Can anyone explain DROP to me?
That is, a Deferred Retirement Option Program that is offered as another way for firemen and teachers to put money aside?My question is: Why would someone enroll in this and freeze their pension calculations? How does enrollment in DROP affect regular monthly pension payments? I have a client, 50 years old, invested for 27 years (considered fully by state standards) and was asking me about this. Never heard of it before. Read up on it but never got the "why" question answered. Thanks all.
I always thought of it like double dipping. Here is the FL program and I am sure it is similar all over. It took me 3 secs on google.http://dms.myflorida.com/human_resource_support/retirement/deferred_retirement_option_program_drop