account and checking how much of your DCP is pretax and how much is Roth. If most of it's pretax, the years between retirement and 75 deserve a closer look while you still have time to use them.

If you’re concerned about your current financial plan and would like to explore professional help, consider reaching out.

I specialize in helping Washington Public employees who are nearing retirement or are retired, reduce taxes, maximize pensions, and retire stress-free.

No sales pressure. No obligations. Just professional guidance to help you make the best decision for your financial future.

-Seth Deal

Sources

[1] Internal Revenue Service. "Retirement Topics - Required Minimum Distributions (RMDs)." Last reviewed April 8, 2026. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds​

[2] Vanguard. "RMDs: What You Need to Know." https://investor.vanguard.com/investor-resources-education/retirement/rmd​

[3] Washington State Department of Retirement Systems. "Episode 75 – RMDs Explained: What to Expect When You Turn 73." November 5, 2025. https://www.drs.wa.gov/episode-75-rmd-explained-podcast/​

[4] Internal Revenue Service. "Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA." November 8, 2022. https://www.irs.gov/newsroom/seniors-can-reduce-their-tax-burden-by-donating-to-charity-through-their-ira​

[5] Internal Revenue Service. "Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)." https://www.irs.gov/publications/p590b​

[6] Electronic Code of Federal Regulations. "26 CFR 1.408A-4, Converting Amounts to Roth IRAs." https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/section-1.408A-4​

[7] Fidelity. "Options for Taking Your First Required Minimum Distribution (RMD)." December 15, 2025. https://www.fidelity.com/learning-center/personal-finance/retirement/options-taking-first-rmd​

[8] Washington State Department of Retirement Systems. "DCP Enrollment Guide." https://www.drs.wa.gov/wp-content/uploads/2021/07/DCP-Enrollment-Booklet.pdf​

Seth Deal is an investment advisor representative of LifeFocus Financial Advisors, LLC, a registered investment adviser. This email is for informational purposes only and does not constitute a recommendation to buy or sell securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and risk tolerance.

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