WEBVTT

NOTE
This file was generated by Descript 

00:00:05.069 --> 00:00:07.289
Introduction: Welcome to the
Fiscal Firehouse, a podcast

00:00:07.289 --> 00:00:10.109
dedicated to promoting financial
literacy to firefighters.

00:00:10.259 --> 00:00:14.819
I'm your co-host, John Beatty, executive
board member of Local 1309, a lieutenant,

00:00:14.939 --> 00:00:16.979
and also a certified financial planner.

00:00:17.309 --> 00:00:21.869
With me, I have the other co-host of the
fiscal firehouse, Louis Barella, executive

00:00:21.869 --> 00:00:25.979
Board member of Local 1309 ambulance
driver, and want to be financial expert.

00:00:26.579 --> 00:00:29.639
Together, John and I hope to bring
clarity to the world of personal finance,

00:00:29.699 --> 00:00:31.439
specifically relating to firefighters.

00:00:31.949 --> 00:00:34.409
Firefighting is a
difficult job making sound.

00:00:34.409 --> 00:00:35.814
Financial decisions shouldn't be.

00:00:36.329 --> 00:00:39.374
Intro Part 2: In today's episode of
the fiscal Firehouse, John and Louis

00:00:39.749 --> 00:00:43.889
will continue to discuss the defined
benefit pension Plan administered

00:00:43.889 --> 00:00:49.019
through the Fire and Police Pension
Association, also known as FPPA.

00:00:49.379 --> 00:00:53.129
In part two of today's episode,
John and Louie will discuss

00:00:53.159 --> 00:00:54.929
different retirement options.

00:00:55.574 --> 00:01:00.014
Offered through the defined benefit
plan, specifically focusing on deferred

00:01:00.014 --> 00:01:05.714
retirement, the drop plan, also known as
the deferred retirement option plan, and

00:01:05.714 --> 00:01:11.144
also discussing the survivorship options
associated with the defined benefit plan.

00:01:11.784 --> 00:01:15.804
Without further ado, let's kick it
over to local 1309 studios and the

00:01:15.804 --> 00:01:17.934
recording of the fiscal firehouse.

00:01:20.044 --> 00:01:23.554
Jon: Welcome back to another
episode of the Fiscal Firehouse.

00:01:23.914 --> 00:01:26.164
I'm your co-host John
Beatty with me as always.

00:01:26.164 --> 00:01:29.404
And is Michigan Attire Louis Barella lb.

00:01:29.404 --> 00:01:30.394
How's it going today, buddy?

00:01:30.514 --> 00:01:31.024
Louie: Good man.

00:01:31.504 --> 00:01:32.524
Tournament's about to start

00:01:32.914 --> 00:01:33.514
Jon: tournament.

00:01:33.634 --> 00:01:35.554
Louie: Don't have high hopes for
Michigan, but that's all right.

00:01:35.584 --> 00:01:37.594
Jon: What's their, what's their
seating, what's their ranking?

00:01:37.874 --> 00:01:40.274
Louie: we are a six seed.

00:01:40.589 --> 00:01:41.099
Jon: Oh, okay.

00:01:41.099 --> 00:01:41.789
Number six.

00:01:41.789 --> 00:01:43.169
All right, so that's not terrible.

00:01:43.169 --> 00:01:46.589
I think old Scott's got number three
and they're actually, both of our

00:01:46.589 --> 00:01:48.059
teams are playing here in Denver.

00:01:48.569 --> 00:01:52.499
But, we are committed to the fiscal
firehouse and we're out here doing it.

00:01:52.634 --> 00:01:53.684
Louie: First things first.

00:01:53.689 --> 00:01:53.709
First

00:01:53.879 --> 00:01:54.329
Jon: first.

00:01:54.389 --> 00:01:57.339
We didn't, we didn't have the money
though, 'cause we made bad financial

00:01:57.369 --> 00:01:59.619
decisions to afford those tickets.

00:01:59.619 --> 00:02:03.069
So, you know what, maybe that is the one
really good piece of financial advice

00:02:03.069 --> 00:02:07.539
we should give on what is probably
the number one gambling holiday of

00:02:07.539 --> 00:02:11.589
the whole year, besides maybe the
Super Bowl is, how to do parlays.

00:02:11.619 --> 00:02:11.649
Parlays.

00:02:11.999 --> 00:02:12.489
Louie: Parlays.

00:02:12.799 --> 00:02:13.089
Dude.

00:02:13.404 --> 00:02:14.184
Oh my gosh.

00:02:14.184 --> 00:02:15.594
I, you know what we have, I.

00:02:15.954 --> 00:02:19.464
I, I don't know about you John, but
I get a lot of people that will rove

00:02:19.464 --> 00:02:23.114
through threes or, I'm interacting
at training or whatever with them.

00:02:23.474 --> 00:02:25.934
And they're like, Hey, when are
you gonna do the crypto episode?

00:02:25.994 --> 00:02:27.794
When are you gonna do the
sports betting account?

00:02:28.154 --> 00:02:32.504
I had a, I had our old friend from, from
B Shift, Jackson Wagner was like, Hey,

00:02:32.594 --> 00:02:36.824
I, do you even need a checking account
if you just have a sports betting app?

00:02:36.824 --> 00:02:38.174
that's just where I just keep my money.

00:02:38.174 --> 00:02:38.504
Jon: Yeah.

00:02:38.504 --> 00:02:40.514
When is my mortgage start
gonna be taken outta

00:02:40.724 --> 00:02:43.454
Louie: The old, the old one
B is pretty degenerate, man.

00:02:43.454 --> 00:02:44.264
Those guys are

00:02:44.444 --> 00:02:44.985
Jon: oh, those are,

00:02:45.314 --> 00:02:48.524
Louie: it's, it's worth it to do 24 hours
with them just to see how they live.

00:02:48.524 --> 00:02:49.004
It is,

00:02:49.034 --> 00:02:49.334
Jon: yeah.

00:02:49.334 --> 00:02:49.814
If you want to

00:02:49.964 --> 00:02:51.884
Louie: It gives me
heartburn just being there.

00:02:52.064 --> 00:02:56.064
Jon: Yeah, they were, they were at the
pinnacle of one, the GameStop, the meme

00:02:56.664 --> 00:03:00.474
mania if you want, and all the things
that went right and wrong with that.

00:03:00.744 --> 00:03:01.404
Louie: The epicenter.

00:03:01.524 --> 00:03:02.364
Jon: The epicenter.

00:03:02.364 --> 00:03:02.379
The epicenter.

00:03:02.384 --> 00:03:03.204
So yeah.

00:03:03.204 --> 00:03:07.494
So just, the full disclosures, if you
are going to bet, bet responsibly, I.

00:03:07.704 --> 00:03:11.664
Don't, don't mortgage anything that you
don't have and enable to, to, to lose.

00:03:11.664 --> 00:03:15.294
So, but it's just become, I mean,
so prominent though, it's amazing,

00:03:15.294 --> 00:03:18.094
like people that I would've
never thought that were, betting.

00:03:18.094 --> 00:03:20.704
It just, it's become so, I
don't even say like culturally

00:03:20.704 --> 00:03:21.724
acceptable, it's just a thing.

00:03:21.724 --> 00:03:24.574
Like a lot of people do it because it
keeps them more interested in watching

00:03:24.574 --> 00:03:28.244
sports and, if that's your source of
entertainment and you like to do that, by

00:03:28.244 --> 00:03:30.014
all means just, be responsible about it.

00:03:30.014 --> 00:03:33.374
Please, we don't want to have any
further, further issues with that.

00:03:33.374 --> 00:03:36.494
So you don't wanna give
a shout out to the CPFF.

00:03:36.544 --> 00:03:38.924
they got us, a little advertisement.

00:03:38.974 --> 00:03:42.784
so we've actually had a lot more increase
in listenership if you will, from a

00:03:42.784 --> 00:03:44.704
lot of different locals in the area.

00:03:44.704 --> 00:03:47.434
So, welcome everyone,
if this is new to you.

00:03:47.534 --> 00:03:48.524
we're super excited about it.

00:03:48.524 --> 00:03:51.314
We've had a lot of good feedback from
other locals like, man, this is great.

00:03:51.314 --> 00:03:53.474
This is totally applicable
to what our members want.

00:03:53.744 --> 00:03:56.354
We do it in some form or fashion,
but the way that you guys are

00:03:56.354 --> 00:03:57.794
doing it, it's really appreciated.

00:03:57.794 --> 00:04:01.124
So really big shout out to all
you guys and if you guys want.

00:04:01.124 --> 00:04:03.969
More thoughts or how we're gonna
proceed with this, by all means, you

00:04:03.969 --> 00:04:06.099
know, how to get ahold of us as always.

00:04:06.489 --> 00:04:06.699
But

00:04:07.349 --> 00:04:07.589
Louie: Yeah.

00:04:07.619 --> 00:04:08.324
So speaking of,

00:04:08.409 --> 00:04:08.829
Jon: of

00:04:09.469 --> 00:04:11.314
Louie: not keeping your money in a

00:04:12.334 --> 00:04:13.739
Jon: in a DraftKings account,

00:04:14.089 --> 00:04:19.369
Louie: book account, that leads us
to our money saving tip of the week.

00:04:19.369 --> 00:04:23.329
And here's, here's the truth,
everyone listening to this, we

00:04:23.329 --> 00:04:26.029
are not gonna be able to beat what
John brought you guys last that

00:04:26.029 --> 00:04:27.439
we got so much positive feedback.

00:04:27.439 --> 00:04:31.579
That's probably gonna be the lasting
legacy of the fiscal firehouse is, how

00:04:31.579 --> 00:04:33.849
to get money back from, the government.

00:04:34.059 --> 00:04:35.769
Yeah, the unclaimed property, money back.

00:04:36.159 --> 00:04:39.129
We don't have anything that sexy
today, but it's something that we

00:04:39.129 --> 00:04:43.129
think you should consider because it
could save you a lot of money, over

00:04:43.159 --> 00:04:45.229
the course of a year or numerous years.

00:04:45.229 --> 00:04:46.609
And that's banking.

