Top 3 Financial Considerations for First Responders in Retirement
Its finally the day, you have spent your working years dedicated to public service and it’s time to move on to the next stage of your life. The question you might be asking yourself now is “what next?” Retirement looks different for every first responder. But no matter what retirement looks like for you, there are 3 things to consider:
1. The power of the pension and your options
As a first responder, one of the greatest tools for retirement you have is your state sponsored pension plan. It can potentially provide a lifetime income stream for not only you but your spouse as well. When calculated for your life expectancy, it is possible that the total value of your income received will be north of $1,00,000! One of the most important decisions you will make around your retirement, is how you will take your pension.
2. Invest properly in your 457
Because of the generally conservative nature of your pension, it is important to make sure you are taking the appropriate amount of risk in your 457. Many first responders do not fully understand the amount of risk that they should be taking with their investments. We want to simplify that for you. Think of driving a car. Most people will drive between 0 and 100 mph. You know who you are. Well think of that for how you take risk in your portfolio. By understanding your risk, you will know how fast to drive your portfolio which will guide how to invest properly in your 457.
*Your 457 will also allow for penalty free withdrawals before age 59 ½ so make sure you consider all options before making changes to your 457*
3. Budget, Budget, Budget
Spending habits will greatly determine how you take your pension and manage your retirement. Think hard about what you spend now and how you think that my change in retirement. Will you have additional working income? Will you be able to pay off your debt before retirement? Do I want to build a second home? These and many other considerations will all play into how your budget for your retirement.
If you have any additional questions about preparing for your retirement, please feel free to reach out.