Hi everyone, this is Kyle Davis with Integrity Financial Group. I am a financial advisor and owner of the firm, and this short blog post is specifically for participants in the FRS "Florida Retirement system" retirement plan - specifically that's public school teachers, fire, police personnel, and many other county and state workers as well who are participants in FRS.
As you know, you are putting away a minimum mandatory contribution each year and getting a match on it - which varies GREATLY based on what employment class you fall into. Now, some of you are on the investment side and some of you are on the pension side of FRS. The plan has two sides to it, which you probably knew. Still some of you have probably never logged in before and don't know which side you're on, and that's OK too. I know some highly intelligent people who never look at their statements, and that's a choice as well.
The pension side of FRS is managed by the state and it is based on years of service. It provides a defined paycheck similar to private pensions and annuities. A pension payout is very similar to an annuity when it's taken over a period of time and not as a lump sum. The investment side however is a little bit like a 401(k), 403(b), or Section 457 plan (which many FRS participants also have as an optional supplemental plan). When you're enrolled in the FRS investment plan, you still must pick and choose which investments are inside your portfolio, from the choices available. If you do not choose your investments, the plan will do so for you
"As an Investment Plan member, you have the right to decide how to invest your account assets. If you do not provide instructions on how to allocate your funds, your assets will be 100% invested in, and continue to be invested in, the Plan’s default investment fund option. The Plan’s default investment fund is an age-appropriate Retirement Date Fund" (Source: FRS Investment Plan DESCRIPTION July 2019 Pg.29 https://www.myfrs.com/pdf/forms/frs_ip_spd.pdf)
As of right now there are 22 investment choices inside the FRS investment plan. 11 asset class choices, and 11 target date retirement funds (the plan's default investment funds). What FRS also has available for you is something not too many people know about. You may have heard of it, but I doubt anyone's ever explained it. It's called the "Self-Directed Brokerage Account" (SDBA) within FRS. It allows participants to use thousands of other approved funds and investment choices in the FRS investment plan. Also what it allows you to do is work directly with an advisor and obtain independent personalized investment advice specifically tailored for you and your situation, all within your pre-existing FRS account. That means no rollover, no taxable distribution, no new login, no new statement. Everything is exactly as is except now you can actually get help.
Our firm has made a commitment to giving one on one personalized advice and helping people align their total household financial planning and family situation around their FRS retirement plan. We have made an informational PDF available for you here on the value of getting advice for your FRS investment plan. Click Here to download the PDF. You can also ask a question or schedule a free consultation in person or over the phone right through our contact form, located Here. I hope you'll reach out - let's have a conversation about the FRS plan!
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About the author: Kyle A. Davis is a Chartered Financial Consultant® , Chartered Advisor in Philanthropy® , and president of Integrity Financial Group in Orlando, FL. He is a Florida native and an advocate for financial literacy and practical money education. When not assisting clients in planning for retirement, he creates educational videos on financial wellness on his YouTube Channel - https://www.youtube.com/user/financialplannerinfl
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as investment, tax, or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.