00:04:47.149 --> 00:04:50.579
So, I would, we would encourage people,
we wanna encourage people to look

00:04:50.579 --> 00:04:53.099
at their banking options and see who
they're banking with and see if you

00:04:53.099 --> 00:04:55.109
have better options available to you.

00:04:55.709 --> 00:04:57.119
A lot of people will
go with one of the big.

00:04:58.139 --> 00:05:00.509
Mega banks like Chase or Wells Fargo.

00:05:00.959 --> 00:05:04.369
And the truth about that is they,
they charge you a lot of fees.

00:05:04.369 --> 00:05:08.559
They have a lot of fees for, different
things, not meeting minimum requirements,

00:05:08.859 --> 00:05:10.569
overdraft fees, just things like

00:05:10.629 --> 00:05:12.279
Jon: administrative fees, they just Yep.

00:05:12.429 --> 00:05:12.849
Nickel and

00:05:13.034 --> 00:05:13.324
Louie: yeah.

00:05:13.324 --> 00:05:15.519
And there are way, way
better options there.

00:05:15.759 --> 00:05:19.419
And I would say, for, for brick and
mortars, if you need an actual place

00:05:19.419 --> 00:05:22.989
where you need to go in and deposit
cash or do business with, I don't

00:05:22.989 --> 00:05:24.039
think you can beat a credit union.

00:05:24.099 --> 00:05:26.619
I think credit unions are better
than Chase, better than Wells

00:05:26.619 --> 00:05:28.479
Fargo, better than Bank of America.

00:05:28.849 --> 00:05:30.229
I would set up a.

00:05:30.644 --> 00:05:35.804
an accountant with a credit union, they
generally have no fees, no minimums.

00:05:36.054 --> 00:05:39.814
they let you do free transfers, and they
give you really good customer service.

00:05:39.814 --> 00:05:41.704
And that's something that is
lacking from the big boys.

00:05:41.704 --> 00:05:45.774
Those big boys are just so,
overburdened with complaints and

00:05:45.774 --> 00:05:50.094
customer service issues that you are
not gonna get the same level of service

00:05:50.094 --> 00:05:51.564
as if you go into a credit union.

00:05:51.844 --> 00:05:54.814
I know we at West Metro
use Foothills Credit Union.

00:05:54.814 --> 00:05:54.874
Yeah.

00:05:55.124 --> 00:05:59.134
we have a deal with them, to give you a
really good, kickback if you're a new guy.

00:05:59.134 --> 00:06:00.479
So if you are mm-hmm.

00:06:00.634 --> 00:06:04.114
So if you are a new guy, you get a little
cash back bonus and that could save you.

00:06:04.114 --> 00:06:06.694
That's, I think that's a
hundred dollars, either

00:06:06.709 --> 00:06:07.519
Jon: 50 or a hundred.

00:06:07.519 --> 00:06:09.229
I'd have to confirm
with Reid what that is.

00:06:09.229 --> 00:06:10.999
But it's, it literally is free money.

00:06:11.029 --> 00:06:12.349
There's no strings attached.

00:06:12.629 --> 00:06:15.029
it's just something if you open
up account with them, they just

00:06:15.209 --> 00:06:16.709
start that initial deposit.

00:06:16.889 --> 00:06:16.979
Yeah.

00:06:16.979 --> 00:06:19.529
I feel like it might be 50 bucks, but
I'll have to double check with Reid.

00:06:19.529 --> 00:06:22.649
But nonetheless, whether it's 50 or a
hundred dollars, that's literally free

00:06:22.649 --> 00:06:24.359
money for having an account opened up.

00:06:24.654 --> 00:06:24.894
Louie: Absolutely.

00:06:24.959 --> 00:06:27.689
And then I'll, I'll open the kimono
a little bit and just tell you what I

00:06:27.689 --> 00:06:29.369
do just with my own personal banking.

00:06:29.369 --> 00:06:33.119
So I have a credit union
account that I use to do actual

00:06:33.119 --> 00:06:37.309
in-person, personal banking, but,
from a face-to-face business.

00:06:37.379 --> 00:06:39.119
and I have that credit union account.

00:06:39.119 --> 00:06:41.579
And then I also have an online account.

00:06:41.579 --> 00:06:45.089
And the cool thing about the online
savings account and online bank accounts

00:06:45.419 --> 00:06:49.029
is that they generally offer a much,
much higher interest rate, on your

00:06:49.029 --> 00:06:51.189
savings than you can get otherwise.

00:06:51.339 --> 00:06:56.419
So, I was with Capital One, for my banking
because they're an online only bank.

00:06:56.619 --> 00:06:59.499
actually back east they do have brick
and mortars, but in general, for the,

00:06:59.559 --> 00:07:01.629
for the nation, they do online banking.

00:07:01.959 --> 00:07:06.969
And I think that my savings rate
with them was like about 3.8%

00:07:07.014 --> 00:07:07.104
Jon: Mm-hmm.

00:07:07.119 --> 00:07:11.679
Louie: something like that, which is a
great return on, on uninvested savings.

00:07:12.079 --> 00:07:13.819
and right now I've, I've
consolidated everything.

00:07:13.819 --> 00:07:14.299
I was on a.

00:07:14.644 --> 00:07:17.554
Mission last year to put
everything under one umbrella.

00:07:17.884 --> 00:07:21.464
And I went with Fidelity 'cause I think
they're a really, really good, firm.

00:07:21.734 --> 00:07:25.314
And they have a cash management
account, which is, like a checking

00:07:25.314 --> 00:07:26.874
and savings account combined in one.

00:07:27.024 --> 00:07:31.254
And so I earn about 4%
on my cash with fidelity.

00:07:31.254 --> 00:07:33.774
So the vast majority of my.

00:07:34.179 --> 00:07:38.389
Money is with Fidelity earning
about 4%, which is awesome.

00:07:38.479 --> 00:07:40.499
On my, checking slash savings account.

00:07:40.739 --> 00:07:46.189
They do free checks, they do, unlimited
ATM reimbursements, which is awesome.

00:07:46.189 --> 00:07:50.299
Any A TMI go to, even if I'm in Vegas
at three in the morning at a casino,

00:07:50.359 --> 00:07:53.849
which I would never be, but if I were
and I needed to withdraw cash, they

00:07:53.849 --> 00:07:57.869
would not, they would reimburse any
fees that, that ATM charges me as well.

00:07:57.989 --> 00:08:01.829
So they don't charge fees and if
I have to spend $6 at an ATM, they

00:08:01.829 --> 00:08:03.119
would reimburse those as well.

00:08:03.119 --> 00:08:06.749
So yeah, free checks, free
ATM reimbursements worldwide.

00:08:07.089 --> 00:08:07.839
which is awesome.

00:08:08.199 --> 00:08:10.659
And yeah, it's just a
way, way better option.

00:08:10.659 --> 00:08:13.839
Some of those monster mega banks, they
charge you for using someone else's

00:08:13.839 --> 00:08:16.929
ATMs, they will charge you for checks.

00:08:16.989 --> 00:08:20.079
So we would encourage you guys to
look at better banking options.

00:08:20.409 --> 00:08:22.359
And those were just a couple
off the top of my head.

00:08:22.494 --> 00:08:23.394
Jon: Yeah, no, that's great.

00:08:23.394 --> 00:08:27.544
It sounds like we bank similarly
where I have a local bank, it's the,

00:08:27.544 --> 00:08:29.644
it's a local credit union, right?

00:08:29.644 --> 00:08:33.064
Actually it's the Denver Federal
Credit Unions where I set up shop.

00:08:33.384 --> 00:08:37.014
and they've always been very good customer
service and definitely have more of that,

00:08:37.044 --> 00:08:38.904
personalized experience, which is great.

00:08:38.904 --> 00:08:42.064
So, really the credit union is more
of a tie to the local community.

00:08:42.134 --> 00:08:46.044
and what, what the local IFF
affiliates are all about is like

00:08:46.044 --> 00:08:47.394
supporting local businesses.

00:08:47.664 --> 00:08:50.934
So whenever we do anything through
the union, we always go to someone

00:08:50.964 --> 00:08:53.964
that's got local ties and not to chain
restaurants and everything else like that.

00:08:53.964 --> 00:08:55.944
'cause it's important to us
to support our community.

00:08:55.944 --> 00:08:59.514
And that's really what you're investing
in, is you're investing in the community

00:08:59.514 --> 00:09:00.834
when you bank with the credit union.

00:09:00.834 --> 00:09:03.054
'cause that's where the majority
of the members come from.

00:09:03.054 --> 00:09:06.414
And when they're giving out loans, it's
the local businesses and everything else.

00:09:06.414 --> 00:09:09.934
And it just keeps that, that,
ecosystem if you will, local.

00:09:09.994 --> 00:09:10.744
And that's what we're.

00:09:10.789 --> 00:09:13.919
all about from, obviously
being a, a local member.

00:09:13.919 --> 00:09:14.979
So, all good.

00:09:14.979 --> 00:09:16.869
And yeah, I can't, can't
highlight enough though.

00:09:16.869 --> 00:09:20.169
There's a ton of different
online banks and savings accounts

00:09:20.169 --> 00:09:21.069
and all those other things.

00:09:21.069 --> 00:09:24.039
So if you got some cash dashed away,
you can definitely get a little

00:09:24.039 --> 00:09:27.829
bit more, return on that, on that
investment by just keeping it there.

00:09:27.829 --> 00:09:30.289
So we'll leave it some,
short and simple on that one.

00:09:30.339 --> 00:09:32.929
that does, as soon as you're starting
to talk about checks, I'm like,

00:09:32.929 --> 00:09:34.369
man, Louie, we're getting old, dude.

00:09:34.369 --> 00:09:34.459
I know.

00:09:34.759 --> 00:09:35.659
No one else is.

00:09:35.659 --> 00:09:37.819
Like, when was the last
time you wrote a check?

00:09:38.099 --> 00:09:41.399
but to that point, we are going to,
we've gotten actually some feedback.

00:09:41.429 --> 00:09:46.559
credit cards are obviously a topic of
conversation a lot around the firehouse.

00:09:46.749 --> 00:09:49.929
people are into different rewards points
and travel and all these other things.

00:09:49.929 --> 00:09:53.279
So we're gonna Designate a, an
episode to the credit cards, right?

