The FRS Retirement Foundation

If you are not sure which system you are in

A few Florida public employees who look like FRS members are not. Some city police officers and firefighters belong to a local pension plan under Chapter 175 or Chapter 185 of Florida law instead, and a single department can even run both systems side by side.2 If your pension comes from a local plan like that, most of the rules in this book do not apply to you. Start with Appendix A, which shows how to tell which system you are in.

Which appendix is yours

• Special Risk Class members (law enforcement, corrections, firefighters, EMS) are in the FRS, but their years are worth more and their retirement dates come sooner. Read the chapters, then read Appendix A. You are also served in depth by the companion series, The Special Risk Retirement Blueprint Series, beginning with Book One, The Special Risk Retirement Foundation.
• Local plan members (Chapter 175 or 185 police and fire): read Appendix A first.
• University and college employees, and elected officials: you may have a plan choice other members never see. Read Appendix C.

The series

This is Book One of The FRS Retirement Blueprint Series. It covers the years before retirement, while the permanent decisions are still ahead.

Book Two, The Retirement Transition Playbook (forthcoming), covers the transition window: your benefit options, leaving DROP, rollovers, Social Security, Medicare, health coverage, taxes, the paperwork and the first ninety days.

Book Three, Staying Retired (forthcoming), covers the decades after: sustainable income, markets, taxes over time, long-term care, the survivor’s side of the plan, estate basics, purpose and the annual review.

Three ways to read it

• You are more than five years out. Read front to back. Time is the asset you have the most of, and Chapters 2 through 9 show how to use it.
• Retirement is getting close. Read Chapters 2, 5, 6, 7, 9 and 12 now, then move to Book Two when it is published. Do not skip Chapter 5’s pages on the 2nd Election. That is a one-time switch, and it only works while you are still on the payroll.
• You are the spouse or partner. Start with Chapter 1, then read Chapter 9 on the income estimate and Chapter 10 on getting the household ready. Near the end of every chapter there is a short card written for the two of you, because almost nothing in this system is truly a one-person decision.

What the boxes mean

A few kinds of boxes repeat throughout the book.

• Fictional examples. Every story about a person is fiction, and it is labeled that way. None describes a real person or an actual client. The people are invented to make a situation concrete, so you can see a rule land on someone before it lands on you.
• Hypotheticals. Worked numbers carry the label “Hypothetical,” with their assumptions stated. They show how a rule works. They are not projections or promises.
• Ask your team. The desk that can answer a question about your own situation: your HR or benefits office, the Division of Retirement, MyFRS, Social Security, a tax professional, a Florida attorney or an adviser.
• What can go wrong, what to check, and questions to ask. The ways a decision tends to break, the facts to confirm first, and the questions to bring with you.
• Chapter checklists and Reflect. Tasks you can tick off, and a few questions to think over.
• For you and your spouse. A short conversation to have at home.
• Benowitz Wealth Principles. A handful of short ideas, placed only where a chapter earns one.
• Worksheets. Chapters 1, 2, 5, 7, 8, 9 and 12 each carry a worksheet for your own numbers.

How the figures are dated

The rules and figures in this book are current as of the date on the copyright page. Amounts that change every year carry the year they apply to, such as “for 2026.” Florida’s retirement law changes often, and many of those changes take effect on a July 1.3 Before you act on anything, confirm it with the Division of Retirement, MyFRS or your employer. The rules, figures and dates are sourced in the Notes at the back, listed by page.

The decisions coming toward you

The decisions ahead are not small, and most of them are still yours to shape.

Which plan, and the one-time switch. Whether to stay in the plan you are in or use your 2nd Election, the single chance you get to move between the Pension Plan and the Investment Plan. It only works while you are still on the payroll.3

DROP. Whether and when to enter it. DROP opens once you reach normal retirement, now runs up to eight years, and pays 4% interest, under rules that are only a few years old.4

The money beside the pension. What to do with the 403(b) somebody sold you in the teachers’ lounge, or the 457(b) you signed up for and forgot.

The income estimate. How your pension, your Social Security and your savings are supposed to become one monthly paycheck. Most FRS jobs pay into Social Security, which surprises people who have heard hard stories from teachers in other states.5

The permanent choices. These belong to Book Two. When you retire or enter DROP you choose how the benefit is paid, and that choice becomes final the moment the first payment is cashed, deposited or credited to DROP.6

Notice what those decisions have in common. Every one of them is easier to get right with time, and several of them slam shut the moment you retire. The 2nd Election only exists while you are working. DROP timing turns on years of pay you have not earned yet. The side accounts do their best work over a decade, not a month. The people who arrive at the exit meeting relaxed are not the ones who are smarter about pensions. They are the ones who did the reading while it was still just reading.

This book’s argument is simple: the years before retirement are when understanding is cheap. Right now every item on that list is just information. You can learn it at your own pace, ask questions with no deadline breathing on you, run estimates and change your mind twice. Wait for the exit appointment, and the same subjects arrive as a stack of forms, a thirty-minute meeting and a signature line. Same decisions. Very different conditions for making them.

