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Everything You Need to Know About Deferred Retirement Option Plans (DROPs)

By Motley Fool Retirement Team – Updated Dec 4, 2024 at 5:13PM

Key Points

  • DROPs let employees start pension collection while working by depositing it into a special account.
  • Funds in DROP accounts grow with interest and can be received upon retirement in various ways.
  • Choosing a lump sum from a DROP could lead to higher taxes, while rolling over funds offers tax-free growth.
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