00:09:53.279 --> 00:09:54.879
And just how to use 'em responsibly.

00:09:55.119 --> 00:09:58.329
But if you do use 'em responsibly, there
are some additional benefits that you

00:09:58.329 --> 00:10:00.249
can get if, if you use 'em appropriately.

00:10:00.249 --> 00:10:03.279
So I know that was something that
a lot of people are always scheming

00:10:03.279 --> 00:10:06.919
on, in ways to just take advantage
of, being responsible, having a

00:10:06.919 --> 00:10:08.449
good credit history, all that stuff.

00:10:08.449 --> 00:10:11.934
So there'll be more to come as
far as the, credit card game.

00:10:11.984 --> 00:10:15.554
Louie: We'll talk about
airport lounges and rewards

00:10:15.684 --> 00:10:19.674
Jon: rewards, churning like all
the, all the buzzwords, right?

00:10:19.844 --> 00:10:21.464
Episode that will be a fun episode.

00:10:21.464 --> 00:10:24.824
But, so that's our quick little hit on
just how to, once again, keep a little

00:10:24.824 --> 00:10:26.934
ching in your pocket so to speak.

00:10:26.964 --> 00:10:30.384
but we did, you know, with
the Colorado great payback,

00:10:30.514 --> 00:10:31.594
making people aware of that.

00:10:32.194 --> 00:10:36.844
So far what I've heard the leading the
person at the leaderboard, 2,800 bones

00:10:37.319 --> 00:10:38.704
is what they got coming back to 'em.

00:10:38.704 --> 00:10:40.354
So we just asked for a drink.

00:10:40.414 --> 00:10:40.834
I don't know what

00:10:40.924 --> 00:10:41.449
Louie: I know, man.

00:10:41.494 --> 00:10:43.954
Jon: that's gonna be
a Macallans 12 year or

00:10:43.969 --> 00:10:44.869
Louie: some nice whiskey.

00:10:44.924 --> 00:10:47.474
Jon: there's been, another one that
I heard of was like a thousand bucks.

00:10:47.474 --> 00:10:51.344
So, yeah, once again, if you didn't
listen to the previous episodes, if

00:10:51.344 --> 00:10:54.944
you're in Colorado, the great Colorado
payback is what you want to Google, and

00:10:54.944 --> 00:10:58.064
it's basically a way that you can get
unclaimed property that is rightly yours.

00:10:58.064 --> 00:11:01.634
They just have a way to find you
to disseminate it and, let us know.

00:11:01.634 --> 00:11:05.534
Send us a, send us a line on, on
who's gonna be the winner of that one.

00:11:05.534 --> 00:11:05.894
So.

00:11:06.489 --> 00:11:07.419
We'll get rolling here.

00:11:07.419 --> 00:11:10.059
this is part two of the, pension episode.

00:11:10.059 --> 00:11:12.849
Part one, just rehashing
what we covered in part one.

00:11:13.179 --> 00:11:16.469
Part one was really all about,
just generally speaking,

00:11:16.469 --> 00:11:17.759
how does the pension work,

00:11:17.979 --> 00:11:19.989
How do you get your, benefits?

00:11:19.989 --> 00:11:21.209
How are they, calculated?

00:11:21.209 --> 00:11:22.079
How are they accrued?

00:11:22.259 --> 00:11:23.399
How is it funded?

00:11:23.499 --> 00:11:26.889
all the building blocks, if
you will, of the pension.

00:11:26.889 --> 00:11:26.949
Yeah.

00:11:27.159 --> 00:11:31.599
So now, episode number two is gonna
be into some of the nuance stuff,

00:11:31.629 --> 00:11:36.099
and that's more talking about like
the deferred option, the drop plan,

00:11:36.199 --> 00:11:39.769
survivorship options, all the other
nuanced stuff that goes with that.

00:11:40.079 --> 00:11:41.039
full disclaimer.

00:11:41.719 --> 00:11:45.919
With all this stuff, with FPPA
specifically, always reach out to

00:11:45.919 --> 00:11:49.759
them directly for the most accurate
information, We're just giving you general

00:11:49.759 --> 00:11:53.299
overview stuff, just how we know that
the plan is facilitated and what kind

00:11:53.299 --> 00:11:56.269
of, what the plan brochures state, but
really when you're talking about your

00:11:56.269 --> 00:11:58.819
individual situation, reach out to them.

00:11:58.819 --> 00:12:01.009
'cause they can run the
most accurate calculations,

00:12:01.009 --> 00:12:02.029
Louie: And they're pretty good about that.

00:12:02.029 --> 00:12:04.819
They like to help, they like to run
numbers for you and let you know

00:12:04.819 --> 00:12:09.139
what your benefit would be, what your
options are for early retirement.

00:12:09.139 --> 00:12:09.289
Yeah,

00:12:09.289 --> 00:12:11.779
Jon: they're awesome for retirement
and they do, they love coming out to

00:12:11.779 --> 00:12:14.809
the stations and doing their sites
visits and all that other stuff.

00:12:14.809 --> 00:12:18.559
So, and really before you make any
decisions, obviously you consult with

00:12:18.559 --> 00:12:22.669
FPPA, but then also consult with,
if you have a financial planner or

00:12:22.669 --> 00:12:26.329
advisor, you wanna make sure that you
basically have one chance to do it right?

00:12:26.329 --> 00:12:26.389
Yeah.

00:12:26.599 --> 00:12:28.969
You want 'em to just make sure that
you have all the information and

00:12:28.969 --> 00:12:32.789
that you're making the best, educated
decision that you have based on

00:12:32.789 --> 00:12:33.989
the information that you currently

00:12:34.259 --> 00:12:36.979
Louie: And if you are a younger,
firefighter here, we would

00:12:36.979 --> 00:12:40.009
encourage you or just a younger
firefighter in Colorado in general.

00:12:40.139 --> 00:12:45.179
this is gonna be a really good episode to
listen to because we'll talk about, how

00:12:45.179 --> 00:12:50.149
to set yourself up so that you might defer
your pension and let it grow that way.

00:12:50.389 --> 00:12:53.589
Or, how you can plan to
do the drop or whatever.

00:12:53.589 --> 00:12:56.829
We'll talk about some of those strategies
and trade-offs and stuff like that too.

00:12:56.829 --> 00:13:00.189
So this is good to consider as you're
not only building your pension, but

00:13:00.189 --> 00:13:04.959
hopefully building your 4 57, your IRA,
and your other savings, to give you some

00:13:05.019 --> 00:13:08.499
really cool options with your pension
as you get closer towards retirement.

00:13:08.934 --> 00:13:09.324
Jon: Perfect.

00:13:09.484 --> 00:13:12.034
so maybe we will start with,
you wanna start with deferred

00:13:12.034 --> 00:13:13.264
or you want to go drop first?

00:13:13.519 --> 00:13:14.659
Louie: do deferred.

00:13:14.914 --> 00:13:16.264
Jon: We'll start with the deferred plan.

00:13:16.264 --> 00:13:16.324
Yeah.

00:13:17.164 --> 00:13:17.464
Louie: Yeah.

00:13:17.464 --> 00:13:21.464
So, deferred retirement, everything we've
been talking about before, this was for

00:13:21.464 --> 00:13:26.564
like a normal retirement, but FPPA gives
you the option to defer your pension.

00:13:26.894 --> 00:13:30.574
And what that means is on the day
you retire, if you want, you can

00:13:30.574 --> 00:13:33.304
take your pensionable amount, you
can get your pensionable amount.

00:13:33.644 --> 00:13:36.614
we talked about that chart, that kind of
shows you what you would be eligible for.

00:13:37.064 --> 00:13:42.254
However, FPPA will let you,
forego your pension for.

00:13:42.569 --> 00:13:43.259
Years.

00:13:43.649 --> 00:13:48.059
And by doing that they give you
a higher pensionable amount.

00:13:48.479 --> 00:13:52.499
So if you qualify for a normal
retirement or a vested retirement, you

00:13:52.499 --> 00:13:55.019
can delay when you collect benefits.

00:13:55.289 --> 00:14:00.929
And by doing so, you would increase on an
actuarial basis, you would increase your

00:14:00.929 --> 00:14:03.519
pensionable amount, so that it's higher.

00:14:03.909 --> 00:14:08.029
And this is, this is not, a hard and
fast rule, but in general, if you just

00:14:08.029 --> 00:14:14.089
wanted to do some napkin math, for every
year you delay, you would get about 8.5

00:14:14.089 --> 00:14:17.929
to 9% increase to your
pensionable benefit amount.

00:14:18.369 --> 00:14:19.029
so that's cool.

00:14:19.079 --> 00:14:21.549
just giving a quick example
of what that would look like.

00:14:22.149 --> 00:14:27.249
Let's say you have been a fiscal
firehouse listener from day one and

00:14:27.249 --> 00:14:33.249
you have a bunch of 4 57 and Roth
IRA money that you can live on.

00:14:33.249 --> 00:14:34.659
And that is like a strong.

00:14:35.324 --> 00:14:39.414
pillar of your financial plan, and
you get to the point where you're

00:14:39.414 --> 00:14:43.504
gonna retire and you say, you know
what, I can, retire now I'm at the

00:14:43.504 --> 00:14:46.204
rule of 80 and I can get about 57.5%

00:14:46.534 --> 00:14:48.364
of my three highest year salary.

00:14:48.884 --> 00:14:52.334
but because I have so much cash, so
much investments, I wanna live on those

00:14:52.334 --> 00:14:57.164
for a few years and I want to delay
when I take my pension by three years.

00:14:57.624 --> 00:15:05.464
if you do that, you would get about, 35%
more in your pensionable amount than you

00:15:05.464 --> 00:15:07.714
would if you took it the day you retired.

00:15:08.134 --> 00:15:08.284
Correct.

00:15:08.344 --> 00:15:09.574
Which is a pretty cool option,

00:15:09.739 --> 00:15:10.309
Jon: is great.

00:15:10.369 --> 00:15:14.219
Yeah, it just gives, it gives, the
membership a little bit more flexibility

00:15:14.219 --> 00:15:18.069
in how they want to do, retirement
income in the future and how they,

00:15:18.069 --> 00:15:22.304
it just gives them more options as
far as controlling taxes and some of

00:15:22.309 --> 00:15:25.389
the other things that are associated
with that as soon as you retire.

