I was just looking at this post which describes how to wrap entire words in vim. The accepted solution was this:
:set formatoptions=l
:set lbr
The breakindent patch has what you're looking for. I successfully applied it using instructions found in this thread:
Patch Vim with the breakindent patch on OS X with Homebrew
Specifically, echristopherson's Homebrew formula.
I know this thread is old but it's popular on google and I came across it multiple times when trying to find a solution.
EDIT: This patch is now included with vim as patch 7.4.338. See: https://retracile.net/blog/2014/07/18/18.00
On Yosemite (Mac OS X), I used snowbound's command with hombrew:
brew install macvim --with-features=huge --override-system-vim --HEAD