Your Top 5 FRS Questions

Which is better, the FRS Pension Plan or the FRS Investment Plan?

Choosing between the two plans largely depends on individual circumstances:

Stability vs. Flexibility: If you value a predictable income and plan to work for a long time, the Pension Plan may be more suitable. Conversely, if you prefer to have control over your investments and are open to market risks, the Investment Plan could be the better choice.

Career Longevity: Those who anticipate a long career with the state may benefit more from the Pension Plan due to its guaranteed benefits after vesting. However, if you foresee changing jobs or retiring early, the Investment Plan might offer more advantages.

Ultimately, it's essential to assess your personal financial goals, risk tolerance, and career plans when deciding which plan is better for you.

What happens to my pension if I leave the school system early?

If you leave the Florida Retirement System (FRS) early, the impact on your pension depends on your vesting status. If you are vested (having at least eight years of service), you can access your pension benefits later, although taking an early retirement will result in reduced monthly payments. If you are not vested, you will not receive a pension and can only withdraw your contributions without any employer contributions. Thus, leaving early means you need to consider your years of service and whether you meet the vesting requirements to determine your pension eligibility.

(Back To top 5)

What is the FRS DROP Program?

The Deferred Retirement Option Program (DROP) allows eligible Florida Retirement System (FRS) members to "lock in" their retirement benefits while continuing to work. Once you reach normal retirement age and are vested, you can enter DROP, where your pension benefits are set aside and earn interest for up to 96 months (eight years). During this time, you keep earning a salary without accruing additional retirement benefits. After the DROP period ends, you can retire and access your accumulated benefits, helping you boost your retirement savings.

(Back To top 5)

What happens to my FRS DROP money after I leave the program?

After you finish your participation in the FRS DROP program, you have a few options for your DROP funds. You can roll over the money into the FRS Investment Plan to keep it growing, or you can withdraw it as a lump sum, though this may come with tax implications. If you choose not to invest it, the funds will be paid directly to you, and you'll need to manage any taxes on that withdrawal. It's important to think carefully about your options to make the most of your retirement savings.

(Back To top 5)

Should I put money in a savings account, or should I start a 403b?

Choosing between a savings account and a 403(b) plan depends on your unique needs:

A savings account is safe and gives you easy access to your money, but it usually has low interest rates. It's good for short-term savings or emergencies.

A 403(b) plan is designed for retirement savings. You can contribute pre-tax money, which lowers your taxable income, and your savings grow tax-deferred until you retire. This option is better for long-term savings, especially if your employer offers matching contributions.

If you're saving for retirement and can set the money aside, a 403(b) is typically the better choice. If you need quick access to your funds, stick with a savings account.

(Back To top 5)

Contact Elite Financial Group Today

Get personalized guidance for your pension and retirement options now.