00:15:25.389 --> 00:15:27.469
So, I think, I mean, it'd be interesting.

00:15:27.469 --> 00:15:29.149
I would love to talk to FPPA.

00:15:29.389 --> 00:15:31.969
Like it'd be really good to get
some data as far as, the average

00:15:31.969 --> 00:15:35.579
person that retires, do they
take, just take normal retirement?

00:15:35.609 --> 00:15:38.099
Do they do the drop plan, which
we'll talk about here in a minute.

00:15:38.249 --> 00:15:39.629
Do they do deferred retirement?

00:15:39.629 --> 00:15:43.199
I would really love to, I'm curious
myself just to see what that looks like.

00:15:43.199 --> 00:15:44.159
I'm guessing like.

00:15:44.679 --> 00:15:48.909
Anecdotally speaking, I think the majority
of people probably take normal retirement,

00:15:48.909 --> 00:15:51.789
so as soon as they retire, they start
taking that monthly income stream.

00:15:52.119 --> 00:15:55.829
But it would be really interesting to see,
just numbers wise, what that looks like.

00:15:55.829 --> 00:15:59.369
So maybe Lou and I will reach out to
FPPA and see if we can get some facts.

00:15:59.419 --> 00:16:00.499
More than anything else.

00:16:00.499 --> 00:16:01.309
Just curious about

00:16:01.309 --> 00:16:02.269
Louie: just some stats.

00:16:02.274 --> 00:16:02.984
Yeah, some stats

00:16:03.109 --> 00:16:04.189
Jon: to help support that.

00:16:04.189 --> 00:16:07.289
So, yeah, the deferred retirement
though, this is one honestly that we

00:16:07.289 --> 00:16:11.399
get asked a lot, differentiating between
that and then the drop plan, which

00:16:11.399 --> 00:16:12.509
we'll talk about here in a minute.

00:16:12.509 --> 00:16:14.359
But, the deferred retirement though, I'll.

00:16:14.379 --> 00:16:17.669
Put myself in the, the
case study, if you will.

00:16:17.699 --> 00:16:20.759
And this is something that
I am gonna look at doing.

00:16:20.759 --> 00:16:24.329
So, just because, we've been, my wife
and I have been pretty aggressive

00:16:24.329 --> 00:16:28.289
savers and have got some monies coming
in, or we will have monies available

00:16:28.289 --> 00:16:32.369
to tap as far as the 4 57 and some
taxable accounts and other stuff.

00:16:32.419 --> 00:16:36.839
it's a way that we can honestly help
keep us in the lower, income bracket

00:16:36.869 --> 00:16:40.829
when I retire, when I defer and not
take this monthly income, which will

00:16:40.829 --> 00:16:42.599
actually help with healthcare subsidies.

00:16:42.599 --> 00:16:45.059
And there's a lot of other reasons that
you want to keep yourself in a lower

00:16:45.059 --> 00:16:46.649
tax bracket as soon as you retire.

00:16:46.899 --> 00:16:48.789
because we're also gonna do some Roth

00:16:49.039 --> 00:16:49.879
Louie: conversion ladder.

00:16:49.879 --> 00:16:51.139
I knew you were gonna say that,

00:16:51.159 --> 00:16:53.679
Jon: that we're gonna do, which
we will, honestly, it's, it's

00:16:53.679 --> 00:16:54.819
a little bit more complicated.

00:16:54.819 --> 00:16:58.389
So that's not the intent of today's
episode, but we will talk more about

00:16:58.629 --> 00:17:01.419
when it's appropriate to consider
maybe doing some Roth conversion.

00:17:01.419 --> 00:17:04.239
So that's definitely a strategy
that we're going to implement.

00:17:04.549 --> 00:17:07.399
so there's just a lot more
flexibility that you have.

00:17:07.444 --> 00:17:08.254
With this.

00:17:08.474 --> 00:17:11.294
so it's just something to be mindful
of, just understand how it works.

00:17:11.294 --> 00:17:14.864
So if you understand social
security, which we talked about in

00:17:14.864 --> 00:17:17.954
a previous episode, the deferred
retirement is very similar.

00:17:17.954 --> 00:17:22.404
So, social Security says that for most
people, full retirement age is 67, so that

00:17:22.404 --> 00:17:24.084
would be normal retirement age, right?

00:17:24.694 --> 00:17:28.984
the deferred option is very similar,
like delaying social security and we

00:17:28.984 --> 00:17:32.704
know that if you delay social security
every year, you basically get another

00:17:32.704 --> 00:17:35.614
8% per year every year to defer.

00:17:35.614 --> 00:17:39.294
And this is all math, As Louis
said, this is all actuarial based.

00:17:39.684 --> 00:17:40.314
That's all it is.

00:17:40.314 --> 00:17:42.924
It's just moving around
numbers, life expectancy, ages.

00:17:42.924 --> 00:17:45.564
So it's just a kind of
a complex math problem.

00:17:45.564 --> 00:17:49.184
So we'll put the chart up on the
Instagram post maybe just so, as a

00:17:49.184 --> 00:17:50.834
reference point as you guys are deciding.

00:17:50.834 --> 00:17:52.734
And, nothing really locks you in.

00:17:52.764 --> 00:17:56.994
The only thing is, I believe,
if I'm not wrong, is buy 65.

00:17:57.324 --> 00:17:58.764
You have to start taking it right, Louis?

00:17:58.764 --> 00:18:01.014
So if you retired at 55.

00:18:01.034 --> 00:18:02.384
So you could delay.

00:18:02.384 --> 00:18:06.244
I mean, if you had a huge bank, then
you could delay up for 10 years and

00:18:06.244 --> 00:18:08.074
you're talking some serious cabbage.

00:18:08.134 --> 00:18:08.884
So what is it?

00:18:09.094 --> 00:18:10.714
I'm just looking at the chart right now.

00:18:10.719 --> 00:18:12.304
240%?

00:18:12.979 --> 00:18:14.269
Louie: of your pensionable amount

00:18:14.764 --> 00:18:19.474
Jon: So if I retired at 55 and
I delayed for 10 years, it would

00:18:19.474 --> 00:18:24.364
be instead of a hundred percent
of my benefit, I would get 240%.

00:18:24.424 --> 00:18:24.544
That's

00:18:24.769 --> 00:18:25.489
Louie: which is pretty sweet.

00:18:25.704 --> 00:18:26.124
That's

00:18:26.164 --> 00:18:26.584
Jon: chunk of

00:18:26.764 --> 00:18:28.249
Louie: a, that's a big pension.

00:18:28.249 --> 00:18:28.999
That's a big pension.

00:18:29.329 --> 00:18:30.769
But you, but you've given up 10

00:18:30.874 --> 00:18:32.914
Jon: 10 years of getting
those monthly draws.

00:18:32.914 --> 00:18:36.394
So it's all it looks really good on
paper, but you gotta do the math too.

00:18:36.394 --> 00:18:39.074
And there's a lot of, Excel
spreadsheets that you can do this.

00:18:39.074 --> 00:18:42.944
And that's basically more or less with
FEPA has, it's just a fancy spreadsheet

00:18:42.944 --> 00:18:45.344
that they calculate this and they
give you all the different options.

00:18:45.344 --> 00:18:48.404
So, and they are very good at
running these analysis for you.

00:18:48.714 --> 00:18:52.684
and it's always good, obviously, the
closer to retirement you are, the more

00:18:52.684 --> 00:18:54.454
accurate these projections are gonna be.

00:18:54.704 --> 00:18:56.114
so take that with a grain of salt.

00:18:56.114 --> 00:18:58.874
Right now when we were looking at our
salaries and you still got 15 years

00:18:58.874 --> 00:19:02.444
to work, this is probably gonna look a
little bit differently, but that is what

00:19:02.444 --> 00:19:05.044
the, deferred retirement is all about.

00:19:05.314 --> 00:19:06.994
Anything else you want to chat on that?

00:19:07.219 --> 00:19:10.799
Louie: No, I think, we'll rehash maybe
after we talk about the drop, but,

00:19:10.849 --> 00:19:13.369
that is what deferred retirement is.

00:19:13.429 --> 00:19:13.939
Jon: Perfect.

00:19:14.099 --> 00:19:18.369
another thing that is super
popular with the, with firefighters

00:19:18.369 --> 00:19:22.449
and FPPA specifically is this
concept of the drop plan.

00:19:22.479 --> 00:19:24.009
That's how most people talk about it.

00:19:24.009 --> 00:19:27.309
So it is the deferred
retirement option plan.

00:19:27.459 --> 00:19:29.049
So once again, it has deferred in there

00:19:29.164 --> 00:19:29.244
Louie: know.

00:19:29.244 --> 00:19:32.129
I hate, I hate that they use it
'cause it's the, it's the opposite

00:19:32.369 --> 00:19:34.199
Jon: People get confused, right?

00:19:34.199 --> 00:19:35.729
They're like, oh, okay, this is great.

00:19:35.729 --> 00:19:39.899
So the deferred retirement
option plan, AKA, the drop plan.

00:19:40.059 --> 00:19:43.779
the way that I always explain it is
basically as soon as you enter this

00:19:43.779 --> 00:19:47.349
plan, more or less, the department
says, thank you for your service.

00:19:47.409 --> 00:19:48.579
You are now retired.

00:19:48.669 --> 00:19:52.369
Like they, they're no longer, putting
into your retirement contributions.

00:19:52.369 --> 00:19:56.229
that's why most, employers really
like the drop plan, the other.

00:19:56.469 --> 00:20:01.149
Part of the drop plan is, is basically
as soon as you enroll in the plan,

00:20:01.369 --> 00:20:04.699
you sign a piece of paper with your
employer, basically saying that you

00:20:04.729 --> 00:20:08.299
are, are separating from service
more or less because now on paper

00:20:08.479 --> 00:20:10.249
you're more or less retired, right?

00:20:10.249 --> 00:20:13.369
So they are no longer going to make
those contributions or they might not

00:20:13.369 --> 00:20:15.529
make those contributions on your behalf.

