Why the Bigger FRS Pension May Not Be Worth the Wait

If you’re an FRS Pension member, you may have run the estimate a dozen times and still feel stuck.

That’s because the estimate answers the easy question:

How much bigger could my pension be if I wait?

It does not answer the harder one:

Is the increase worth another year — or more — of my working life?

Waiting may add hundreds of dollars a month for life. But it also means working longer, entering and leaving DROP later, and giving up earlier retirement years.

So the question is not simply whether your pension will be bigger. It is whether the increase is large enough to outweigh what you’d have already collected by entering sooner.

In this article, I’ll compare two official FRS estimates over time, find the age when waiting finally catches up, and weigh that result against the additional years of work.

By the end, you should be able to answer the question that actually matters:

Is the larger pension worth the time I have to give up to receive it?

New to the program? Start with how FRS DROP works from entry to exit.

The missing number

The Number Your FRS Estimate Does Not Show

Your FRS estimate shows the monthly pension under each entry date. But it doesn’t tell you how long the larger pension from waiting takes to catch up.

Enter DROP earlier
You lock in the smaller pension, but your DROP balance starts building sooner. If you remain in DROP for the same number of years, you also finish sooner and begin receiving your monthly pension earlier.

Wait to enter DROP
You lock in the larger pension, but your DROP accumulation and monthly payments both begin later.

The break-even test adds up the money each path produces and finds the age when waiting finally catches up. That age is your break-even age.

A worked example

A Simple Enter-Now-versus-Wait Example

Imagine an FRS Pension member who is age 60 and comparing two DROP entry dates. Their official estimates show:

• Enter DROP now: $2,560 per month
• Wait two years: $2,846 per month

Waiting adds $286 per month. Collected from age 68 through 85, that difference adds up to more than $58,000. That sounds like the better deal.

But the member also enters DROP two years later, finishes DROP two years later, and begins receiving the monthly pension two years later. The larger pension starts out behind.

Let’s see how the two paths compare.

When waiting catches up

The Bigger Pension Takes Until Age 79 to Catch Up

In this hypothetical, by age 68 both paths have completed six years in DROP. But entering earlier has already produced more money:

Each DROP balance is the monthly pension set aside over the six-year window, growing at 4% a year credited monthly — the rate for DROP begin dates on or after July 1, 2023 (2023 SB 7024). It’s a simplified, before-tax figure; your own numbers come from official FRS estimates.

Even with the larger pension and DROP balance, waiting is still about $38,440 behind.

From age 68 forward, waiting gains $286 per month. At that rate, it takes a little more than 11 years to close the gap — which puts the break-even age near 79.

Cumulative money in hand by age (hypothetical, raw future dollars). Before age 79, entering earlier stays ahead. After age 79, waiting pulls gradually ahead.

By age 85:

• Entering earlier has produced about $792,000
• Waiting has produced about $812,000

So the full trade-off is:

Work two additional years, wait until about age 79 to catch up, and finish roughly $20,000 ahead by age 85.

Whether that is worth it depends on how much you value the larger lifetime total against the two earlier retirement years you’d give up.

The tool

Calculate Your Own Break-Even Age

Age 79 is the answer for this example — not for every FRS member. Your break-even age depends on:

• How much your pension increases (this comes down to your service and your Average Final Compensation — the average of your highest-earning years)
• How long you wait
• How long you remain in DROP
• And how much the earlier path has already produced

Want your actual DROP lump-sum number? The official FRS DROP calculator on MyFRS estimates that for you. The one thing it can’t tell you is whether waiting is worth it — that’s what the tool below is for.

Use it with your own two FRS Online estimates: one for entering DROP now, and one for the later date you’re considering.

When vs. whether

The Math Tells You When — Not Whether It’s Worth It

Your break-even age tells you when waiting’s larger pension catches up. It does not tell you whether waiting that long is worth it.

A break-even age of 72 may feel very different from a break-even age of 84. But even the same result could lead two people to different decisions.

One member may enjoy the job, expect a meaningful raise, and prefer the larger lifetime pension. Another may be ready to retire, have enough household income, or place greater value on the earlier retirement years.

The calculator handles the dollar question. The next step is deciding what those additional years of work are worth to you.

This information is for general educational purposes only. It is not individualized investment, tax, or legal advice and is not a recommendation to enter or delay DROP. Hypothetical examples do not predict an individual result. Investing involves risk, including the possible loss of principal; no strategy assures success or protects against loss. Confirm your benefit amounts and eligibility directly with FRS and consult the appropriate tax or legal professional regarding your situation.