Retirement Guide for Police and Firefighters

The process of retiring as a police officer or firefighter is significantly different compared to other professions, making retirement planning a little more complicated. By understanding how these retirement and pension systems work, you can better transition from being an active to retired public safety professional.

Firefighters and police officers have different benefits compared to the average worker. For instance, public safety retirees don’t often receive Social Security benefits. Instead, a state-provided retirement plan will give them a higher salary replacement compared to those of private companies. However, how much you get and the requirements will vary based on your area’s system, so it’s best to consult your respective department for more information.

Review some common benefits states and cities typically offer public safety professionals below.

After years of service, you can be rewarded with different benefits at retirement — which vary between cities, counties and states. For instance, you may receive health insurance or flexible payout options. Make sure to ask your department for a detailed explanation of your benefits to make the most of them.

Pensions are different in every city, county and state and depend on the local area’s retirement system. It can also change based on your profession, whether you are a police officer or firefighter. Contact your department to calculate your pension benefits and ask for the details.

MoneyGeek has compiled a couple of examples of how Fairfax County and Orlando pensions are calculated for police officers and firefighters below. However, remember that calculations are typically for those who have been in service for more than 20 years. These calculations can still change if you have served for less.

Public safety professionals typically have the option to retire after being in service for a particular number of years, which can be as little as five or 25 years, depending on the agency. Note that the longer you are in service, the more pensions you can get.

When it is right for you will depend on your circumstances. Consider your current financial standing versus your financial goals. If you have not reached your goals yet, you can consider retiring from the force and switching careers.

Public safety professionals are prone to financial issues and legal issues the same as anyone else, which can ultimately impact mental and physical health. It’s essential to control your finances, plan ahead and curb unexpected costs to reach your goals.

The tips below can help illustrate ways to improve your finances before retirement.

Learning the basics of budgeting can significantly improve your overall finances. Through budgeting, you can learn to manage your money and find opportunities for savings, which can ultimately help you enjoy greater financial freedom. Budgeting can also help you account for and manage unexpected expenses, which can quickly rack up if left unchecked.

Debt can strain your finances — especially credit card debt. The sooner you eliminate or reduce your debt, the sooner you can start to use that extra money towards savings or investments. If you are having trouble addressing debt, consider negotiating a repayment plan with your lender to make paying it off easier.

While building an emergency fund doesn’t necessarily size up your finances, it improves its stability. An emergency fund can help you pay for costly and unexpected expenses, such as your car breaking down or your loved one needing emergency medical care. Without it, you risk taking out loans to cover emergencies, which can delay improving your finances.

It’s easy to rack up unnecessary expenses over time, such as eating out or subscriptions. For instance, eating out with coworkers instead of taking lunch can increase your weekly expenses. It’s important to eliminate costs that you could live without to improve your finances. This way, you can make the most of your money and grow it instead. For instance, you can prep your meals or have a weekly menu instead of eating out or cancel the subscriptions you barely use.

Finding free time as a police officer or firefighter can be difficult. If you have a hobby that you like to do during your days off, you may be able to find ways to monetize that and make some extra cash. For instance, if you like wood carving or baking, you could sell your products in small quantities.

There are many resources for uniformed personnel to learn more about how to manage their finances in time for retirement. Explore financial tools and information on retirement, support services and more below.

• MyMoney.gov: This helpful government resource provides tools for financial management, such as building a retirement fund or saving up for a home.
• Federal Employee Education & Assistance Fund: The FEEA is a nonprofit organization aiming to improve financial literacy and provide emergency financial assistance to federal public servants and their families.
• Office of Personnel Management: This resource from the OPM gives you more information about the Federal Employees Retirement System (FERS).
• Department of Health and Human Services (HHS): The HHS provides insight into the Employee Assistance Program (EAP), which is a program meant to help provide coaching and assistance to federal employees. This program covers a wide variety of services such as financial and legal services, critical incident response and management consultation and counseling.
• National Active and Retired Federal Employees: The NARFE is a nonprofit organization dedicated to the overall welfare of federal workers and retirees, where they offer a variety of resources on in-depth issues such as finances, retirement, health care, life insurance and more.