DROP, from entry decision to exit playbook
DROP is a one-time decision that quietly compounds into one of the largest financial events of your career. This section walks through the whole arc — entering, sitting through the window, and handling the money when you exit.
Why DROP deserves its own section
DROP — the Deferred Retirement Option Program — lets eligible Pension Plan members “retire” on paper while still working. Your pension benefit freezes, and the monthly payments accumulate at a 4% interest rate inside the program for up to 96 months. When you leave DROP, you walk out with two things: a monthly pension for life and a lump-sum accumulation.
That lump sum is where most of the questions live. How is it taxed? What can you roll it into? What happens if you die during DROP? What does the right exit timing look like if your spouse is retiring around the same time?
We treat DROP as its own topic because the decisions inside it don’t look like anything else in retirement planning.
What you’ll find here
Guides in this section cover the full DROP arc — from deciding whether to enter, to understanding what happens during the window, to handling the rollover at exit. We also cover the edge cases that come up most often: dying during DROP, leaving early, and how DROP interacts with the HIS subsidy and Medicare timing.
A note on what this is — and isn’t
DROP decisions are mostly irreversible. We explain how the program works and what trade-offs each path creates, but we don’t tell you what to do. The right answer depends on your specific situation, your spouse, your health, your tax picture, and your reasons for working in the first place.
If you’d like help thinking through your specific numbers, you can get in touch.