1. RETIREMENT | SECOND HALF 3rd quarter
Game of Life
RETIREMENT | SECOND HALF 3rd quarter

2. How to Navigate the 3rd Quarter
1st Quarter – Education
2nd Quarter – Work
3rd Quarter – Retirement
4th Quarter – Rest
Investments, FRS, Social Security, Medicare
July 1, 2011 – IMPORTANT DATE

3. Looking at it from the sidelines
Game Pieces
Looking at it from the sidelines
Choices you need
to make
Skills to be developed
Choosing Plan
Pension or Investment
Education of Choices
Deciding When to Retire
Retirement Date
Requirements & Eligibility for Retirement
DROP
Retirement Plan Option
Understanding the Plans
Retirement Benefits
Insurance
Employer
Health Insurance Subsidy
Costs Associated
Pension
COLA (July 1, 2011)
3% Prior to 7/1/2011
Computing your %
Pension Growth per Year

4. Florida Retirement System
Required Materials
Florida Retirement System
Planning for Retirement
FRS Pension Plan Summary
Pension Plan Member Handbook
Investment Plan or DROP Guide
Reading Publications
Computer, Laptop or Tablet
Printer
Online Bank Accounts
Technology Tools

5. Choosing a Plan
Pension
Investment

6. Deciding When to Retire
Requirement - You must be VESTED.
Enrolled in FRS on or after July 1, 2011 – you will be vested in Pension Plan after 8 years of creditable service
Enrolled & actively employed on July 1, 2001 or first enrolled between July 1, 2001 and June 30, 2011 you will be vested in Pension Plan after 6 years of creditable service.
Payment is the last day of the month
Why is this important?

7. Qualifying for Normal Retirement
Enrolled in FRS before 7/1/2011
Vested AND age 62 OR the age after 62 when you became vested
30 years of creditable service before age 62
Enrolled in FRS after 7/1/2011
Vested AND age 65
33 years of creditable service before age 65
Early Retirement Pension
Vested AND within 20 years of normal retirement age
Benefit reduced by 5% for each year under normal retirement age

8. Deferred Retirement Option Program (DROP)
Voluntary program for FRS Pension Plan members who qualify for normal retirement
Under DROP
Stop earning service credit toward a future benefit.
Retirement benefit is calculated and set.
Monthly retirement benefits accumulate in FRS Trust Fund, earning tax-deferred interest while you continue to work with FRS employer. (1.3%)
Benefit calculated on total years of FRS service, age when you start DROP and benefit payment option chosen
Up to 60 months
Certain K-12 instructional positions with school districts may participate beyond 60 months up to 36 more months “if approved by employer.”

9. Deferred Retirement Option Program (DROP)
Deferral of Drop Exceptions (Admins)
Enrolled in FRS before 7/1/2011
Reach normal retirement date based on years of service before you reach age 57
You may defer DROP participation AND elect to begin at anytime up to the month you turn 57.
If you fail to make an election before the month your turn 58 YOU ARE NO LONGER ELIGIBLE

10. Retirement Plan Choices
All are required to choose one of the 4 plans
Continuing monthly benefit to retiring member for member lifetime.
Reduced monthly benefit to retiring member for members lifetime with 10 years certain (i.e., if member dies within 120 months (10 years) of retiring the member’s surviving beneficiary would receive the benefit for the remaining months). This includes the 5 years of DROP.
Reduced monthly and continued lifetime benefit in same amount to member’s surviving joint annuitant (exceptions).
Reduced lifetime benefit to member and joint annuitant and upon death of either the amount is reduced to 2/3 of existing benefit.

11. Benefit Calculations Request an estimate at FRS Prior to 7/1/2011
Average of the 5 highest fiscal years of salary earned during covered employment.
Sick leave not included / Vacation up to 500 hours.

12. Cost of Living Adjustment (COLA)
July Benefit
Prior to 7/1/2011 = 3% annually
After 7/1/2011 = 0% annually
Both = computation
Years prior to 7/1/2011 / Total years of service
Hire date (Aug 1989) = 23 years of service prior to 7/1/ years after 7/1/ years total
23/30 = x 3.0% = 2.29 % COLA

13. Insurance After Retirement
Florida Statutes requires FRS employer to offer you or your eligible dependents the option of continued participation in any employer-sponsored group insurance plans, in which you were participating at your retirement or at DROP termination date
Premium cost for health and hospital insurance coverage may not exceed the total employee and employer premium cost applicable to active employees
What does that mean?
You pay full cost, not subsidized cost
You lose eligibility to participate if you choose not to continue
Medicare – apply 3 months prior to 65th birthday. If not, late penalty for life.

14. Health Insurance Subsidy
Must be approved annually by Legislature.
NOT guaranteed.
$5 for every year of service up to 30 years = $150 monthly
Minimum is $30 monthly
Must have proof of insurance to collect.
Must apply for benefit.
Taxes must be paid on monies received.
Example
Health $ Dental $ Vision $ $ per month $ HIS $ total cost per month

15. Re-employment
12 months retired = free & clear to work for an FRS employer
If not an FRS employer, you can go to work for them immediately.
Contracted Services
“Independent Contractor”
Services provided to public, private and other entities
Officiating
Do not jeopardize your retirement!

16. Social Security Know your full age to retire
Reduction in benefits prior to full age
Create your account at
Check your annual statement online.
You will need your Social Security card when you retire.

17. What to do Years 29 & 30 Set up a meeting with Retirement Office
Get a meeting with a viable financial planner
Budget – Have the hard talk!
You will not spend less in retirement!
You will spend differently.
GOOD LUCK!

18. 12 Documents to Organize Now
Will (avoid family arguments)
Living Revocable Trust (probate avoidance)
Living Will (end of life wishes)
Healthcare Power of Attorney (who makes your final medical decisions)
Financial Power of Attorney
Designate Beneficiary Accounts (beneficiaries need to now)
Copy of marriage licenses/ divorce decrees
Copy of latest federal tax returns
Financial accounts – where is your $ and stuff (usernames/passwords)
Letter of Instruction/Intent (tell executor what to do)
Funeral Plan
Business Succession Plan

19. Questions?