Pension Episode (Part 2)

Together, John and I hope to bring clarity to the world of personal finance, specifically relating to firefighters. Firefighting is a difficult job making sound. Financial decisions shouldn't be.

Offered through the defined benefit plan, specifically focusing on deferred retirement, the drop plan, also known as the deferred retirement option plan, and also discussing the survivorship options associated with the defined benefit plan. Without further ado, let's kick it over to local 1309 studios and the recording of the fiscal firehouse.

that's just where I just keep my money.

Like a lot of people do it because it keeps them more interested in watching sports and, if that's your source of entertainment and you like to do that, by all means just, be responsible about it. Please, we don't want to have any further, further issues with that. So you don't wanna give a shout out to the CPFF. they got us, a little advertisement. so we've actually had a lot more increase in listenership if you will, from a lot of different locals in the area.

So, welcome everyone, if this is new to you. we're super excited about it. We've had a lot of good feedback from other locals like, man, this is great. This is totally applicable to what our members want. We do it in some form or fashion, but the way that you guys are doing it, it's really appreciated. So really big shout out to all you guys and if you guys want. More thoughts or how we're gonna proceed with this, by all means, you know, how to get ahold of us as always. But

We don't have anything that sexy today, but it's something that we think you should consider because it could save you a lot of money, over the course of a year or numerous years. And that's banking. So, I would, we would encourage people, we wanna encourage people to look at their banking options and see who they're banking with and see if you have better options available to you. A lot of people will go with one of the big. Mega banks like Chase or Wells Fargo.

And the truth about that is they, they charge you a lot of fees. They have a lot of fees for, different things, not meeting minimum requirements, overdraft fees, just things like

they let you do free transfers, and they give you really good customer service. And that's something that is lacking from the big boys. Those big boys are just so, overburdened with complaints and customer service issues that you are not gonna get the same level of service as if you go into a credit union. I know we at West Metro use Foothills Credit Union. Yeah. we have a deal with them, to give you a really good, kickback if you're a new guy. So if you are mm-hmm.

So if you are a new guy, you get a little cash back bonus and that could save you. That's, I think that's a hundred dollars, either

And the cool thing about the online savings account and online bank accounts is that they generally offer a much, much higher interest rate, on your savings than you can get otherwise. So, I was with Capital One, for my banking because they're an online only bank. actually back east they do have brick and mortars, but in general, for the, for the nation, they do online banking. And I think that my savings rate with them was like about 3.8%

Money is with Fidelity earning about 4%, which is awesome. On my, checking slash savings account. They do free checks, they do, unlimited ATM reimbursements, which is awesome. Any A TMI go to, even if I'm in Vegas at three in the morning at a casino, which I would never be, but if I were and I needed to withdraw cash, they would not, they would reimburse any fees that, that ATM charges me as well. So they don't charge fees and if I have to spend $6 at an ATM, they would reimburse those as well.

So yeah, free checks, free ATM reimbursements worldwide. which is awesome. And yeah, it's just a way, way better option. Some of those monster mega banks, they charge you for using someone else's ATMs, they will charge you for checks. So we would encourage you guys to look at better banking options. And those were just a couple off the top of my head.

So whenever we do anything through the union, we always go to someone that's got local ties and not to chain restaurants and everything else like that. 'cause it's important to us to support our community. And that's really what you're investing in, is you're investing in the community when you bank with the credit union. 'cause that's where the majority of the members come from. And when they're giving out loans, it's the local businesses and everything else.

And it just keeps that, that, ecosystem if you will, local. And that's what we're. all about from, obviously being a, a local member. So, all good. And yeah, I can't, can't highlight enough though. There's a ton of different online banks and savings accounts and all those other things. So if you got some cash dashed away, you can definitely get a little bit more, return on that, on that investment by just keeping it there. So we'll leave it some, short and simple on that one.

that does, as soon as you're starting to talk about checks, I'm like, man, Louie, we're getting old, dude. I know. No one else is. Like, when was the last time you wrote a check? but to that point, we are going to, we've gotten actually some feedback. credit cards are obviously a topic of conversation a lot around the firehouse. people are into different rewards points and travel and all these other things. So we're gonna Designate a, an episode to the credit cards, right?

