Retirement decisions can affect taxes, beneficiaries, survivor options, and estate planning. We help FRS members organize these conversations and coordinate with qualified tax and legal professionals when needed.
Independent fiduciary guidance · Educational planning · Not affiliated with or endorsed by FRS
Tax planning and estate planning aren’t separate from retirement planning — they are part of it. The choices an FRS member makes about pension options, DROP payout, IRA withdrawals, beneficiary designations, and survivor benefits flow directly into how income is taxed today, how assets transfer to a spouse or family, and how a plan holds together over time. Our role is to help organize those decisions and coordinate with the qualified tax and legal professionals who provide specific advice in those areas.
Benowitz Wealth Management does not provide tax or legal advice. We coordinate with tax and legal professionals to help clients organize the financial side of retirement planning. Specific tax guidance should come from a qualified tax professional, and estate documents should be drafted by a licensed attorney. The educational content below describes the planning conversations we help organize — not advice we provide.
For many FRS members, the years just before and just after retirement are some of the most tax-consequential of their lives. Compensation changes. Pension payments begin. DROP balances become available. IRA accounts shift from accumulation to withdrawal. Social Security claiming decisions get made. Each of those events affects taxable income, and the choices made in one area can have ripple effects across others.
The point of tax coordination is to bring those moving pieces into one picture so they can be reviewed together — and so the appropriate questions can be raised with a qualified tax professional before decisions become irreversible.
One of the more common tax-related questions for FRS members involves the DROP balance. At the end of DROP, the accumulated balance becomes available, and the choice of how to receive it has tax implications.
A lump-sum distribution generally results in the taxable portion being treated as ordinary income in the year received. Depending on the size of the balance, that can be a substantial tax event — one that may push household income into a higher bracket for that year, affect Medicare premium calculations through IRMAA, or interact with other income-based determinations. A direct rollover to an eligible retirement account generally preserves tax-deferred status, but trades immediate access for future tax-deferred treatment, with its own set of considerations.
Neither path is universally better. The right choice depends on the specific tax situation, income needs, and broader plan. Reviewing the question with a qualified tax professional before the distribution is finalized is generally a prudent step. We help organize the planning questions in advance of that conversation.
FRS pension payments are generally treated as taxable income at the federal level. Florida does not have a state income tax on retirement income, which simplifies the state-level picture for Florida-resident retirees. The federal picture, however, is shaped by the combination of pension income, Social Security benefits (a portion of which may be taxable depending on overall income), IRA distributions, and any other sources of income.
Required minimum distributions (RMDs) from tax-deferred accounts add another layer. Once RMDs begin, they generally cannot be avoided, and they can interact with other income to produce tax surprises if not planned for. Coordinating pension income with the timing and structure of IRA withdrawals — both before and after RMDs begin — is a recurring planning conversation.
One of the most common — and most consequential — planning oversights involves beneficiary designations. Retirement accounts, IRAs, life insurance policies, and similar accounts generally pass to whoever is listed on the beneficiary designation, often regardless of what a will says.
That makes beneficiary designations a quiet form of estate planning. An outdated designation — naming a former spouse, an estate where direct beneficiaries would have been preferable, or no beneficiary at all — can have effects that don’t show up until after the account holder has died, when corrections are difficult or impossible.
Reviewing beneficiary designations across all retirement accounts, periodically and after life events such as marriage, divorce, the birth of a child, or the death of a named beneficiary, is one of the more useful planning habits an FRS member can develop.
The FRS Pension Plan offers multiple retirement options that vary in how monthly payments are calculated and what, if anything, continues to a survivor after the retiree’s death. Some options provide a higher monthly payment to the retiree but no continuation to a survivor. Others provide a reduced monthly payment in exchange for continued payments to a designated beneficiary.
The choice between options interacts with marital status, the financial situation of a surviving spouse, the presence of other assets, life insurance, and the broader estate plan. Importantly, the option chosen at retirement generally cannot be changed once finalized — making this one of the more deliberate decisions in the FRS retirement process. The planning conversation typically considers not just the retiree’s needs but the surviving spouse’s projected income picture if the retiree were to pass first.
A complete plan generally includes documents that describe how assets should be handled in the event of incapacity or death. These documents are drafted by a licensed attorney, not by a financial advisor. Common documents discussed in retirement planning conversations include:
The financial planning work is to make sure these documents are coordinated with how retirement accounts are titled, how beneficiaries are named, and how the broader plan is structured. Drafting and updating the documents themselves is work that belongs to a qualified estate attorney.
Most FRS members nearing retirement have — or will benefit from having — relationships with a qualified tax professional and a qualified estate attorney. Coordinated planning across all three relationships (advisor, CPA, attorney) tends to produce better outcomes than three siloed conversations.
With your permission, we work directly with your CPA and attorney so the financial, tax, and legal sides of your plan stay aligned. If you don’t have those relationships in place, we are happy to discuss what to look for and to make introductions to qualified professionals when appropriate. The choice of CPA or attorney is always the client’s.
An introductory conversation is a no-pressure way to look at how tax, estate, and retirement decisions fit together for your situation.
Educational coordination of tax, beneficiary, and estate questions around FRS retirement decisions.
Bring pension, IRA, Social Security, and other income into one tax-aware picture.
Organize the tax questions worth raising with a CPA before finalizing a DROP payout.
Review beneficiary designations across FRS, IRAs, 457(b), 403(b), and other accounts.
Review FRS pension option choices and how they affect a surviving spouse.
Coordinate IRA, 457(b), 403(b), and other retirement account decisions with the broader plan.
Help organize estate planning conversations so they fit with the financial plan.
Work alongside your CPA on tax-aware retirement planning questions.
Work alongside your estate attorney on document and beneficiary coordination.
Common questions about tax and estate coordination for FRS members.
No. Benowitz Wealth Management does not provide tax or legal advice. We coordinate with qualified tax professionals and estate attorneys to help organize the financial side of retirement planning.
We can help organize the questions and review the planning implications of different DROP payout choices. Specific tax advice should come from a qualified tax professional. We are happy to coordinate with your CPA or refer you to one if needed.
FRS pension payments are generally treated as taxable income at the federal level. Florida does not have a state income tax on retirement income. Individual tax situations vary, and a qualified tax professional should review yours.
A DROP distribution can be a significant tax event depending on the option chosen. Many members benefit from speaking with a qualified tax professional before finalizing a decision. We help organize the planning questions in advance of that conversation.
No. Estate documents such as wills, trusts, powers of attorney, and healthcare directives should be drafted by a licensed attorney. We coordinate with estate attorneys when these conversations come up.
Beneficiary designations on retirement accounts, IRAs, life insurance, and similar accounts generally control who receives those assets — often regardless of what a will says. Outdated or missing beneficiary designations are a common planning oversight.
Yes. With your permission, we work directly with your CPA, estate attorney, and other professionals so that planning decisions are coordinated rather than siloed.
Commonly discussed documents include a will, possibly a revocable trust, durable power of attorney, healthcare surrogate designation, and a living will or advance directive. Specific recommendations should come from an estate attorney based on your situation.
FRS pension survivor option choices affect what a surviving spouse or beneficiary receives. These choices generally cannot be changed once retirement is final, so they should be reviewed carefully alongside other estate planning decisions.
Use the contact form or scheduling button on this page, or email info@benowitzwealth.com.
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.
Understand your FRS Pension and DROP options before, during, and after retirement.
Coordinate pension, Social Security, and investment accounts into a retirement income plan.
Review supplemental retirement accounts alongside FRS benefits.
Plan 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 coordination with qualified tax and legal professionals when needed.
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.
