Last year, Keith, an Ohio firefighter in his early 50s, approached certified financial planner Adam Koos with questions about retirement. The father of four had about $80,000 in a traditional IRA, a Roth IRA and a deferred compensation plan.

He and his wife were counting on his pension for retirement income. They were also considering opting in to the state's Deferred Retirement Option Plan, also called the DROP, a program for police officers and firefighters that works like a supplemental lump-sum pension program based on years of service.

Several other states and counties across the country have similar programs, some for teachers, firefighters, police officers, or others.

Keith knew his DROP benefit would come to around half a million dollars, so he wanted in. Two advisers had already counseled him against the strategy, but Keith disagreed. "The more people I talked to, the more I thought they've got to be wrong."

The problem: Because he had used some retirement money to pay down his mortgage and credit card bills, to participate in DROP, he would have to "buy back" eight years of service as a police officer earlier in his career.

Koos, president of Libertas Wealth Management Group, a combination fee and commission-based practice in Dublin, Ohio, had a few other clients in the DROP, so he knew how to run the numbers on a case-by-case basis. "Every year, the cost of buying back years of service gets more expensive," Koos explains. "But when you break down the numbers it becomes an insane no-brainer."

Although the buy-back cost just under $80,000, when Keith retires in seven years or so, he'll get a lump sum of about a half million dollars--in addition to his pension, which the buy-back boosts by several hundred dollars per month.

"There's no way any financial adviser could turn $80,000 into $500,000 in seven years," Koos notes.

To buy back those years, Koos advised Keith to cash in some insurance policies he no longer needed and draw funds from his IRA and Roth IRA. Rolling over the traditional IRA avoided taxes and penalties. Keith did take an early withdrawal penalty on the Roth IRA, but it was a small price to pay, Koos says.

Koos didn't earn much from the transaction--just a 1% fee per year on the $10,000 that remained in Keith's portfolio after they used the majority of his assets to buy back those years--but according to Koos, "nothing felt better to me going home that day." Keith has quickly become his top referring client, and once Keith retires and receives his lump sum, Koos hopes Keith will hire him to help manage that money.

Enrolling in the DROP program has given Keith and his wife peace of mind as they near retirement.

"Otherwise, I'd be working at the fire department when I'm 80," he says.

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