What this book will not do

It will not tell you which plan to pick, when to enter DROP, or which pension option protects your family best. Those answers exist, but not in general. They live in your service record, your hire date, your class, your health, your marriage and your bank statements. That is why every chapter ends by pointing you to the people and agencies who can see those facts: MyFRS and the Division of Retirement, your HR office, a tax professional, a Florida attorney, a fiduciary adviser. The book’s job is to make you the best-prepared person in every one of those conversations.

There is no product in these pages, no fear about the pension, and no pitch. Just the belief this firm builds everything on: understanding comes before action.

A word on tone, since this is a topic people are often quietly anxious about. You will not find any hand-wringing here about whether the pension will “be there.” It is a large system that pays hundreds of thousands of Floridians every month, and scaring you about it would be exactly the move that made this audience suspicious of advisers in the first place. The honest posture is simpler: the pension is one strong piece, it is not the whole picture, and the parts around it are where your attention pays off.

How the book is built

The chapters run in three parts.

Part One, How Your Retirement Is Built (Chapters 1 to 5), explains your class and the parts of the benefit formula, then takes on the Pension Plan, the Investment Plan and the choice between them, including the 2nd Election.

Part Two, DROP and the Money Beside the Pension (Chapters 6 to 8), covers what DROP is, why its timing matters, and the 457(b), 403(b) and IRA accounts you may have built on the side.

Part Three, Getting Ready (Chapters 9 to 12), turns all of it into an honest income estimate and a household that is ready. It closes with a field catalog of common mistakes and a countdown that becomes a calendar: ten years out, five, three, one, and the last ninety days.

Three appendices follow the chapters. Appendix A is for members who may not be in the plan the chapters describe, including Special Risk members and members of local police and fire plans. Appendix B covers health coverage in the years between an early retirement and Medicare. Appendix C is for university and college employees, elected officers, and other classes with their own rules.

You do not have to read it all at once, and you do not have to read it alone. The first chapter starts where most of this starts: with the discovery that your retirement does not work like your neighbor’s.

Your retirement was built differently, on purpose

If you have spent your career in Florida public service, your retirement does not work like the retirements you see in commercials, and the sooner that is said plainly, the sooner the rest makes sense.

Most private-sector retirement runs on one machine: an account. A 401(k), owned by the worker, filled by contributions, riding the market. Simple to explain, easy to check on a phone, and entirely the worker’s problem if it comes up short.

Your retirement runs on a system. The Florida Retirement System is one of the largest public retirement systems in the country, and inside it you have not one machine but several, interlocking. There is a core plan, either the Pension Plan or the Investment Plan.1 There may be a stretch called DROP. There is a health insurance subsidy for retirees, the HIS. There are voluntary side accounts with names like 403(b) and 457(b). And on top of nearly all of it, there is Social Security, because most FRS jobs pay into it, a fact that surprises people who have heard hard stories from teachers in states where they do not.2

Those pieces are not redundant. Each one covers a different risk. The core plan is built to keep a check coming for as long as you live, however long that turns out to be. The side accounts are money you control and can reach on your own terms. The HIS helps with the cost of coverage in retirement. Social Security adds a second promised check with its own yearly raise. Health coverage, if you leave before 65, has to bridge the years until Medicare. No single piece is the whole answer, which is exactly why “I have a pension” is not the same as “I have a plan.”

The strength of the system is real. Much of your retirement can arrive as a promised monthly check, backed by a formula written in law rather than by whatever the market did last year. When the market falls, that check does not. The weakness is real too. The rules are set by the Legislature, which means they change, and the system speaks in forms, deadlines and statute numbers rather than plain English. A pension is one part of a plan, and the plan is the rest of this book.

The 2011 line running through every break room

Here is the fact that explains most of the confusion in most FRS break rooms: there are two versions of the Pension Plan, and the date you were first hired decides which one is yours.

What counts is your initial enrollment date in the FRS, not the day your current employer hired you. A member first enrolled before July 1, 2011 is in the older tier. A member first enrolled on or after that date, and July 1, 2011 itself falls on the later side, is in the newer one.3 The line moves four things.

Two of those words carry a lot of weight, so here they are in plain terms. To be vested is to have worked long enough that the pension is yours to keep even if you leave; before that point, the employer-funded share is not yet yours. Normal retirement is the first point at which you can start your full benefit with no early-retirement reduction, reached either at a certain age or after a certain number of years, whichever comes first. The 2011 line moved both of those posts for anyone hired from that date on.

Your average final compensation, your AFC, is the average of your highest-paid fiscal years, and it is one of the three numbers the benefit formula runs on.4 Whether that average uses your best five years or your best eight depends entirely on which side of the line you are on. For most careers those highest years cluster near the end, but they do not have to, and the formula takes the highest ones wherever they fall.

