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Helping Heroes Retire

Helping Heroes Retire

Recently, the Florida State Senate approved Senate House Bill 5007, which allows qualified Law Enforcement personnel to participate in DROP for up to an additional 36 months beyond the previous maximum limit of 60 months.  Eligible Law Enforcement personnel currently in DROP and within six months of ending their DROP participation period may apply for a 36-month extension. You can only apply for the extension once you have entered the final 6-month period prior to your scheduled DROP termination date. Please note, Law Enforcement personnel who are assigned to corrections are NOT entitled to this additional benefit.

FRS has provided a temporary employee DROP extension application form on their website which you can find HERE under the Forms section, DROP Participants.  The form is called “Optional Application for Extended DROP Participation for Law Enforcement Officers.”  Once you have completed the form you will want to send the form to BenefitsDiv-Retirement@pbso.org.

Because FRS has not yet updated its DROP pension calculator, we built out an internal calculator to run the calculations for you.  If you are interested to know what the positive financial impact of delaying up to 36 additional months would mean to you and your family, please call our office at 561-632-0566 to schedule an appointment with Gregg Brant or Tad Sacheck.

We look forward to working with you.

Unlike a traditional IRA, Roth IRA contributions don’t provide you with a tax deduction upfront. Contributions to a Roth IRA are made with after-tax dollars rather than pre-tax dollars, meaning that the money has already been taxed when it goes into the account. Instead, you get a tax benefit on the back end in the form of tax-free withdrawals, if you follow some fairly simple rules. Similar to a traditional IRA, the earnings in your Roth account aren’t taxed each year and can be left alone to grow and compound until you need the money. Traditional IRA earnings are considered tax-deferred because you will eventually have to pay taxes when you withdraw them. Roth IRA earnings, however, can be tax-free.


Roth IRAs have annual contribution limits. The maximum that you can contribute to a Roth IRA in 2022 is $6,000 if you’re under age 50 or $7,000 if you’re older. These amounts are separate from the contribution limits into an employer-sponsored retirement plan (401(k), 403(b), 457(b), etc.). Roth IRA accounts have an income phase-out for higher wage earners ($204k in 2022 for Married Filing Joint tax filers, and $129k in 2022 for single tax filers).

Withdrawal Parameters:

Because your contributions to a Roth IRA are made with after-tax dollars, you can withdraw them at any time, tax and penalty-free, and they won’t count as income. However, if you withdraw any of the earnings from your account, they may be taxed differently. For withdrawals of earnings to qualify as tax-free, you must have had a Roth account (any Roth account) for at least five years. This is called the “5-year rule” or 5-year waiting period. If you don’t satisfy that rule, the earnings that you withdraw will be taxed at the same rate as your ordinary income. If you’re under the age of 59½ at the time of the withdrawal, you may also be subject to a 10% tax penalty on early withdrawals. There are some exceptions outlined below.

If you meet the 5-year rule and are age 59.5 when you take a distribution, any withdrawal is treated as a qualified distribution. Per the IRS, a qualified distribution is a distribution or withdrawal that isn’t subject to taxes or penalties. Note that withdrawals of contributions to a Roth IRA are always tax-free because that money has already been taxed.

Mandatory Distributions:

Unlike traditional IRAs, Roth IRAs are not subject to required minimum distributions (RMDs) after you reach age 72. If you’re the original account owner, you don’t have to make any withdrawals for as long as you live. After your death, however, your account’s beneficiary or beneficiaries will eventually have to withdraw all the money, although there is an exception for surviving spouses in some instances.

The bottom line, If you have a Roth IRA, you can withdraw your contributions at any time and they won’t count as income. The account’s earnings can also be tax-free when you withdraw them if you are 59½ or older and you have had a Roth account for at least five years. If not, you’ll generally owe taxes and may have to pay a 10% early withdrawal penalty, too.

Options for Beneficiaries:

Note that, if you die, your IRA beneficiaries will usually not be subject to the 10% penalty, regardless of their age, if the five-year holding period rule has been satisfied. The exception to this is for spouses who are sole beneficiaries of an IRA and elect the option of treating it as their own, in which case they must generally wait until age 59½ to be eligible for totally tax-free withdrawals.


A Roth IRA account is a terrific complement to clients who retire with many pre-tax assets. Clients who receive a pension, or have a 401(k) plan funded with all pre-tax money have tax concerns in retirement. Having the flexibility to take distributions from an account in retirement without increasing your taxable income can prove to be very valuable. The other main benefit of a Roth IRA is the tax-free growth aspect. The earlier you start one the better because of the power of compound interest. There is no avoiding paying federal income taxes, but paying them upfront and reaping the benefits of tax-free growth can provide you with a serious advantage in retirement.

