Your FRS Pension and DROP decisions may shape your retirement income for years to come. Benowitz Wealth Management helps Florida public employees understand their options, organize key deadlines, and build a retirement plan around their FRS benefits.
Independent fiduciary guidance · Educational planning · Not affiliated with or endorsed by FRS
For most Florida public employees, the Florida Retirement System represents one of the most important pieces of their financial life. The decisions you make about your FRS Pension Plan, the Deferred Retirement Option Program (DROP), and how those benefits coordinate with the rest of your retirement plan can shape your income for decades. Our role is to help you understand what you have, organize the relevant decisions, and build a plan that fits your goals.
The FRS Pension Plan is a defined benefit plan, which means it pays a monthly retirement benefit calculated using a formula based on your years of service, your average final compensation, your membership class, and the option you select at retirement. Unlike a 401(k) or IRA, the monthly benefit is not tied to investment performance — it is determined by the formula and the choices you make at retirement.
Different membership classes — Regular Class, Special Risk Class, Senior Management Service Class, and others — have different accrual rates and eligibility rules. Special Risk members, which generally include law enforcement officers, firefighters, and certain other categories, often have earlier eligibility and a different formula structure.
Understanding which class you belong to, your years of creditable service, your projected average final compensation, and the implications of each retirement option is a foundational planning step. The official source for current rules and benefit estimates is the Florida Division of Retirement.
DROP — the Deferred Retirement Option Program — is one of the most consequential decisions an eligible FRS Pension Plan member can make. When you enter DROP, you are effectively setting your retirement date for benefit calculation purposes. Your monthly pension is calculated based on your service and compensation at that point, and rather than being paid to you, it accumulates with interest in a DROP account while you continue working for an FRS-covered employer.
The decisions surrounding DROP — when to enter, how long to participate within program limits, what pension option to select, who to name as a beneficiary, and how to handle the DROP balance at the end — are layered and largely irreversible once finalized. Many members benefit from beginning these conversations well before they become eligible, so there is time to think through the tradeoffs without rushing.
Before entering DROP, several planning questions are worth reviewing carefully:
Exiting DROP triggers several decisions that often need to be made on a timeline:
At the end of DROP, you generally have several options for the accumulated balance. Each option has tradeoffs.
A lump-sum distribution delivers the full balance to you, but the taxable portion is generally treated as ordinary income in the year received, which can result in a substantial tax liability and may affect Medicare premium calculations and other income-based factors.
A direct rollover to an IRA or other eligible account generally allows the balance to continue growing tax-deferred. This option preserves flexibility around future withdrawals but also introduces investment responsibility and choice of custodian. A rollover is not automatically the right choice — investment options, fees, withdrawal flexibility, beneficiary planning, and tax considerations should all be reviewed before deciding.
A partial distribution combines elements of both — taking some of the balance now and rolling over the rest. This can be useful in certain planning situations but requires coordination.
These are general descriptions. Specific tax treatment and procedural details should be reviewed with a qualified tax professional and confirmed against current FRS and IRS rules before any decision is finalized.
For most FRS retirees, the pension is a foundational income stream — but it is rarely the only one. A complete retirement plan typically considers how the FRS pension coordinates with Social Security, IRA accounts, 457(b) or 403(b) balances, personal savings and brokerage accounts, healthcare costs including Medicare, and household spending needs.
The order in which you draw from different accounts, when you claim Social Security, how you manage inflation over a multi-decade retirement, and how you build in flexibility for unexpected expenses all affect how the plan holds up. Our work is to help bring these pieces together into a coordinated plan rather than a series of disconnected decisions.
An introductory conversation is a no-pressure way to ask questions, review your situation, and decide whether further planning makes sense.
Educational planning support across the decisions FRS members face before, during, and after DROP.
Review your projected benefit, membership class, service credit, and pension option choices.
Organize the calendar of decisions around DROP entry, participation, and exit.
Review your options for the DROP balance and coordinate the transition into retirement.
Walk through the considerations involved in a potential rollover decision.
Coordinate pension, Social Security, and investment accounts into a retirement income plan.
