FLORIDA PBA LEGISLATIVE ALERT! – MAJOR RETIREMENT BENEFITS ENHANCEMENTS – Florida PBA (2024)

FAQs

What is the formula for the Florida retirement system pension plan? ›

The FRS Pension Plan

Plan differences will vary slightly based on hire date, but the basics computation of the plan is as follows: *Years of Service x 1.6% of Average annual compensation for highest 5 years of salary during tenure = Annual benefit amount.

You can take a full or partial lump sum distribution of your account balance. You have a lump sum cash payment that you can use to pay health expenses or other necessary expenses (review the Tax Implications).

FRS Investment Plan

Step 1: Years of Creditable Service Multiplied by Percentage Value (Percentage amount you receive for each year of creditable service based on your membership class. For example, Regular Class members receive 1.60% and Special Risk members receive 3% for each year of service.)

While all benefit options are paid to you, the retiree, for the remainder of your lifetime, only Options 2, 3, and 4 allow you to provide a continuing monthly benefit to your beneficiary or joint annuitant in the event of your death.

People who have a good estimate of how much they will require a year in retirement can divide this number by 4% to determine the nest egg required to enable their lifestyle. For instance, if a retiree estimates they need $100,000 a year, according to the 4% rule, the nest egg required is $100,000 / 4% = $2.5 million.

We: Base Social Security benefits on your lifetime earnings. Adjust or “index” your actual earnings to account for changes in average wages since the year the earnings were received. Calculate your average indexed monthly earnings during the 35 years in which you earned the most.

Q: Can I retire in Florida on $3,000 a month? A: According to a GOBakingRates study, there are several cities in Florida where you can live on $3,000 — or even less — each month, including Pensacola and Panama City.

If you leave FRS employment before you're vested in your Investment Plan benefit, you won't be entitled to any benefit (except for a distribution of employee contributions - see below). Your account balance will be placed in a suspense account, where it will accrue actual investment earnings.

To make your request online, log in to MyFRS.com. Select Investment Plan, FRS Investment Plan > Withdrawals and Rollovers Out, and then select a payment type. To make your request by phone, call 1-866-446-9377, Option 4 (TRS 711).

As a general guide, you can use the 6% Rule when evaluating the two options. It's a straightforward tool to help assess which choice makes more financial sense over time. Here's how the 6% Rule works: If your monthly pension offer is 6% or more of the lump sum, it might make sense to go with the guaranteed pension.

What is the 15 retirement rule? ›

For a successful retirement, you should aim to save at least 15% of your income annually over the course of your career. Saving steadily and increasing your contributions periodically should help you hit that target over time.

Option 2 provides a reduced monthly benefit payment to you for your lifetime. If you die after 10 years of retirement, no benefits are payable to your beneficiary.

Yes, Florida is one of the most tax-friendly states for retirees. Florida has no state income tax, no taxes on Social Security, no inheritance tax, no estate tax, and no taxes on retirement income like pensions, IRAs, or 401ks. It's evident that Florida does its best to entice older adults to retire there.

Employees contribute 3.0% out of each of their paychecks to the pension fund. The average retirement benefit is $18,625 per year, or $1,552 per month. The FRS pension replaces 48% of pre-retirement income for an employee with 30 years of service.

How does the FRS normally provide benefits? You receive a set, monthly benefit based on your age at retirement, salary, position, and how long you worked for the FRS. You receive the balance of your investment account; based on how well the plan performed.

You will be eligible for a Pension Plan benefit (i.e. be vested) when you complete six years of service (if you were enrolled in the FRS prior to July 1, 2011) or eight years of service (if you were enrolled in the FRS on or after July 1, 2011).