00:20:15.809 --> 00:20:19.739
by signing that you basically have to
cease employment within five years,

00:20:19.989 --> 00:20:22.389
That's another reason why employers
love it, like from a planning

00:20:22.389 --> 00:20:23.859
perspective, they're like, okay, cool.

00:20:24.129 --> 00:20:26.349
I know this person is in the drop plan.

00:20:26.349 --> 00:20:30.519
I know within the next five years I'm
gonna have to account for replacing that

00:20:30.519 --> 00:20:32.799
person rather than other situations.

00:20:32.799 --> 00:20:34.689
It just makes planning
a little bit easier.

00:20:35.169 --> 00:20:37.239
All right, so what happens is, so.

00:20:37.324 --> 00:20:40.684
Once again on paper you're retired
so you're no longer continuing

00:20:40.684 --> 00:20:42.064
to accrue service credit.

00:20:42.304 --> 00:20:45.844
So if I retire and I put myself
in the drop plan, let's just

00:20:45.844 --> 00:20:47.584
once again say 55, right?

00:20:47.584 --> 00:20:50.524
So I've got 30 years of
service and I'm 55 years old.

00:20:50.554 --> 00:20:52.354
I'm now gonna enter the drop plan.

00:20:52.594 --> 00:20:55.384
So I am no longer accruing
any more service credit.

00:20:55.384 --> 00:20:59.824
So my, my pension plan, my payments
are gonna be based on that 30 years

00:20:59.824 --> 00:21:02.674
of service and 55, which is 70%.

00:21:03.094 --> 00:21:03.544
Alright?

00:21:03.704 --> 00:21:06.674
it's account that is set up
through FPPA through Fidelity,

00:21:06.804 --> 00:21:08.124
It's a self-directed account.

00:21:08.124 --> 00:21:12.474
So my money that my monthly pension
check, rather than me receiving

00:21:12.474 --> 00:21:13.944
it, I don't, I'm not gonna get it.

00:21:14.034 --> 00:21:17.254
It's gonna go directly into that
account, What else is, what else?

00:21:17.434 --> 00:21:19.504
What else is going to go into the account?

00:21:19.504 --> 00:21:20.884
Is what my.

00:21:21.159 --> 00:21:22.809
Payments are to the pension.

00:21:23.019 --> 00:21:24.969
So right now I'm at 14%.

00:21:25.239 --> 00:21:27.819
That is can continue
to go into the plan as

00:21:28.089 --> 00:21:28.659
Louie: Your member

00:21:28.929 --> 00:21:29.381
Jon: Your member, my member

00:21:29.559 --> 00:21:30.339
Louie: is what they call that.

00:21:30.549 --> 00:21:30.789
Jon: Yep.

00:21:30.789 --> 00:21:32.439
Is gonna continue to go into the plan.

00:21:32.739 --> 00:21:33.699
And then this

00:21:33.729 --> 00:21:34.359
Louie: is into the drop

00:21:34.629 --> 00:21:35.499
Jon: Into the drop account.

00:21:35.499 --> 00:21:35.503
Into the drop account.

00:21:35.919 --> 00:21:40.689
And then what has changed with legislation
and FPPA within the last several years

00:21:40.719 --> 00:21:43.059
is they are actually now allowing.

00:21:43.069 --> 00:21:48.779
Certain, employers to continue to make
that contribution on the member's behalf.

00:21:48.779 --> 00:21:53.159
So the employer contribution can
potentially also be going into that count.

00:21:53.369 --> 00:21:57.029
Now, this is not for everyone, and
to my knowledge, at least in our

00:21:57.029 --> 00:22:01.249
area, I believe there's six-ish fire
departments that currently have this

00:22:01.249 --> 00:22:03.439
in their, in their plan documents.

00:22:03.439 --> 00:22:07.669
And honestly, from a negotiation
standpoint, this is a lot of commonly

00:22:07.669 --> 00:22:11.039
negotiated items from the, those of
you that have collective bargaining.

00:22:11.229 --> 00:22:14.049
this is something that a lot of
unions are starting to look at as

00:22:14.049 --> 00:22:18.099
negotiating for their members as an
enhanced benefit to the drop account.

00:22:18.099 --> 00:22:22.359
So just to make things very clear, for
right now, for West Metro folks, this does

00:22:22.359 --> 00:22:24.399
not, this is currently not implemented,

00:22:24.399 --> 00:22:25.119
You are not.

00:22:25.119 --> 00:22:28.024
West Metro is not putting in money.

00:22:28.084 --> 00:22:30.244
Employer contributions
into your drop account.

00:22:30.424 --> 00:22:32.974
This is potentially something
down the road that could happen.

00:22:33.274 --> 00:22:37.264
But I know for a lot of the north
area fire agencies, a lot of them

00:22:37.264 --> 00:22:40.474
have this in their contract and
they are getting contributions from

00:22:40.474 --> 00:22:42.004
the employer into the drop account.

00:22:42.004 --> 00:22:45.814
So just something to be mindful of
and a potential negotiating item.

00:22:45.814 --> 00:22:49.324
Those of you that are listening from,
from the union aspect of it, something

00:22:49.324 --> 00:22:50.584
to consider for your membership.

00:22:50.609 --> 00:22:50.909
Louie: Yeah.

00:22:51.179 --> 00:22:55.539
So, just to simplify and make
sure we are clear on this.

00:22:55.659 --> 00:23:00.549
The, the day that you enter the drop,
you basically stop, you freeze your

00:23:00.549 --> 00:23:03.609
pensionable amount, that that pension
amount is set for the rest of your

00:23:03.609 --> 00:23:10.659
life, so that if it's 70% or 65% or
whatever, it will stay at that forever.

00:23:10.719 --> 00:23:12.219
You're retired from.

00:23:12.919 --> 00:23:14.929
From A-F-P-P-A view.

00:23:15.319 --> 00:23:19.099
So FPPA will take your pension and
basically those pension checks, even

00:23:19.099 --> 00:23:22.849
though you're still working at your
department, they will start contributing

00:23:22.849 --> 00:23:25.399
that pension check to your drop account.

00:23:25.759 --> 00:23:29.899
And then you will also continue to
get the, contribution, the member

00:23:29.899 --> 00:23:31.819
contributions into that drop account.

00:23:31.819 --> 00:23:34.999
And like John just said, some
departments are even putting the employer

00:23:34.999 --> 00:23:39.009
contributions into that drop account,
and then that drop account grows.

00:23:39.039 --> 00:23:43.809
That drop account is similar to a 4
57 or an IRA in the sense that you

00:23:43.809 --> 00:23:45.339
get to choose how it's invested.

00:23:45.579 --> 00:23:49.749
So you get to choose from an option, from
a few different options for investments

00:23:49.989 --> 00:23:55.779
and grow that account for the 1, 2, 3,
4, or five years that you're in the drop.

00:23:55.809 --> 00:23:59.819
So, basically what you're doing
in, in the simplest terms is you

00:23:59.819 --> 00:24:01.769
are creating a, a pool of money.

00:24:01.799 --> 00:24:02.519
You're creating a.

00:24:03.034 --> 00:24:05.944
Cash pull of money, you think your
pension benefit is gonna be high enough

00:24:06.004 --> 00:24:09.994
that you're willing to freeze it at the
point you enter the drop and instead

00:24:09.994 --> 00:24:15.334
of increasing your pension benefit,
you are increasing a cash amount.

00:24:15.724 --> 00:24:20.704
So you do that hopefully by the end
of the four or five years or however

00:24:20.704 --> 00:24:22.564
long you're in the drop, you retire.

00:24:22.564 --> 00:24:25.294
And then in addition to having
your pension checks coming to

00:24:25.294 --> 00:24:30.124
you, you will now also have a big
pool of money that you can use.

00:24:30.124 --> 00:24:33.574
You have the flexibility to use
that to do whatever, pay off your

00:24:33.724 --> 00:24:38.514
house or, buy a car, buy a boat,
or travel, or do whatever you want.

00:24:39.114 --> 00:24:43.144
You have this cash pull of money in
addition to your pensionable amount.

00:24:43.264 --> 00:24:48.284
So it's a cool way to, to create
some cash savings in the last few

00:24:48.284 --> 00:24:50.714
years leading up to retirement
if you don't already have those.

00:24:50.894 --> 00:24:52.724
Jon: Yeah, no, I think that's, well said.

00:24:52.724 --> 00:24:53.954
And a good cleanup on that.

00:24:53.954 --> 00:24:57.554
So who is, who is eligible
for a drop account?

00:24:57.554 --> 00:24:59.744
what does that look like
from a criteria standpoint?

00:25:00.014 --> 00:25:04.074
So in order to be eligible, you
must be, Have normal retirement.

00:25:04.074 --> 00:25:06.144
So at least 25 years of service and 55.

00:25:06.144 --> 00:25:09.964
So once again, rule of 80, basically
you have to hit the rule of 80, or

00:25:09.964 --> 00:25:14.044
you have to be eligible for vested
retirement, which is basically five to

00:25:14.044 --> 00:25:16.884
24 years of service and the age of, 55.

00:25:17.254 --> 00:25:21.809
and I honestly, we have a lot of members
that are in the drop currently, so I,

00:25:21.859 --> 00:25:25.369
Louie: I would say it's by far the
more popular option versus deferring

00:25:25.549 --> 00:25:26.479
Jon: Way more popular.

00:25:26.479 --> 00:25:29.179
So I don't know this, both of
these plans sound pretty great.

00:25:29.179 --> 00:25:30.469
Louie, can you do both?

00:25:30.739 --> 00:25:35.029
Can you be in the drop account
but also defer retirement?

00:25:35.119 --> 00:25:36.289
Is that something that you could do?

00:25:36.589 --> 00:25:39.579
Louie: No, the answer to that,
is no, you can't and they're,

00:25:39.579 --> 00:25:42.669
they're, that's basically because
they are the polar opposites.

00:25:42.669 --> 00:25:42.969
Right.

00:25:43.419 --> 00:25:47.019
Which leads to the question of, well
then how do I know which one I should

00:25:47.019 --> 00:25:48.449
do I, I get that question a lot.

00:25:48.449 --> 00:25:49.769
I don't know if you do, but I,

00:25:49.819 --> 00:25:50.214
Jon: a very

00:25:50.439 --> 00:25:52.299
Louie: come to you and
say, JB how do I know?