Review pension option choices and how they affect a surviving spouse or beneficiary.
Organize tax-related planning questions for coordination with your CPA.
Review beneficiary designations across FRS, IRAs, 457(b)/403(b), and other accounts.
Common questions from Florida public employees about FRS Pension and DROP planning.
DROP stands for Deferred Retirement Option Program. It allows eligible FRS Pension Plan members to effectively “retire” for benefit calculation purposes while continuing to work for an FRS-covered employer for a defined period. During DROP, pension payments accumulate in an interest-bearing account rather than being paid to the member each month. At the end of DROP, the member separates from FRS-covered employment and receives the accumulated DROP balance along with their ongoing monthly pension. For current eligibility and program rules, the official source is the Florida Division of Retirement.
Many members benefit from beginning DROP-related conversations well before they become eligible. Decisions about DROP entry timing, pension option selection, beneficiary designations, and how DROP fits into a larger retirement income picture can take time to think through. Earlier planning generally allows more time to organize questions.
When you exit DROP and separate from FRS-covered employment, you typically receive your accumulated DROP balance and begin receiving your monthly pension payments directly. The DROP balance can generally be received as a lump sum, rolled over to an eligible retirement account, or in some cases taken as periodic payments — each option has different tax and planning implications that should be reviewed.
DROP balances may generally be rolled over to an eligible retirement account such as an IRA, subject to IRS rules and FRS procedures. A rollover is not automatically the right choice for every member. Investment options, fees, account features, tax considerations, withdrawal flexibility, and individual financial goals should all be reviewed before a decision is made.
No. Whether to roll over a DROP balance is a personal decision that depends on factors including your tax situation, retirement income needs, investment preferences, fee comparisons, beneficiary considerations, and overall financial plan. We help clients review these factors so they can make an informed decision.
FRS pension payments are generally treated as taxable income at the federal level. Florida does not have a state income tax on retirement income. Your specific tax situation depends on your overall income, deductions, and filing status. We coordinate with qualified tax professionals — we do not provide tax advice.
We help clients understand the available options, organize the relevant questions, and review the planning implications of each path. The final decision is always the client’s. We do not have authority over FRS benefit elections.
No. Benowitz Wealth Management is an independent registered investment adviser. We are not affiliated with, endorsed by, or sponsored by the Florida Retirement System, the State of Florida, or any public employer.
Yes. We work with FRS members across membership classes, including Special Risk members such as law enforcement officers and firefighters. Special Risk members often face distinct planning considerations around earlier retirement eligibility, which we incorporate into the conversation.
You can use the scheduling button on this page, fill out the contact form, or email us at info@benowitzwealth.com. The initial conversation is intended to help us understand your situation and determine whether we are a good fit.
This checklist is designed to help Florida public employees organize key questions around FRS benefits, DROP, pension income, retirement accounts, taxes, healthcare, Social Security, Medicare, and long-term retirement planning.
Related planning resources for FRS members and Florida public employees.
Coordinating pension, Social Security, and investment accounts into a retirement income plan.
Reviewing supplemental retirement accounts alongside FRS benefits.
Organizing tax, beneficiary, and estate questions around retirement decisions.
Planning Medicare, HIS, and retiree health coverage before retirement.
Planning considerations specific to Special Risk law enforcement members.
Planning considerations specific to Special Risk fire service members.
Planning considerations for Florida educators with FRS and 403(b) accounts.
Retirement planning considerations for Florida state employees.
Retirement planning considerations for Florida county employees.
Independent fiduciary planning for Florida public employees. Educational conversations. No pressure.
Disclaimer: Benowitz Wealth Management is an independent registered investment adviser. This content is for educational purposes only and should not be considered personalized investment, tax, insurance, or legal advice. Benowitz Wealth Management is not affiliated with, endorsed by, or sponsored by the Florida Retirement System, the State of Florida, any county government, city government, school district, public employer, or public agency. FRS rules, benefits, and retirement options may change. Please consult the appropriate agency, tax professional, insurance professional, or legal professional before making decisions regarding your benefits or retirement plan.