And just how to use 'em responsibly. But if you do use 'em responsibly, there are some additional benefits that you can get if, if you use 'em appropriately. So I know that was something that a lot of people are always scheming on, in ways to just take advantage of, being responsible, having a good credit history, all that stuff. So there'll be more to come as far as the, credit card game.

this is part two of the, pension episode. Part one, just rehashing what we covered in part one. Part one was really all about, just generally speaking, how does the pension work, How do you get your, benefits? How are they, calculated? How are they accrued? How is it funded? all the building blocks, if you will, of the pension.

Yeah. So now, episode number two is gonna be into some of the nuance stuff, and that's more talking about like the deferred option, the drop plan, survivorship options, all the other nuanced stuff that goes with that. full disclaimer.

With all this stuff, with FPPA specifically, always reach out to them directly for the most accurate information, We're just giving you general overview stuff, just how we know that the plan is facilitated and what kind of, what the plan brochures state, but really when you're talking about your individual situation, reach out to them. 'cause they can run the most accurate calculations,

Yeah. You want 'em to just make sure that you have all the information and that you're making the best, educated decision that you have based on the information that you currently

So this is good to consider as you're not only building your pension, but hopefully building your 4 57, your IRA, and your other savings, to give you some really cool options with your pension as you get closer towards retirement.

And by doing that they give you a higher pensionable amount. So if you qualify for a normal retirement or a vested retirement, you can delay when you collect benefits. And by doing so, you would increase on an actuarial basis, you would increase your pensionable amount, so that it's higher. And this is, this is not, a hard and fast rule, but in general, if you just wanted to do some napkin math, for every year you delay, you would get about 8.5 to 9% increase to your pensionable benefit amount.

so that's cool. just giving a quick example of what that would look like. Let's say you have been a fiscal firehouse listener from day one and you have a bunch of 4 57 and Roth IRA money that you can live on. And that is like a strong. pillar of your financial plan, and you get to the point where you're gonna retire and you say, you know what, I can, retire now I'm at the rule of 80 and I can get about 57.5% of my three highest year salary.

but because I have so much cash, so much investments, I wanna live on those for a few years and I want to delay when I take my pension by three years. if you do that, you would get about, 35% more in your pensionable amount than you would if you took it the day you retired. Correct. Which is a pretty cool option,

Do they do the drop plan, which we'll talk about here in a minute. Do they do deferred retirement? I would really love to, I'm curious myself just to see what that looks like. I'm guessing like. Anecdotally speaking, I think the majority of people probably take normal retirement, so as soon as they retire, they start taking that monthly income stream. But it would be really interesting to see, just numbers wise, what that looks like.

So maybe Lou and I will reach out to FPPA and see if we can get some facts. More than anything else. Just curious about

So, just because, we've been, my wife and I have been pretty aggressive savers and have got some monies coming in, or we will have monies available to tap as far as the 4 57 and some taxable accounts and other stuff. it's a way that we can honestly help keep us in the lower, income bracket when I retire, when I defer and not take this monthly income, which will actually help with healthcare subsidies.

And there's a lot of other reasons that you want to keep yourself in a lower tax bracket as soon as you retire. because we're also gonna do some Roth

So if you understand social security, which we talked about in a previous episode, the deferred retirement is very similar. So, social Security says that for most people, full retirement age is 67, so that would be normal retirement age, right? the deferred option is very similar, like delaying social security and we know that if you delay social security every year, you basically get another 8% per year every year to defer. And this is all math, As Louis said, this is all actuarial based.

That's all it is. It's just moving around numbers, life expectancy, ages. So it's just a kind of a complex math problem. So we'll put the chart up on the Instagram post maybe just so, as a reference point as you guys are deciding. And, nothing really locks you in. The only thing is, I believe, if I'm not wrong, is buy 65. You have to start taking it right, Louis? So if you retired at 55. So you could delay.

I mean, if you had a huge bank, then you could delay up for 10 years and you're talking some serious cabbage. So what is it? I'm just looking at the chart right now. 240%?

and it's always good, obviously, the closer to retirement you are, the more accurate these projections are gonna be. so take that with a grain of salt. Right now when we were looking at our salaries and you still got 15 years to work, this is probably gonna look a little bit differently, but that is what the, deferred retirement is all about. Anything else you want to chat on that?

