The following is a letter we received from a Tax-paying Florida Citizen, who is not associated with the Florida Retirement System.  We found it to be refreshing, and wanted to share it with our readers.  Thank you for your perspectives Mr. Cassidy!

To Florida Retirement System Options,

I am not in the Florida Retirement System.  I am also not related to anyone in it. I am really just a concerned Florida taxpayer, who does not believe that scapegoating public employees is fair or right. I do not believe that one small group of people should be punished, and essentially “taxed,” just because they chose a job or a career in public service.

Retirement benefits promised to public employees are not “pork,” but are in effect “a contractual agreement” with public employees. I do not believe that it is legal to break contracts or moral to break promises.

The economic downturn is not the fault of public employees; and, as a registered Republican, I am embarrassed that many Republican politicians, not only here in Florida, but across the nation, are attacking the pay, benefits, and pensions of public employees. Scapegoating public employees seems to be more of an assault on working people and the middle-class, and to protect big business and the ultra-wealthy, than it is an effort to balance the budgets of many states.

Additionally, I believe that a defined benefit retirement plan is better than a defined contribution plan, because it guarantees retirees a known amount of money they will be receiving and living on in their retirement, which is essential for older people and senior citizens. Converting the state’s retirement plan from a defined benefit plan to a defined contribution plan, even for new employees, would be costly and would threaten the plan’s investment potential. If Florida’s public employee retirement system is not broken, politicians should not be trying to fix it; and, even if it is broken, cutting benefits or changing the plan is not the solution, especially when it seems politically driven.

Unfortunately, certain media outlets and radio and television personalities have been whipping up the anger and resentment of people not in public employment; and, as a result, there is a huge wave of malice and discontent aimed at public employees by people who have been duped into believing that they are being taken advantage of by public employees. I do not believe this. Due to what is happening in other states, and by what I hear on television and read in online newspapers, it looks more like a politically motivated attack against public employees by certain politicians who are catering to special interest groups and who are more interested in their own political careers and ambitions, than they are in doing what is right, fair, and just. I dislike partisan politics, and I think that it works against America and is going to hinder our nation’s recovery from the economic downturn that it is now in.

Kindest Regards,

Lawrence Cassidy

If you are changing jobs, planning to retire or about to exit Florida’s Drop Program and have a 401(k)  retirement plan at work, you generally have 4 options for that plan.

1. Leave the money in the old 401(k) plan.

2. Move the money to your new companies 401(k) plan

3. Withdraw the money

4. Roll the 401(k) into a IRA in your name

If you have any questions on these options please read further or click here to have a free consultation with a Orlando Insurance Advice Rep.

Benefits of Rolling Your 401(k) into an IRA

When you leave your company, what happens to your 401(k)? Depending on a variety of factors, pay out of your 401(k) account balance shortly after your separation from service may be required. You then have the option to roll the account over to an IRA, new employers qualified retirement plan or to take a lump sum distribution. When thinking about these options, consider moving your account into a rollover IRA. Whether retirement is around the corner or many years away, rolling your 401(k) into an IRA offers you a number of benefits listed below:

Postpone paying taxes and penalties.

Taking a lump sum distribution from your company’s 401(k) plan can be very expensive. Taxes are payable at your income tax rate and a 10 percent federal penalty may apply if you are under the age of 59 1/2. Lump sum distributions do provide cash but can be very expensive. A Rollover IRA gives your retirement plan assets the ability to continue to grow tax-deferred. You will also avoid having 20 percent withheld for income taxes, potentially paying income taxes by not taking a cash distribution.

Widen Your Investment Choices

You have more investments to choose from in your own IRA, not just those available to you through your company’s plan.

Extend distributions over the life of your designated beneficiary

Some 401(k) retirement plans severly limit the number of years for the distribution of benefits to a deceased employers beneficiary. As of January 1, 2010 however, all qualified retirement plans are required to offer spousal and non-spousal beneficiaries the opportunity to make a direct rollover of an inherited plan acount balance to an inherited IRA from which strech distributions can occur.

Combine Retirement Assets

Use a rollover IRA to consolidate all your retirement investments into a single account. It can be confusing at times keeping up with paper work from a number of differernt accounts, this eliminates the problem.

Keep contributing

While you can no longer contribute to your former employers 401(k), you can make contributions to your Rollover IRA assuming you have an earned income and are under the age of 70 1/2. Contributions of up to $5,000 a year may be possible. If you are age 50 or older, you can contribute an extra $1,000 for a total of $6,000. Should your new employer offer a 401(k) plan, you can contribute to that plan while also contributing to your IRA.