00:25:52.299 --> 00:25:55.719
what do I, what do I use to
determine whether or not I

00:25:55.719 --> 00:25:58.269
should defer or if I should drop?

00:25:58.269 --> 00:25:58.329
Yeah.

00:25:58.759 --> 00:26:00.799
and that's a hard question
to answer obviously, because

00:26:00.799 --> 00:26:02.119
it's very individualistic.

00:26:02.419 --> 00:26:05.179
but I always tell people, you
should consider a few different

00:26:05.179 --> 00:26:06.589
things when you're determining.

00:26:06.959 --> 00:26:10.559
Whether or not you should
drop or defer your retirement.

00:26:10.739 --> 00:26:13.559
Some of those things to
consider are how much cash and

00:26:13.559 --> 00:26:14.789
other investments do you have?

00:26:15.119 --> 00:26:20.129
If you have a really fat 4 57 and a
really fat IRA because you've been

00:26:20.129 --> 00:26:25.099
maxing those babies out, you might have
enough cash that you don't need to drop.

00:26:25.099 --> 00:26:26.779
You don't need to build that cash account.

00:26:27.029 --> 00:26:29.939
and instead you might wanna say,
well then I could live off of some

00:26:29.939 --> 00:26:34.919
of this, these 4 57 and IRA, this
IRA money and grow that pension.

00:26:34.919 --> 00:26:36.509
So in that case, you would defer.

00:26:37.109 --> 00:26:41.309
If you don't, if you, are late to
saving in your 4 57 and IRA and you

00:26:41.309 --> 00:26:45.809
don't have a lot of cash on hand or
a lot of investments, then maybe you

00:26:45.809 --> 00:26:51.329
should drop so that you can build up
that cash account, build up those cash

00:26:51.329 --> 00:26:55.009
equivalents, for when you retire, to
have that pool of money to draw from.

00:26:55.189 --> 00:26:56.449
So that's one thing to consider.

00:26:56.899 --> 00:27:01.169
I would say, also you need to know
how big your pensionable amount is.

00:27:01.169 --> 00:27:03.789
If you, if you're at 57.5%

00:27:03.819 --> 00:27:06.369
or 60% pension, is that enough?

00:27:06.369 --> 00:27:10.749
Are you comfortable with that being your
pension set when you enter the drop?

00:27:10.809 --> 00:27:15.369
Or would you rather defer and see
that amount grow by, like we said.

00:27:15.779 --> 00:27:17.759
Eight and a half, 9% a year.

00:27:18.099 --> 00:27:20.769
that's another thing to consider when
you're determining between those two.

00:27:21.039 --> 00:27:23.979
And then I would also say, and, and
this is a harder one to qualify,

00:27:23.979 --> 00:27:26.889
but I would say it's also important
to look at market conditions.

00:27:26.889 --> 00:27:30.899
And what I mean by that is let's say
you're retiring this year, or you

00:27:30.899 --> 00:27:34.599
are retiring, last year, since we
know what that market looked like,

00:27:34.959 --> 00:27:36.549
the market was at all time highs.

00:27:36.669 --> 00:27:41.469
So that would've been a good time to say,
Hey, I have a bunch of 4 57 and IRA money.

00:27:41.979 --> 00:27:45.399
I'm going to sell some of it and
live off of it for three years.

00:27:45.789 --> 00:27:48.099
and in that sense, I'm
selling high, which right.

00:27:48.099 --> 00:27:51.189
We always talk about buying low and
selling high in the investment community.

00:27:51.609 --> 00:27:55.359
Well, in that case, you would be
selling high and then you would be

00:27:55.359 --> 00:27:56.739
able to live off of some of that.

00:27:57.214 --> 00:28:02.404
Whatever, 4 57 IRA money and defer
your pension in order so that it can

00:28:02.404 --> 00:28:04.774
grow by that eight and a half or 9%.

00:28:05.324 --> 00:28:09.104
on the flip side of that coin, if
your, if the market is low, if you

00:28:09.104 --> 00:28:12.954
happen to retire at a time when the
market just, is in a recession, it

00:28:12.954 --> 00:28:15.834
just dumped, it took a 20% nosedive.

00:28:16.014 --> 00:28:19.434
Well, you don't, you might not wanna
sell, you might not wanna sell low.

00:28:19.614 --> 00:28:24.534
So in that case, maybe you should
take your pension and, keep that

00:28:24.924 --> 00:28:28.944
drop account or keep that, those
other investments invested so that

00:28:28.944 --> 00:28:32.684
you can wait till they recover and
they can come back from the lows.

00:28:32.984 --> 00:28:34.304
That's another thing to consider.

00:28:34.634 --> 00:28:36.944
and the truth is though, you don't
know what that's gonna be like

00:28:36.944 --> 00:28:38.474
until you're about to retire.

00:28:38.999 --> 00:28:39.509
Jon: You don't know.

00:28:39.509 --> 00:28:41.339
And that's actually a good framework.

00:28:41.339 --> 00:28:44.759
I've never really thought about it
through that lens, from like the market

00:28:44.759 --> 00:28:49.259
condition lens in, in choosing that
option or, or thought, thought experiment

00:28:49.259 --> 00:28:51.099
about, which one is a potential better.

00:28:51.349 --> 00:28:55.009
something to be mindful of as well
though once again, is as soon as you

00:28:55.009 --> 00:28:59.809
enter the drop, right, so the deferred
retirement option plan, you are now

00:28:59.809 --> 00:29:01.579
basically locking in that pension amount.

00:29:01.579 --> 00:29:04.579
And this is actually happening to
someone that we all know very well

00:29:04.579 --> 00:29:08.989
here, but, they are, they are in the
drop plan and now they're recently

00:29:08.989 --> 00:29:11.239
gonna get promoted to a chief, right?

00:29:11.239 --> 00:29:13.519
Which is a pretty big step up
in pay from what the captain

00:29:13.519 --> 00:29:14.899
level is here at West Metro.

00:29:15.619 --> 00:29:18.569
That money is not, they're not
gonna get that pensionable amount

00:29:18.569 --> 00:29:21.449
of money becoming a chief now 'cause
it's your three highest years.

00:29:21.869 --> 00:29:22.289
Right?

00:29:22.289 --> 00:29:25.199
So now you'll continue to get that
money as far as what the regular

00:29:25.199 --> 00:29:29.609
salary is, but all the additional
benefit of that, of having, the pension

00:29:29.609 --> 00:29:33.329
plan, like you're capped out at what
that, what that captain's wages were.

00:29:33.329 --> 00:29:37.549
So if you're on one of those, fences where
you're like looking to promote within the

00:29:37.549 --> 00:29:41.029
last couple of years and you want to time
it to where you basically, you just wanna,

00:29:41.029 --> 00:29:44.089
be a captain or a chief for the last three
years, you want your three highest years.

00:29:44.449 --> 00:29:47.329
That is definitely something to be
mindful of because that will change

00:29:47.329 --> 00:29:50.584
the math as far as what you're
defined benefit is gonna look like.

00:29:50.584 --> 00:29:53.839
Because once you enter the trop, I,
hopefully Lou and I have explained it

00:29:53.839 --> 00:29:56.719
well enough, you're locking in what
your pensionable amount is gonna be.

00:29:57.019 --> 00:29:59.449
That is not, that is not gonna
change, that is set in stone as

00:29:59.449 --> 00:30:00.709
far as what your percentage is.

00:30:00.709 --> 00:30:02.509
So, and it's gonna be off of that.

00:30:02.509 --> 00:30:05.599
'cause now you are retired
and it's not on what is.

00:30:05.939 --> 00:30:08.789
Even though you're working, they
don't calculate those salary years

00:30:08.789 --> 00:30:10.139
anymore as part of the pension.

00:30:10.139 --> 00:30:13.579
So a lot of, a lot of nuances
with a lot of these things.

00:30:13.579 --> 00:30:16.909
So we never say always,
and we never say never.

00:30:17.099 --> 00:30:20.579
and our favorite word is it depends,
but I think Louis gave a really good

00:30:20.579 --> 00:30:24.019
framework on potentially thinking
whether or not, the deferred

00:30:24.019 --> 00:30:27.349
retirement is your better option or
the drop plan is your better option.

00:30:27.599 --> 00:30:29.639
honestly, some of it comes down to age.

00:30:29.829 --> 00:30:33.369
if you're a younger person and got hired
younger and you can get to that rule of

00:30:33.369 --> 00:30:37.059
80 pretty quickly, the drop plan might not
be a bad idea 'cause you're still gonna

00:30:37.059 --> 00:30:39.339
get outta here at a relatively young age.

00:30:39.579 --> 00:30:42.489
Versus if you're not and you're
going to deferred retirement and

00:30:42.489 --> 00:30:45.549
you get, and you're, you're a little
bit older, like that just changes.

00:30:45.549 --> 00:30:48.519
And a lot of this too is
we're talking about it from.

00:30:48.749 --> 00:30:52.109
Just our perspective from the
firefighter, you have to account for

00:30:52.109 --> 00:30:53.519
what your family status looks like.

00:30:53.519 --> 00:30:56.909
And if you're married, what that looks
like if your spouse is employed, what

00:30:56.909 --> 00:31:00.179
their career trajectory looks like,
what kind of resources they have.

00:31:00.179 --> 00:31:03.539
that's why it's a, a
more complex situation.

00:31:03.629 --> 00:31:07.699
And I wouldn't even say problem, just,
any type of, financial thought should

00:31:07.699 --> 00:31:11.419
have a holistic approach and not
just try to look at one thing and oh,

00:31:11.509 --> 00:31:12.859
on paper this makes the most sense.

00:31:12.859 --> 00:31:15.769
'cause there's a lot of
dominoes that come into effect

00:31:16.054 --> 00:31:16.564
Louie: For sure.

00:31:16.909 --> 00:31:17.599
Jon: But it's good.

00:31:17.599 --> 00:31:21.079
So it's nice that we have that option
and that they've enhanced that.

00:31:21.079 --> 00:31:22.909
'cause that has not always been an option.

00:31:23.219 --> 00:31:26.249
and the fact that it's up to five
years is actually pretty generous.

00:31:26.249 --> 00:31:28.259
I've seen other plans
where it's three years.