The last month of the year means a lot of things – holidays, parties, bowl games, and more. It’s also an opportunity to do year-end tax planning. By now, you have a good idea of where you will end 2021 in terms of income earned and deductions available. One key late-year decision is to analyze your expenses to see if you might be able to itemize deductions on your tax return. Otherwise, you would take the standard deduction, which has become much more widespread since the tax law changes in 2018 – with about 90% of taxpayers going in this direction. Common itemized deductions include real estate taxes, mortgage interest, state income taxes, charitable donations, and medical expenses.

Figure your deduction situation

For 2021, the standard deduction is worth $12,550 for single tax filers and $25,100 for married couples filing jointly. Those figures increased $150 and $300, respectively, from 2020.

Determine your tax bracket

Another aspect that can help guide year-end planning is figuring out your income bracket. Think of brackets as buckets holding water. As your income rises, you fill up the first bucket, where the lowest tax rate applies, then move on to brackets with successively higher tax rates.  Analyzing your tax bracket can help determine whether you might want to defer or accelerate income or deductions. For example, if accepting a higher-paying job in December might bump you from the 12% bracket into the 22% bracket, it might be worth waiting until January. However, If your income is relatively low, you maybe can increase it to fill up the 10%, 12%, or even 22% brackets. With tax rates possibly rising in future years (including potentially 2022), it could be smart to max out lower brackets before the end of the year.

Consider optional expenses

Many people don’t have much late-year wiggle room when it comes to income. Most likely, you aren’t taking a new job in December, but you might have some opportunity to delay a bonus or other income until January. There’s often more opportunity to bump up deductible expenses. You probably can’t do much to significantly alter your mortgage interest, for example, but there are other options such as charitable donations.

The basic rule is that you can deduct donations made to qualified charities. The amounts you give, plus other deductible expenses, might be enough to allow you to itemize deductions. If you donate a lot of money or want to donate non-cash assets, the tax rules can get complicated. Publication 526 from the Internal Revenue Service provides details on this further.

You also might want to open a donor-advised fund, especially if your income jumped and you need a late-year write-off. These vehicles allow you to donate cash or other assets like appreciated stock, claim the deduction now, then take some time in deciding which charities to recommend supporting. Meanwhile, account balances grow tax-free.

Lastly, you could look at lumping your gifts into one year instead of giving every year.  For example, if you traditionally give $10,000 to ABC charity annually you might consider lumping 5 years of gifts into one year to give ABC charity $50,000 in one year and not donating to ABC charity for the next 4 years.

Medical deductions are a possibility

Medical deductions remain favorable. Tax reform was supposed to boost the medical-deduction floor to 10% from 7.5%, meaning people who itemized could write off only those health expenses that exceeded 10% of their adjusted gross income. But Congress lowered the threshold back to 7.5% temporarily, then made it permanent at that level, making it easier to deduct medical and dental costs.

To get above that threshold, you might be able to time surgeries or other procedures, taking them this year or next. Many health expenses are deductible including unreimbursed doctor fees, hospital costs, prescription medications, some transportation costs, some insurance premiums, and more. IRS Publication 502 goes into detail on this further.

Capital gains might be worth taking

Plenty of investors are sitting on paper (unrealized) profits in taxable accounts from the stock market or gains in other assets. Often it’s wise to delay selling to defer paying taxes on an unrealized gain, but if your taxable income is modest, it can pay to realize gains and pay them this year, especially if you qualify for the 15% long-term capital-gain rate or even the 0% rate.

Long-term rates apply to assets held more than one year; otherwise, gains are taxed as ordinary income at rates that typically are higher. That 0% rate could apply if your taxable income for the year is below $80,800 for married couples or $40,400 for singles.

Conversely, it could be smart to realize losses. As a general rule, if your losses exceed your gains for the year, you can deduct up to $3,000 of the excess against regular income, carrying unused amounts to future years. Such “loss harvesting” is best done late in the year, when you have a more complete picture of your tax situation.


With the technology available in this day and age, many people file their own tax returns. We recommend getting a second opinion from a licensed CPA to see if you are missing any allowable deductions that could greatly impact your personal tax situation.

It is official the Democratic party controls both houses of Congress as well as the White House.  This article aims to address the tax changes that they might propose as well as provide insight as to when they might go into effect.  Assuming that some version of the Biden Plan is passed into law, one needs to consider its effective date. Typically, tax legislation is prospective, and might not be effective until January 1, 2022, or later (depending upon how long the enactment process takes). Sometimes, however, tax legislation is retroactive, in which case it would either be effective as of its date of introduction (which would in all events be sometime after the inauguration) or possibly even effective as of January 1, 2021.

Proposed Income and Payroll Tax Changes

Proposed Transfer and Estate Tax Changes

If you have any concerns about what could happen and would like to sit down with our team to discuss your situation, please reach out as soon as possible as it is possible that we can still make updates to your current plan and get those into effect before any possible future changes.