This is why the veteran at the next desk is a poor guide to your own retirement. Two teachers in the same hallway, two clerks in the same office, can vest under different rules, average their pay over different spans, and reach normal retirement in different years, and neither of them was ever told. Half the confident retirement advice traded in Florida break rooms is accurate for the person giving it and wrong for the person hearing it.

The first discipline of FRS planning is learning which rulebook is yours. Not the one your favorite coworker swears by, not the one from a workshop you half remember, not the one that applied to a friend who retired six years ago under rules that have since moved. Yours. Everything in the rest of this book assumes you have that page in front of you, which is why this chapter ends by helping you build it.

The rules moved again, recently

The other reason yesterday’s knowledge fails is that the Legislature has been busy, and the changes do not arrive with a note explaining what they mean for you.

In 2023, a large bill known as SB 7024 rebuilt DROP. It removed the old entry window, set the maximum at 96 months, and raised the interest rate to 4%. The same bill raised the retiree Health Insurance Subsidy to $7.50 a month for each year of service, with a $45 minimum and a $225 maximum, and it boosted Investment Plan contributions.8 Those pieces reach across the whole system. That same bill also restored Special Risk normal retirement to age 55 or 25 years of Special Risk service, for every member in that class. If you are not in the Special Risk Class, that particular change is not yours, and Chapter 2 and Appendix A explain who is.

Then, in 2026, the Legislature added a minimum cost-of-living adjustment: a 1.5% floor under the yearly raise, beginning after the fifth anniversary of retirement.9 Read that sentence carefully, because it is the one most likely to be misread in your favor. The 2026 floor is for eligible Special Risk retirees only. It does not reach the Regular Class. If your career is all on the later side of the 2011 line and you are not Special Risk, your formula COLA is zero, and the 2026 floor does not change that. Under current law, your pension check would be flat, like Dane’s. That is not a detail. For a retirement that may last thirty years, whether the check rises with prices is one of the largest facts about it, and Chapter 3 takes the COLA apart in full.

A flat check is easy to underestimate. At first, $1,200 a month feels like $1,200 a month. But prices do not hold still. Twenty years of even modest inflation quietly cuts what that same check buys, and a Regular Class member with no COLA feels all of it. This is not a reason to fear the pension. It is a reason to know your own COLA fraction early, so that the rest of your plan, the savings and the Social Security timing, can carry what the pension check will not. Chapter 3 works the COLA arithmetic in full, and Chapter 9 puts every source of income on one page.

None of this is a reason to panic about the pension. It is a reason to date-stamp what you know. The members who do well are not the ones who memorized the rules once. They are the ones who write down what they know, note the date they checked it, and check it again.

The system in six dates

Florida’s retirement system moves, usually slowly and occasionally all at once. Six dates carry most of the history that still shapes your benefit. None of them arrived with a letter explaining what it changed for you, which is one more reason to keep them on a single page. Tape this list inside your planning folder.

• December 1, 1970. The FRS begins, consolidating a patchwork of public pensions. Anyone hired from this date by the state, a county or a school board is a compulsory member; cities and special districts can choose to join.10
• July 1, 2002. The Investment Plan takes its first members. For the first time, most FRS members can choose between a formula and an account.11
• July 1, 2011. Members begin paying 3% of their pay. Members first enrolled from this date need eight years to vest, average their pay over eight years, and reach Regular Class normal retirement at 65 or 33 years. Service earned from this date adds nothing to the COLA. The line through every break room is drawn.12
• July 1, 2023. SB 7024 rebuilds DROP (96 months, 4% interest, no entry window), raises the HIS, boosts Investment Plan deposits, and restores the 55-or-25 date for Special Risk members.
• January 5, 2025. Congress repeals the WEP and the GPO, two Social Security rules that had reduced benefits for some public-sector households. Because FRS jobs pay into Social Security, an FRS pension never triggered either rule; the repeal matters to your household only if someone also draws a pension from work that did not pay in. Chapter 9 covers it.13
• July 1, 2026. A 1.5% minimum COLA arrives for eligible Special Risk retirees, and for that class only.14

Six dates, one lesson. This system moves, and it never mails you a personal summary of what changed. If your retirement knowledge was formed before 2023, parts of it are out of date, possibly the parts you were counting on. Reading a new statute against your own dates is work somebody in your household has to do. The habit that beats memory is to write down what applies to you and check it once a year. July is a good month for it, since most of these changes take effect on a July 1.

Maria spread the orientation folder on the kitchen table that Saturday, next to her laptop and a fresh legal pad. It took her twenty minutes to find her enrollment date and one login to confirm she was in the Pension Plan, on the earlier side of the line. She wrote down her class, her vesting date, and the year she would reach thirty years. Four lines, all of them true, none of them borrowed from anyone at work.

At the top of the pad she wrote My rulebook, and under it the first accurate sentence she had ever written about her own retirement. She was not behind. She had eight years before her earliest date, which in this system is a great deal of room. She was finally reading the right page. Chapter 2 takes the formula apart, one piece at a time, so you can read yours the same way.