Part of the drop plan is, is basically as soon as you enroll in the plan, you sign a piece of paper with your employer, basically saying that you are, are separating from service more or less because now on paper you're more or less retired, right? So they are no longer going to make those contributions or they might not make those contributions on your behalf.

by signing that you basically have to cease employment within five years, That's another reason why employers love it, like from a planning perspective, they're like, okay, cool. I know this person is in the drop plan. I know within the next five years I'm gonna have to account for replacing that person rather than other situations. It just makes planning a little bit easier. All right, so what happens is, so.

Once again on paper you're retired so you're no longer continuing to accrue service credit. So if I retire and I put myself in the drop plan, let's just once again say 55, right? So I've got 30 years of service and I'm 55 years old. I'm now gonna enter the drop plan. So I am no longer accruing any more service credit. So my, my pension plan, my payments are gonna be based on that 30 years of service and 55, which is 70%. Alright?

it's account that is set up through FPPA through Fidelity, It's a self-directed account. So my money that my monthly pension check, rather than me receiving it, I don't, I'm not gonna get it. It's gonna go directly into that account, What else is, what else? What else is going to go into the account? Is what my. Payments are to the pension. So right now I'm at 14%. That is can continue to go into the plan as

And honestly, from a negotiation standpoint, this is a lot of commonly negotiated items from the, those of you that have collective bargaining. this is something that a lot of unions are starting to look at as negotiating for their members as an enhanced benefit to the drop account. So just to make things very clear, for right now, for West Metro folks, this does not, this is currently not implemented, You are not. West Metro is not putting in money.

Employer contributions into your drop account. This is potentially something down the road that could happen. But I know for a lot of the north area fire agencies, a lot of them have this in their contract and they are getting contributions from the employer into the drop account. So just something to be mindful of and a potential negotiating item. Those of you that are listening from, from the union aspect of it, something to consider for your membership.

So FPPA will take your pension and basically those pension checks, even though you're still working at your department, they will start contributing that pension check to your drop account. And then you will also continue to get the, contribution, the member contributions into that drop account. And like John just said, some departments are even putting the employer contributions into that drop account, and then that drop account grows.

That drop account is similar to a 4 57 or an IRA in the sense that you get to choose how it's invested. So you get to choose from an option, from a few different options for investments and grow that account for the 1, 2, 3, 4, or five years that you're in the drop. So, basically what you're doing in, in the simplest terms is you are creating a, a pool of money.

You're creating a. Cash pull of money, you think your pension benefit is gonna be high enough that you're willing to freeze it at the point you enter the drop and instead of increasing your pension benefit, you are increasing a cash amount. So you do that hopefully by the end of the four or five years or however long you're in the drop, you retire. And then in addition to having your pension checks coming to you, you will now also have a big pool of money that you can use.

You have the flexibility to use that to do whatever, pay off your house or, buy a car, buy a boat, or travel, or do whatever you want. You have this cash pull of money in addition to your pensionable amount. So it's a cool way to, to create some cash savings in the last few years leading up to retirement if you don't already have those.

and I honestly, we have a lot of members that are in the drop currently, so I,

If you have a really fat 4 57 and a really fat IRA because you've been maxing those babies out, you might have enough cash that you don't need to drop. You don't need to build that cash account. and instead you might wanna say, well then I could live off of some of this, these 4 57 and IRA, this IRA money and grow that pension. So in that case, you would defer.

If you don't, if you, are late to saving in your 4 57 and IRA and you don't have a lot of cash on hand or a lot of investments, then maybe you should drop so that you can build up that cash account, build up those cash equivalents, for when you retire, to have that pool of money to draw from. So that's one thing to consider. I would say, also you need to know how big your pensionable amount is. If you, if you're at 57.5% or 60% pension, is that enough?

Are you comfortable with that being your pension set when you enter the drop? Or would you rather defer and see that amount grow by, like we said. Eight and a half, 9% a year. that's another thing to consider when you're determining between those two. And then I would also say, and, and this is a harder one to qualify, but I would say it's also important to look at market conditions.

And what I mean by that is let's say you're retiring this year, or you are retiring, last year, since we know what that market looked like, the market was at all time highs. So that would've been a good time to say, Hey, I have a bunch of 4 57 and IRA money. I'm going to sell some of it and live off of it for three years. and in that sense, I'm selling high, which right. We always talk about buying low and selling high in the investment community.