00:31:28.509 --> 00:31:30.669
so that five year
runway, you can actually.

00:31:31.179 --> 00:31:33.219
You can save up quite a bit
of cash in that account.

00:31:33.459 --> 00:31:34.599
Actually a lot of money.

00:31:34.659 --> 00:31:36.729
And there's people that will
leave here being like, man, I

00:31:36.729 --> 00:31:39.579
never thought I would have that
much money after just five years.

00:31:39.579 --> 00:31:43.009
But it's basically 'cause you're with
foregoing your your pension payments

00:31:43.159 --> 00:31:44.689
'cause it's been going into this account.

00:31:44.689 --> 00:31:46.319
So, just like with anything else.

00:31:46.319 --> 00:31:49.169
So just be mindful of that and how
you're investing that money into

00:31:49.169 --> 00:31:51.079
that, into that self-directed fund.

00:31:51.169 --> 00:31:54.829
I would just say holistically probably
not being super aggressive because

00:31:55.309 --> 00:31:56.779
you're only five years out, man.

00:31:56.779 --> 00:32:00.109
And if you were planning on using that
money anytime soon, I would say being

00:32:00.109 --> 00:32:04.369
a hundred percent in equities, like
that's pretty risky at that standpoint.

00:32:04.369 --> 00:32:06.889
Like you could potentially have a lot
of money, but you could potentially.

00:32:07.534 --> 00:32:08.494
Not have a lot of money.

00:32:08.494 --> 00:32:12.914
So always, always be, cognizant and,
what that looks like from a, from,

00:32:12.984 --> 00:32:14.934
An asset allocation standpoint.

00:32:14.934 --> 00:32:18.924
So that is deferred retirement
and that is, the drop plan.

00:32:18.924 --> 00:32:22.674
So two of the most common things that we
get asked about, 'cause they're similar,

00:32:22.824 --> 00:32:26.724
but obviously they're different, and who
does it make, the most sense for when you

00:32:26.724 --> 00:32:28.694
should start to, start to consider that.

00:32:28.994 --> 00:32:31.764
So now we've looked at it through
the framework of okay, so we're just

00:32:31.764 --> 00:32:35.484
talking about us, the member, and the
benefits that potentially we could get.

00:32:35.994 --> 00:32:40.014
Now we have to think about our family
situation and what does that look like,

00:32:40.014 --> 00:32:44.664
So what's really cool about our pension
plan is, is there are survivorship and

00:32:44.664 --> 00:32:48.104
once again, statistically speaking,
it's more likely, the fire service is

00:32:48.104 --> 00:32:50.114
male dominated, and males don't have.

00:32:50.599 --> 00:32:54.349
Statistically speaking as
much longevity as females do.

00:32:54.649 --> 00:32:58.819
So as you're thinking about this, like
the survivorship benefit is all about

00:32:58.909 --> 00:33:01.789
once you pass away, what is your survivor?

00:33:01.789 --> 00:33:04.639
Who you designate as your
beneficiary to be your survivor?

00:33:04.869 --> 00:33:06.879
what benefit potentially
are they gonna get?

00:33:06.879 --> 00:33:08.860
So there's several different
options with the that.

00:33:09.289 --> 00:33:13.879
so first and foremost, if you are not
married or you do not have a spouse, or

00:33:13.879 --> 00:33:17.149
you do not have someone that you wanted to
designate as a beneficiary, you can just

00:33:17.149 --> 00:33:20.119
take the regular full amount, if you will,

00:33:20.174 --> 00:33:20.984
Louie: The single life

00:33:21.244 --> 00:33:22.144
Jon: The single life benefit.

00:33:22.429 --> 00:33:22.789
Yep.

00:33:22.789 --> 00:33:25.269
So, and that will obviously
be the highest amount.

00:33:25.329 --> 00:33:29.109
'cause once again, from an actuarial
standpoint, it's very easy to calculate

00:33:29.109 --> 00:33:31.239
that just based on one life expectancy.

00:33:31.569 --> 00:33:34.749
It gets a little bit more complex
when you start looking at,

00:33:34.779 --> 00:33:36.549
potential other life expectancies.

00:33:36.549 --> 00:33:39.849
And that would be whatever your
designated beneficiary are.

00:33:40.129 --> 00:33:41.809
so that is just the single life benefit.

00:33:41.809 --> 00:33:44.209
So when you look on the
little brochure chart.

00:33:44.209 --> 00:33:45.869
Right, and you calculate what it is.

00:33:46.229 --> 00:33:48.689
So once again, we will,
we'll make math very simple.

00:33:48.689 --> 00:33:53.609
We'll say that we have a 55-year-old
person who has got, 30 years of service.

00:33:53.829 --> 00:33:56.649
they are going to get
70% of their benefit.

00:33:56.959 --> 00:33:58.039
and we'll make it very easy.

00:33:58.039 --> 00:34:00.409
We'll say the three
highest years we're 70,000.

00:34:00.739 --> 00:34:02.689
That is what the single life benefit is.

00:34:02.689 --> 00:34:06.049
It's gonna be $70,000 and
you just divide that by 12.

00:34:06.049 --> 00:34:08.059
Your monthly benefit, that's
the check you're gonna get.

00:34:08.419 --> 00:34:10.399
That's if you have no
survivorship options.

00:34:10.609 --> 00:34:12.229
That's how that benefit chart reads.

00:34:12.589 --> 00:34:15.289
When you look into the
survivorship features, then

00:34:15.289 --> 00:34:18.679
there is different multipliers
based on what option you choose.

00:34:18.679 --> 00:34:23.719
And that will, that will reduce what
your pension amount is gonna be.

00:34:24.319 --> 00:34:28.159
And obviously the higher you go
percentage wise, the more that

00:34:28.159 --> 00:34:30.139
multiplier is gonna take effect.

00:34:30.139 --> 00:34:32.599
So the different, we'll just
say right now, the different

00:34:32.599 --> 00:34:35.019
survivorship options is 100%.

00:34:35.249 --> 00:34:39.209
So your designated beneficiary would
continue to get whatever pension

00:34:39.209 --> 00:34:42.899
amount you have for the rest of not
only your life, but also their life.

00:34:43.319 --> 00:34:46.949
There's a new benefit that just got
instituted this January, that's the

00:34:46.949 --> 00:34:53.109
75% survivorship option, and then
there is the 50%, survivorship option.

00:34:53.109 --> 00:34:55.809
You wanna speak a little bit more
on both of those breakdowns of that

00:34:56.209 --> 00:34:58.919
Louie: So on, on, John said it right
with the a hundred, with a hundred

00:34:58.919 --> 00:35:03.219
percent option, your, spouse would
get, or your beneficiary, generally

00:35:03.219 --> 00:35:08.009
spouse, would get a hundred percent
of your benefit upon your, death.

00:35:08.529 --> 00:35:11.379
which is great if you're
worried about your spouse's

00:35:11.379 --> 00:35:13.719
financial security after you die.

00:35:14.429 --> 00:35:19.259
similarly, the 75% option would
give your spouse 75% of your

00:35:19.289 --> 00:35:21.999
pensionable amount, upon your death.

00:35:22.509 --> 00:35:27.069
And then the 50% option would give
the spouse 50% upon your death.

00:35:27.459 --> 00:35:31.499
And the, the, the thing that
you're given up is, a certain

00:35:31.499 --> 00:35:33.089
portion of your pensionable amount.

00:35:33.089 --> 00:35:35.579
So we talked about determining
your pensionable amount.

00:35:35.579 --> 00:35:38.729
If you didn't have a sur, if you
didn't have any survivorship options,

00:35:38.729 --> 00:35:42.689
you would get a hundred percent of
that pensionable amount if you chose.

00:35:42.839 --> 00:35:43.979
Once again, just making it simple.

00:35:43.979 --> 00:35:45.389
Let's say you retired at 55.

00:35:45.419 --> 00:35:49.409
Let's say your your spouse is also 55,
'cause it matters on their age as well.

00:35:49.869 --> 00:35:51.159
but let's say you're 55.

00:35:51.819 --> 00:35:53.079
And your spouse is 55.

00:35:53.079 --> 00:35:54.369
You guys were the, the same age.

00:35:54.369 --> 00:35:55.359
Were high school sweethearts,

00:35:55.389 --> 00:35:55.904
Jon: There you go.

00:35:56.084 --> 00:35:56.504
Mm-hmm.

00:35:56.679 --> 00:36:01.569
Louie: So if you wanted to give your
spouse a 100% survivorship benefit,

00:36:01.569 --> 00:36:06.879
meaning you die, and he or she gets
the full a hundred percent survivorship

00:36:06.879 --> 00:36:12.489
benefit, you would have to take a
10% haircut, just a, just about a 10%

00:36:12.564 --> 00:36:13.164
Jon: the multiplier.

00:36:13.204 --> 00:36:13.484
Louie: Mm-hmm.

00:36:13.599 --> 00:36:14.349
With a multiplier.

00:36:14.349 --> 00:36:17.439
So they would take your pensionable
amount and then they would

00:36:17.439 --> 00:36:20.679
say, you get 90% of that and.

00:36:21.009 --> 00:36:25.599
In return for giving up 10%, your
spouse gets that new a hundred

00:36:25.599 --> 00:36:30.009
percent amount after you pass
away, which is a great option.

00:36:30.339 --> 00:36:35.739
The 75% option, let's say once again
55, you both are 55 and you want her

00:36:35.739 --> 00:36:42.419
to her or him to receive, 75% of your
pensionable amount upon your death, you

00:36:42.419 --> 00:36:45.749
would be given up about 8%, of your.

00:36:46.244 --> 00:36:47.234
Pensionable amount.

00:36:47.574 --> 00:36:50.004
and then 50% it would be less than that.

00:36:50.004 --> 00:36:54.894
So at a 50% rate it'd be about
5% or four point a half percent.

00:36:55.254 --> 00:36:57.784
So those are just some,
just some quick ways.

00:36:57.784 --> 00:37:01.614
And it, like I said, it depends on
the, age that you are when you retire.

00:37:01.614 --> 00:37:05.304
It depends on your spouse's age, and
then it depends on the amount that

00:37:05.304 --> 00:37:06.804
you want your spouse to receive.

