By Steve Griffin, CFP® and Kelly Goldstein, CFP®
Navigating the Florida Retirement System (FRS) can feel like wading through unfamiliar waters. To help, our team of retirement planning professionals are able to assist Florida State, City, and County Employees with useful information to pursue an enjoyable retirement.
At Full Spectrum Financial Group, we genuinely appreciate working with the people who have helped our local community, and we fully understand the magnitude of the retirement decisions that need to be made. Many of those decisions are irreversible and can permanently affect people’s lives.
Offering professional retirement strategies is a way for us to help in a way that makes a lasting impact. We wrote this article to help prepare you for navigating the FRS’s key features and options.
Let’s get started!
UNDERSTANDING FRS PROGRAMS
The Florida Retirement System offers two types of retirement plans: the FRS Investment Plan and the FRS Pension Plan.
FRS INVESTMENT PLAN
The FRS Investment Plan is a defined contribution plan, in which employer and employee contributions are defined by law, but your ultimate benefit depends in part on the performance of your investment funds.
The FRS Investment Plan is funded by employer and employee contributions that are based on your salary and your FRS membership class (Regular Class, Special Risk Class, etc.). The Investment Plan directs contributions to individual member accounts, and you allocate your contributions and account balance among various investment funds.
Your Investment Plan retirement benefit is the value of your account at termination. Unlike the Pension Plan, there is no fixed benefit level at retirement.
FRS PENSION PLAN
The FRS Pension Plan is a defined benefit plan, in which you are guaranteed a benefit at retirement if you meet certain criteria. The amount of your future benefit is determined by a formula, based on your earnings, length of service, and membership class, and may be adjusted by a cost-of-living increase each July. If you are initially enrolled in the Pension Plan on or after July 1, 2011, you will not have a cost-of-living increase after retirement. Your benefit is pre-funded by your employee and employer contributions. The Florida Retirement System must ensure that sufficient funds are available when your benefits are due and bears the market risk and investment decisions.
COMPARING THE PLANS
Deciding between the two FRS plan options should be based entirely on your personal facts and circumstances.
To help you make the right decision, the FRS provides a side-by-side comparison chart.
Regardless of your decision, at Full Spectrum Financial Group, we analyze and project the amount of your payouts along with your other resources to see how well positioned you are throughout retirement.
INFORMATION ON THE DEFERRED RETIREMENT OPTION PROGRAM
Florida employees who meet the eligibility requirements can continue working and contribute a portion of their pay into a tax-deferred account through the Deferred Retirement Option Program (DROP). There are some limitations though, which you should discuss with your contact at the FRS. Before choosing DROP, carefully analyze how it affects your future pension projections and your present income needs.
If you decide to participate in DROP, we’ll show you the impact of your engagement and assess each pension option to determine which makes the most sense for your situation
LEARN THE FACTORS THAT AFFECT YOUR RETIREMENT STRATEGY
Before you can move forward designing your retirement, consider the factors that affect your strategy. Here’s a breakdown of what you need to determine:
Desired retirement age: Early retirement could potentially result in less time for your savings to grow.
Estimated retirement expenses: Determine your required retirement income. Don’t forget to factor in inflation and potential healthcare costs.
Existing savings and debts: Think about your savings and any existing debts that could impact your financial needs.
Social Security: Discover how Social Security affects your overall retirement income.
Once you determine the factors above, we plug your estimates into stress-test scenarios to determine if there are any threats to your current situation.
For example, are there any additional unexpected healthcare costs to consider? What if a bear market disrupts your investment portfolio? Or, worst case, what would happen if you or your spouse passed away prematurely?
Please note that this content is based on our current understanding of the Florida Retirement System which we have compiled from publicly available sources and is for your general informational purposes only. Please see the Florida Retirement System website for more complete and up-to-date information regarding your retirement system choices.
CONSULT WITH A PROFESSIONAL
Understanding the FRS doesn’t have to remain a mystery. Make it a priority to consult with your FRS contact and a professional financial planner to determine the strategy that aligns most closely with your risk tolerance and retirement goals.