Well, in that case, you would be selling high and then you would be able to live off of some of that. Whatever, 4 57 IRA money and defer your pension in order so that it can grow by that eight and a half or 9%. on the flip side of that coin, if your, if the market is low, if you happen to retire at a time when the market just, is in a recession, it just dumped, it took a 20% nosedive. Well, you don't, you might not wanna sell, you might not wanna sell low.

So in that case, maybe you should take your pension and, keep that drop account or keep that, those other investments invested so that you can wait till they recover and they can come back from the lows. That's another thing to consider. and the truth is though, you don't know what that's gonna be like until you're about to retire.

And this is actually happening to someone that we all know very well here, but, they are, they are in the drop plan and now they're recently gonna get promoted to a chief, right? Which is a pretty big step up in pay from what the captain level is here at West Metro. That money is not, they're not gonna get that pensionable amount of money becoming a chief now 'cause it's your three highest years. Right?

So now you'll continue to get that money as far as what the regular salary is, but all the additional benefit of that, of having, the pension plan, like you're capped out at what that, what that captain's wages were. So if you're on one of those, fences where you're like looking to promote within the last couple of years and you want to time it to where you basically, you just wanna, be a captain or a chief for the last three years, you want your three highest years.

That is definitely something to be mindful of because that will change the math as far as what you're defined benefit is gonna look like. Because once you enter the trop, I, hopefully Lou and I have explained it well enough, you're locking in what your pensionable amount is gonna be. That is not, that is not gonna change, that is set in stone as far as what your percentage is. So, and it's gonna be off of that. 'cause now you are retired and it's not on what is.

Even though you're working, they don't calculate those salary years anymore as part of the pension. So a lot of, a lot of nuances with a lot of these things. So we never say always, and we never say never. and our favorite word is it depends, but I think Louis gave a really good framework on potentially thinking whether or not, the deferred retirement is your better option or the drop plan is your better option. honestly, some of it comes down to age.

if you're a younger person and got hired younger and you can get to that rule of 80 pretty quickly, the drop plan might not be a bad idea 'cause you're still gonna get outta here at a relatively young age. Versus if you're not and you're going to deferred retirement and you get, and you're, you're a little bit older, like that just changes. And a lot of this too is we're talking about it from. Just our perspective from the firefighter, you have to account for what your family status looks like.

And if you're married, what that looks like if your spouse is employed, what their career trajectory looks like, what kind of resources they have. that's why it's a, a more complex situation. And I wouldn't even say problem, just, any type of, financial thought should have a holistic approach and not just try to look at one thing and oh, on paper this makes the most sense. 'cause there's a lot of dominoes that come into effect

But it's basically 'cause you're with foregoing your your pension payments 'cause it's been going into this account. So, just like with anything else. So just be mindful of that and how you're investing that money into that, into that self-directed fund. I would just say holistically probably not being super aggressive because you're only five years out, man.

And if you were planning on using that money anytime soon, I would say being a hundred percent in equities, like that's pretty risky at that standpoint. Like you could potentially have a lot of money, but you could potentially. Not have a lot of money. So always, always be, cognizant and, what that looks like from a, from, An asset allocation standpoint. So that is deferred retirement and that is, the drop plan.

So two of the most common things that we get asked about, 'cause they're similar, but obviously they're different, and who does it make, the most sense for when you should start to, start to consider that. So now we've looked at it through the framework of okay, so we're just talking about us, the member, and the benefits that potentially we could get.

Now we have to think about our family situation and what does that look like, So what's really cool about our pension plan is, is there are survivorship and once again, statistically speaking, it's more likely, the fire service is male dominated, and males don't have. Statistically speaking as much longevity as females do. So as you're thinking about this, like the survivorship benefit is all about once you pass away, what is your survivor?

Who you designate as your beneficiary to be your survivor? what benefit potentially are they gonna get? So there's several different options with the that. so first and foremost, if you are not married or you do not have a spouse, or you do not have someone that you wanted to designate as a beneficiary, you can just take the regular full amount, if you will,

So once again, we will, we'll make math very simple. We'll say that we have a 55-year-old person who has got, 30 years of service. they are going to get 70% of their benefit. and we'll make it very easy. We'll say the three highest years we're 70,000. That is what the single life benefit is. It's gonna be $70,000 and you just divide that by 12. Your monthly benefit, that's the check you're gonna get. That's if you have no survivorship options. That's how that benefit chart reads.

