Florida Retirement System for Teachers
As a teacher in the state of Florida, you are responsible for educating our kids. So you are responsible for educating all of our future generation. Many teacher love their jobs, however due to the stress and responsibility of educating our youth, retirement can be a sweet reward.
In reality most Americans will not be able to retire comfortably. Pensions have been slashed, and 401k contributions are at an all time low. Fortunately, in the state of Florida, the Florida Retirement System for teachers will allow them to retire and not worry about the future.
How it Works
The FRS Pension Plan is setup as a defined benefit plan, meaning that you are only promised to receive benefits if you meet particular criteria. There are many variables that will affect your particular situation, so make sure you speak to a financial advisor to get your numbers.
The amount of money you receive depends on a variety of factors, including:
- Your earnings over the course of your career as a teacher
- Years of service
- When where you hired
- A vesting period
The Florida Retirement System is responsible for making sure efficient funds are available to retiring teachers when the time comes.
Things You Need to Know
In order to receive your full retirement benefit under the FRS Pension Plan you are required to meet the service or age requirements.
With the FRS Pension Plan, normal retirement age is set at age 65 with a minimum of eight years of service. Here is a good resource from the FRS directly.
As a teacher you can qualify if you:
- Have 33 years of service, regardless of your age at retirement
- If you are at least age 65
Hired Before July 2011
The above takes into consideration those who enrolled in the pension plan after July 1, 2011. For those who enrolled before July, 2011, here is what you need to know:
- Normal retirement age members is set at age 62 with a minimum of 5 years of service
- Have 30 years of special risk service, regardless of your age at retirement
- If you are at least age 62 years old
After you reach normal retirement age, you are entitled to receive the full value of your pension, based on the factors detailed above.
However, you do have the right to receive your vested benefits before reaching full retirement age. If you make the decision to do so, your payout is subject to an early retirement reduction.
As a high risk employee, such as a police officer, you gain access to a special set of eligibility requirements under the FRS Pension Plan. It’s important to become familiar with the plan as a whole, the amount of money you can receive upon retirement, and when you’re able to start collecting.
FRS Pension For Teachers
You can think of the FRS pension as mail box money. To make it easy for you we included a calculator below so you can estimate how much money you will receive.
You will receive mail box money for the rest of your life, no matter how long you live. The amount of money you will receive will be base on your years of service.
Hired before July 2011
If you where hired before July 2011, you where grandfathered into the old plan. In order to get a pension you need to reach 30 years of service or age 62.
The formula that the FRS uses to calculate is:
(Years Of Service) * (1.6)*(Average Final Compensation)
For teachers with full 30 years of service, you should expect to receive approx. 48% of your income as a pension.
They will take the average highest 5 years of service.
Hired After July 2011
You will need to reach age 65 or 33 years of service to retire. Also the FRS will take the average of the highest 8 years as income for your calculations.
It means you will get credited all the extra hours and long shifts you work. That is why it makes sense to work more extra at the end of your career, as your pension will benefit forever.
Here we have a FRS pension calculator that can help you project your numbers.
FRS Investment Plan For Teachers
In addition to having your FRS Pension as an option, teachers have an FRS Investment Plan option. You can think of the investment plan as a 401k. You will invest your money in mutual funds that you pick and depending on how these investments perform, that’s how much money you will get in the long run.
However, unlike a 401k, there is a required contribution. As you will have to contribute 3% and the state will add funds for you.
The FRS Investment plan has a higher risk and a potential higher reward than the pension plan. But be very careful before switching between these two plans. Make sure you consult a financial advisor before making any decisions.
Switching One Time
You can only elect to switch one time between the pension and the investment plan. So make sure you are making the right choice of your particular situation. This is not a decision you should take lightly, as it is irreversible. As a matter of fact there is a class action lawsuit from people that switched to the investment plan without fully understanding the repercussions.
Compare Pension vs Investment Plan
To compare the pension with the investment plan, you can give us a call and we will give you a free analysis.
To read about the FRS Pension you can visit :