Our team at Full Spectrum Financial Group is dedicated to helping our clients pursue their life goals and clarify their financial future.
To schedule a meeting, call (941) 866-6570 or email info@fullspectrumfinancialgroup.com.
ABOUT STEVE
Steve Griffin, CFP® is Principal and Founder at Full Spectrum Financial Group, a financial services firm based in Sarasota, Florida, offering innovative strategies to help clients develop a personalized plan that meets their needs for today and tomorrow. With over 20 years of financial planning experience, Steve creates custom, actionable solutions for his clients’ most complex challenges. From managing a family’s personal wealth to helping business owners focus on their big picture, he finds great fulfillment in empowering clients to make forward-focused decisions and feel more confident in their ability to reach their goals. Listening closely and taking an educated, unbiased approach, he’s able to bring organization and direction to clients’ financial lives.
Steve holds a degree in finance from the University of South Florida. Steve is held to some of the industry’s strictest standards of ethics and education as a CERTIFIED FINANCIAL PLANNER® (CFP®) professional. He’s actively involved in several prominent industry organizations, including National Association of Insurance and Financial Advisors (NAIFA), The Financial Planning Association, The Southwest Florida Estate Planning Council, and The Million Dollar Round Table (MDRT), which is the Premier Association of Financial Professionals and recognized globally as the standard of excellence for life insurance sales performance in the insurance and financial services industry.
Residing in Sarasota, Florida, Steve and his wife, Trish, enjoy the area’s great restaurants and world-class beaches. Outside of the office, Steve can be found golfing, watching sports, spending time with his daughters, and cheering on his grandkids at their events. With a great appreciation for the healing power of laughter, Steve enjoys watching funny movies or stand-up comedy. He also prioritizes his faith by volunteering at his church and reading Scripture daily. Connect with Steve on LinkedIn or via email at steve@fullspectrumfinancialgroup.com.
ABOUT KELLY
Kelly Goldstein, CFP® is a Financial Planner and Wealth Advisor at Full Spectrum Financial Group, a financial services firm based in Sarasota, Florida, offering innovative strategies to help clients develop a personalized plan that meets their needs for today and tomorrow. With a passion for building strategic, holistic plans, Kelly provides clients with clarity, simplifying even the most complex subjects. She enjoys getting to know clients on a personal level and seeing the impact small decisions can make on a client’s financial well-being and progress toward their long-term goals.
Kelly holds a bachelor’s degree from University of Central Florida and an MBA from Saint Leo University. Prior to becoming a financial advisor in 2017, she taught as an adjunct professor for business and marketing courses at Saint Leo University and worked as the office manager and para-planner for her father’s firm. In pursuit of her ongoing commitment to education and self-improvement, Kelly has earned her CERTIFIED FINANCIAL PLANNER® (CFP®) designation, and is currently enrolled to earn her Chartered Financial Consultant® designation.
In her free time, Kelly and her husband, Joe, enjoy golfing, traveling, spending time at the beach, and attending Tampa Bay Lightning hockey games. She is also involved in several industry and community organizations, including the Million Dollar Round Table (MDRT), the Lakewood Ranch Business Association (LWRBA), the Sarasota Chamber of Commerce, and the Sarasota-Manatee Human Resource Association. Connect with Kelly on LinkedIn or via email at kelly@fullspectrumfinancialgroup.com.
Steve Griffin and Kelly Goldstein are Financial Advisers offering Investment Advisory Services through Eagle Strategies LLC a Registered Investment Adviser and Registered Reps offering securities through NYLIFE Securities LLC FINRA/SIPC, a Licensed Insurance Agency. They are licensed to sell insurance through New York Life Insurance Company and may be licensed with various other independent unaffiliated insurance companies not in all jurisdictions.
Neither Full Spectrum Financial Group, nor NYL, nor its agents, provide tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professionals before making any decisions. Full Spectrum Financial Group is not owned or operated by NYLIC or its affiliates.