When you look into the survivorship features, then there is different multipliers based on what option you choose. And that will, that will reduce what your pension amount is gonna be. And obviously the higher you go percentage wise, the more that multiplier is gonna take effect. So the different, we'll just say right now, the different survivorship options is 100%.

So your designated beneficiary would continue to get whatever pension amount you have for the rest of not only your life, but also their life. There's a new benefit that just got instituted this January, that's the 75% survivorship option, and then there is the 50%, survivorship option. You wanna speak a little bit more on both of those breakdowns of that

And the, the, the thing that you're given up is, a certain portion of your pensionable amount. So we talked about determining your pensionable amount. If you didn't have a sur, if you didn't have any survivorship options, you would get a hundred percent of that pensionable amount if you chose. Once again, just making it simple. Let's say you retired at 55. Let's say your your spouse is also 55, 'cause it matters on their age as well. but let's say you're 55. And your spouse is 55.

You guys were the, the same age. Were high school sweethearts,

So at a 50% rate it'd be about 5% or four point a half percent. So those are just some, just some quick ways. And it, like I said, it depends on the, age that you are when you retire. It depends on your spouse's age, and then it depends on the amount that you want your spouse to receive. So those are just some options to be able to take care of your spouse upon your death.

And it doesn't work that way when you, when you make this election, it's, it's irrevocable and it's a, it's a one-time election. So just be very thoughtful when you're going through this. And I would strongly, strongly advise, when you're making these decisions, to have as much information as you can in totality, holistically thinking about all the assets that you have, all your potential liabilities, all the things that make up your financial life.

Like you wanna have all those things, considered before making any one of these. 'cause depending on where you're at in life, it can really change. and especially there's, I've noticed. I wouldn't say recently, but there's, some more of a, separation in spouse's age, here at the fire department. And I think a lot of that is, some of it is because of divorce, quite frankly, and the second marriages or third marriages, and there's a wide variety of different age banding that goes around there.

So be very thoughtful and considerate when making the survivorship, decision because it's a big one, Obviously you care about your family and, and who's going to get the, your benefit, your heart earned benefit. but just this should not be made in haste. I would just, I can't encourage that nev.

I think that's the easiest way to say it. And John, I don't know how you look at it, but I, for me, I look at these options as insurance

We can't at any point begin to say one is more favorable than the other. 'cause this is truly very specific based on your circumstances.

If I retire, if I retire at 55 and die at 58, I've, I've worked hard for that pension and I wanna make sure that she gets. Some portion of it. I don't know if it's 50% or a hundred percent, but I think I'm willing to take the haircut, during my lifetime in order to make sure that she has a pension, my pension for the rest of her life. So that 75% option that they just came

Hopefully we both live 25 years after retirement and we can both keep taking that pension. But I just like being able to pay for that insurance option and kind of make sure that she's taken care of in the event that something happens to me. Yeah.

so that's basically what the survivor benefits are all about. So, read through the brochure, but really before making any decisions, really have a good plan moving forward on why you're selecting what you're selecting and what the, what the ramifications for those are. last but not least, in wrapping up just some of the, the nuances within our pension plan, and I hope. What people realize is that this is a pretty robust plan.

there's been a lot of enhancements that have happened over several years for our pension plan, and not only making it, it's, I mean, it's shored up from a funding status, but all these other things, like it's pretty nice that you've got all these options. Sometimes it's. Maybe too many options.

This is something Louis and I always give this presentation, to the recruits as they're getting ready to hit the line on just, fi financial independence and just raising some awareness with some financial literacy. And we have a lot of people that did a job before they came here, and they have either money in a 401k or they had public service credit because they worked, as a police officer, as a firefighter in the military, something like that. And they're always like, well, I've got this.

what should I do? Should I buy service credit? And this is one that we, we get asked a

or if you were a former military, service member, you can purchase up to five years of service credit for that. If you did not. Contribute to, us

Man, that's a, that's a hard thing to a, to, to answer because we want to know, well, how, how long do you plan on being here and when do you wanna retire? And do you need those service credits, in order to be able to hit your rule of 80 and to receive a full benefit? It all depends on things like that.

And then the other thing it depends on is, well, how well do you think you would do if you, instead of purchasing service credit, invested that into a 4 57 or, or Roth IRA and I'll, I'll just say this, and this is very general advice because I know that's what people are looking for, is like, Hey, just gimme an idea of what to think about it. I, I've told people, look, I, I'm not a big fan of putting your eggs in one basket. Yeah. And if you're saying, Hey, I can, I can either.

Purchase service credit or I can contribute to a 4 57. My gut would just tell me, contribute to the 4 57 because, if you invest that well, you can earn somewhere between eight and 10% on average, throughout the long term of your career. And I like spreading out that risk and not just putting it all with a pension. So I default to telling people, let's not talk about purchasing service credit unless you are maxing out your 4 57 and your Roth IRA and you're still looking for ways to save.

If that's the case, then yes, purchasing service credit is a great option. and, and the truth is it might be a good option for you even if you're not maxing out your 4 57 and Roth IRA. I just feel like those are really, really good plans that we have. The 4 57 and the IRA and you should consider. starting to fill those buckets up Yeah. Before we start purchasing service credit.

I don't know if you agree with that, John, but that's what I've been telling people because I feel like you're, you're probably not gonna regret putting money into a 4 57. I don't think you're gonna be like, oh man, I wish I didn't have this 4 57 money. I wish I would've instead bought service credit. Yeah.

So after, if you're purchasing public service credit, you only have to wait one year. After one year. If you've got the money, that's the time to do it. Don't wait because it's just gonna cost you more because your salary has gone up and you're gonna be paying at a higher rate. Private is man private. For me, most times is almost like a non non-starter because now you've had to wait five years.

Everyone in the region, you are now at a first grade firefighter, which is where you peak out at minus longevity and some other stuff. So it's gonna cost you a lot more to buy into that plan. and I totally agree with Louis as far as risk pooling and diversifying. I have been trained to think about, not the worst case scenario, but all the potential what ifs. And I always go to someone and be like, okay, what if you had whatever, we'll just call it $150,000 in this 401k.

'cause you go, you worked at some bank for a while and then after five years like that money has now grown to 200 grand and you're able to buy five years. That's awesome. Right? So you've been on the job for five years and you're gonna buy five years of service credit. So basically you're in it for 10 years. what happens if something happens? You either get a disability or something happens where you can't work here and now all that money is locked up into a defined benefit plan. Like honestly.

10 years here is not great. Like the defined benefit with the miracle of what it is and why it is really effective and who it's really designed for is those people that can get to that rule of 80, they can get in 25, 30 even more years. That's really where you start to get a lot more benefit or bang for your buck. so that's just one where I'm just always very hesitant.

Now if they wanna buy a year or two and it just makes them more at ease or they've got a plan of they want to retire at a certain age and they seem like they're gonna carry that out. there is options. And for some people it is good options. the thing I don't like about it is you're taking a lot of risk at the beginning. You're assuming that you're gonna be here for a long time. You're assuming that you're gonna love this job, you're assuming a lot of things.

And when you're 25 or 30 man, there's a whole lot of life ahead of you and you just don't know what that's gonna mean. And I just don't wanna see our folks get of their financial assets locked up in one plan, in one pension. And that's just how I tended to Think of things. So I don't want to poo poo this and I hope that's not what you guys are receiving. Like Louis and I are completely against this.

I just think it's not as easy as oh, I've got some money in my 401k, I'm just gonna buy some years. think about what that money is and how potentially you could invest that money, in order to achieve that. 'cause that's what most people are doing, is they're just rolling over one of their retirement accounts or, other pensionable items in order to buy those years. Yeah. Does that make, does that kind of make sense?

So yes, we're not poo-pooing it for a lot of people it does make sense, but that is why it's, it, it depends on what your service is. When you got hired with a fire service, how long you're planning on being here, do you really love it? are you gonna hopefully get lucky and have a full healthy career here? All those things go into, consideration when you're gonna purchase service credit. Whereas if it's sitting in a 4 57 or an IRA or a 401k with a different employer.

Man, you have that regardless of what happens at the fire service, regardless of how fruitful your career is or is not here, you're gonna have that money invested working for you, and you're gonna be able to give yourself a pension, if you will, from that money. And I think that that is, that's really valuable.

And even though John and I have called the pension, the, the cornerstone of, financial independent for firefighters, which is true, we, we look at it as, as only one of the cornerstones, or at least I'm trying to build my financial, picture so that it's only one of those legs of the stool. But I also have a 4 57 and an IRA and, 401k from, my spouse.

And so we're, we're looking at all of those, and we want to, to spread out our risk so that if one of those, one of those legs of the stool fails, we still have money in other, in, in other legs. So, if the pension were to go bankrupt, which we don't think it will, don't, we're not trying to be an alarmist here. But if it did well, we would still have money in our 4 57 and

And I don't know, I used to always say yeah, for the most people, but we're starting to see a trend where people are just being more mobile or they just want different opportunities. And we just want you to have as many opportunities as you can and have as many options from a financial, asset standpoint and where you're gonna pour that money from. So that's what we're gonna talk about for, service credit. we also recognize, that, we're talked.

Exclusively about the defined benefit plan, That's what this whole thing was all about. We also know that there's other pension plans that our members have access to or are currently enrolled. There's the hybrid plan, which is a split between a defined benefit and the 4 0 1 a plan. And then we have people that are just straight money purchase plans, That's just a straight 4 0 1 a plan.

we do recognize that and we, we don't wanna leave out that, that listenership, on potential things that we wanna discuss. So, Louis and I have heard you guys and we understand, at least for West Metro, that's still about 60 of our members that are in the money purchase component of it, and they want Us to talk about the plan, not only how it's funded, but just things to think about when it comes from like an investment standpoint.

So we hear you loud and clear, and I know as our podcast is growing and we're getting a broader audience out there, there are places like South Metro, those guys, for the most part, all their new hires are still in a 4 0 1 a plan. They're not in the defined benefit plan, and they're one of the largest fire departments in the state of Colorado. So we definitely hear you guys on that one.

So we will, we'll give another episode that we'll dedicate to, probably a mixture between not only people that are in the hybrid component, but also in the money purchase component.

we believe in the, the purpose behind it, the intent behind it, the safety net where it takes a lot of the thought process out of investing out of our members hands, which can, quite frankly, when we were talking about, DraftKings and, all these other things, it really does and I know when West Metro elected to go back into the pension plan, the people that were really pushing that from that were a lot of the union.

E-board because they recognized just some of the risks that, our members were taking by, investing, their monies themselves and quite frankly, being wiped out after 2008 and 2009, and they just didn't want that, for the next generation. So there's a lot to unpack there.

We are very blessed to have a pension as our cornerstone for financial independence. And someday, I mean, what you're working for, what you're working hard for now, just remember this during those late night calls and those lift assist when you're getting up at two, three in the morning a couple times, is that, someday you are going to retire and your pension is gonna be there for you.

It's gonna give you a monthly benefit and you're gonna be able to cash that check and travel with your spouse and, have a good time and not have to worry about the ups and downs of the market because you're gonna have this solid check that comes in. Every month without fail. That's a really, really cool thing that not a lot of people have. So, we're blessed to have it. We're, fortunate that we're working for it, and, we have a great plan.

FPPA is solid and if anything changes in that, and if we think that as the years go by, something's wrong with that. John. And I will tell you, we're, we're gonna shoot straight with you. we're big believers in the pension though, and we're really excited that we're gonna have that someday when we retire.

But this is really one of the things that, we're looking out for you and I know FPPA is looking out for you, and it's just one of those things that should just make, the decision of whether or not to retire and how you're gonna retire a little bit easier. 'cause it takes a lot of the, the nuances of market conditions out of it, and you just know what your benefit is gonna be.

And then you go on with the next chapter of your life, which hopefully is a great chapter and it's a long chapter and you get to have a lot of different experiences with the people that you wanna experience with. So, without further ado, another great episode. Louis, I feel like you carried me on this one. So, nonetheless, it's, been a pleasure. and I really am. humbled by a lot of the comments that we've gotten that, you know, I don't feel like we're wasting our breath with this.

it makes a lot of sense for people. And whether you're listening to us in your car or on a walk, or you're the new guy cleaning the station, toilets, whatever that is, we, we take this seriously. We wanna do a good job. So if you guys wanna see something different right from the way that we do this or what we talk about, you know, how to get a hold of us by now, ask the fiscal firehouse@gmail.com is the best, email link. And then what's the, what's the gram handle?

Nonetheless, nonetheless, until, the next episode, everyone stay safe out there. Thanks for listening. have a wonderful weekend.