00:37:07.074 --> 00:37:09.414
So those are just some options
to be able to take care of

00:37:09.414 --> 00:37:12.564
your spouse upon your death.

00:37:13.479 --> 00:37:13.779
Jon: Yeah.

00:37:13.779 --> 00:37:17.049
And that's, something to really
seriously consider when you're

00:37:17.049 --> 00:37:18.429
thinking about these elections.

00:37:18.429 --> 00:37:21.699
'cause once again, this is not something
that you can elect after the fact.

00:37:22.029 --> 00:37:25.419
You can't be like, man, I've been
in the plan for 15 years and man,

00:37:25.419 --> 00:37:27.789
it's been a good ride, but I feel
like I'm gonna tap out pretty soon.

00:37:27.789 --> 00:37:30.399
And now my spouse is 10 years
younger than me, so I wanna make,

00:37:30.429 --> 00:37:31.389
I wanna do the a hundred percent.

00:37:31.389 --> 00:37:34.819
And it doesn't work that way when
you, when you make this election,

00:37:34.819 --> 00:37:38.119
it's, it's irrevocable and it's
a, it's a one-time election.

00:37:38.119 --> 00:37:40.669
So just be very thoughtful
when you're going through this.

00:37:40.669 --> 00:37:44.759
And I would strongly, strongly advise,
when you're making these decisions, to

00:37:44.759 --> 00:37:49.019
have as much information as you can in
totality, holistically thinking about

00:37:49.019 --> 00:37:52.859
all the assets that you have, all your
potential liabilities, all the things

00:37:52.859 --> 00:37:54.269
that make up your financial life.

00:37:54.539 --> 00:37:57.979
Like you wanna have all those things,
considered before making any one of these.

00:37:57.979 --> 00:38:01.159
'cause depending on where you're
at in life, it can really change.

00:38:01.409 --> 00:38:02.969
and especially there's, I've noticed.

00:38:03.299 --> 00:38:08.059
I wouldn't say recently, but there's,
some more of a, separation in spouse's

00:38:08.059 --> 00:38:09.959
age, here at the fire department.

00:38:09.959 --> 00:38:13.679
And I think a lot of that is, some of it
is because of divorce, quite frankly, and

00:38:13.679 --> 00:38:16.739
the second marriages or third marriages,
and there's a wide variety of different

00:38:16.739 --> 00:38:18.149
age banding that goes around there.

00:38:18.149 --> 00:38:22.229
So be very thoughtful and considerate
when making the survivorship,

00:38:22.509 --> 00:38:23.859
decision because it's a big one,

00:38:23.859 --> 00:38:27.459
Obviously you care about your family
and, and who's going to get the, your

00:38:27.459 --> 00:38:28.989
benefit, your heart earned benefit.

00:38:29.179 --> 00:38:31.069
but just this should not be made in haste.

00:38:31.099 --> 00:38:32.869
I would just, I can't encourage that nev.

00:38:33.439 --> 00:38:36.859
Louie: I, and I, I would say there's also,
if you, if you look through the, the,

00:38:36.929 --> 00:38:42.199
pension brochure that we linked to on our
Instagram pages, there's some other, more

00:38:42.229 --> 00:38:47.149
nuanced options that you have, like pop-up
provisions and last survivor benefits.

00:38:47.149 --> 00:38:49.369
And we don't have to go into
detail about a lot of those.

00:38:49.699 --> 00:38:52.789
Just know that there are just some
options that your pension will give

00:38:52.789 --> 00:38:53.989
you that the plan will give you.

00:38:54.299 --> 00:38:57.329
and you pay for those by taking
a reduced pension amount.

00:38:57.329 --> 00:38:58.829
I think that's the easiest way to say it.

00:38:59.189 --> 00:39:02.069
And John, I don't know how you
look at it, but I, for me, I look

00:39:02.069 --> 00:39:03.209
at these options as insurance

00:39:03.599 --> 00:39:04.589
Jon: That's, that's all it is.

00:39:04.589 --> 00:39:05.879
It's an insurance contract.

00:39:05.879 --> 00:39:06.809
That's what this is.

00:39:06.809 --> 00:39:09.329
I mean, every annuity has
the exact same things.

00:39:09.599 --> 00:39:12.849
There's different survivorship options,
there's different percentages and

00:39:12.849 --> 00:39:14.199
popup and all these other things.

00:39:14.199 --> 00:39:15.579
But that's basically all it is.

00:39:15.579 --> 00:39:18.699
And once again, some very
smart mathematical people

00:39:18.699 --> 00:39:20.379
figure out the, the risks.

00:39:20.409 --> 00:39:21.129
'cause that's what it is.

00:39:21.129 --> 00:39:21.489
It's risk,

00:39:21.799 --> 00:39:22.689
Louie: actuarial risks.

00:39:22.749 --> 00:39:22.969
Yep.

00:39:23.079 --> 00:39:24.549
Jon: And that's all
they're doing with this.

00:39:24.549 --> 00:39:27.939
And each one of those multipliers
is the mathematicians basically

00:39:27.939 --> 00:39:31.509
figuring out what's the risk that
the plan is taking by doing this.

00:39:31.509 --> 00:39:31.569
Yeah.

00:39:32.049 --> 00:39:32.814
That's as simple.

00:39:32.814 --> 00:39:34.269
And I think that's a good way to frame it.

00:39:34.269 --> 00:39:35.439
It, but it is insurance.

00:39:35.439 --> 00:39:37.209
It's insurance for those
that you care about.

00:39:37.479 --> 00:39:38.739
'cause you won't care 'cause you going.

00:39:38.739 --> 00:39:38.829
Yep.

00:39:39.189 --> 00:39:42.849
But for everyone else left behind, like
what kinda legacy or what, how do you

00:39:42.849 --> 00:39:45.349
want to set them up and, we can't add any.

00:39:45.459 --> 00:39:48.339
We can't at any point begin to say
one is more favorable than the other.

00:39:48.339 --> 00:39:51.999
'cause this is truly very specific
based on your circumstances.

00:39:52.069 --> 00:39:55.609
Louie: And I'm by no means am an
expert in the, in on insurance

00:39:55.609 --> 00:39:58.339
premiums and what that would look
like to do an annuity like that.

00:39:58.364 --> 00:40:01.759
I, I haven't looked at it enough, but I
could tell you that when I'm approaching

00:40:01.759 --> 00:40:07.039
retirement, I am absolutely going to
consider taking one of these options, one

00:40:07.039 --> 00:40:11.149
of these survivors benefit options, just
because I want to take care of Kaitlyn,

00:40:11.219 --> 00:40:13.469
in the event of my untimely passing.

00:40:13.469 --> 00:40:17.439
If I retire, if I retire at 55
and die at 58, I've, I've worked

00:40:17.439 --> 00:40:19.779
hard for that pension and I
wanna make sure that she gets.

00:40:20.054 --> 00:40:20.954
Some portion of it.

00:40:20.954 --> 00:40:24.764
I don't know if it's 50% or a hundred
percent, but I think I'm willing to take

00:40:24.764 --> 00:40:30.204
the haircut, during my lifetime in order
to make sure that she has a pension,

00:40:30.354 --> 00:40:32.364
my pension for the rest of her life.

00:40:32.364 --> 00:40:34.794
So that 75% option that they just came

00:40:34.839 --> 00:40:34.899
Jon: out.

00:40:34.899 --> 00:40:34.959
Yeah.

00:40:34.959 --> 00:40:35.979
It's very interesting.

00:40:35.979 --> 00:40:36.219
Yep.

00:40:36.279 --> 00:40:36.579
Mm-hmm.

00:40:36.774 --> 00:40:39.084
Louie: looking option and I'm
really looking hard at that.

00:40:39.454 --> 00:40:42.764
and gravitating towards that, I was
really thinking about the 50%, just

00:40:42.764 --> 00:40:46.784
because I, I feel like the, the,
whatever I said, the seven or 8%

00:40:47.114 --> 00:40:49.094
haircut I would take would be worth it.

00:40:49.314 --> 00:40:52.734
and it's even less with the
75% option that they have.

00:40:52.734 --> 00:40:55.974
So I'm gonna look at those when I'm
there, just because I've worked hard for

00:40:55.974 --> 00:41:00.264
this pension and I want, I want her to
collect on it in the event that I diary.

00:41:00.354 --> 00:41:01.224
Hopefully that doesn't happen.

00:41:01.224 --> 00:41:04.194
Hopefully we both live 25 years
after retirement and we can

00:41:04.194 --> 00:41:05.544
both keep taking that pension.

00:41:05.544 --> 00:41:09.564
But I just like being able to pay for
that insurance option and kind of make

00:41:09.564 --> 00:41:12.234
sure that she's taken care of in the
event that something happens to me.

00:41:12.444 --> 00:41:12.834
Yeah.

00:41:12.859 --> 00:41:15.559
Jon: And you should look at it
through both lenses, so not only

00:41:15.559 --> 00:41:19.399
your potential longevity, but also
your spouse's potential longevity.

00:41:19.399 --> 00:41:22.829
And if those things are well
aligned, and you guys are both

00:41:22.829 --> 00:41:23.999
the same age and you both.

00:41:24.359 --> 00:41:26.849
Tend to, expire at the same
time, then this changes.

00:41:26.849 --> 00:41:30.319
But if, if your spouse has, all of
their, people in their family live

00:41:30.319 --> 00:41:34.249
to a hundred and you tap out at 70,
just that's something to be mindful

00:41:34.249 --> 00:41:37.669
of, of really trying to set them
up for, for a long-term success.

00:41:37.859 --> 00:41:41.309
so that's basically what the
survivor benefits are all about.

00:41:41.309 --> 00:41:46.599
So, read through the brochure, but really
before making any decisions, really have

00:41:46.599 --> 00:41:51.099
a good plan moving forward on why you're
selecting what you're selecting and what

00:41:51.099 --> 00:41:53.259
the, what the ramifications for those are.

00:41:53.719 --> 00:41:57.829
last but not least, in wrapping
up just some of the, the nuances

00:41:57.829 --> 00:41:59.239
within our pension plan, and I hope.

00:41:59.449 --> 00:42:03.169
What people realize is that
this is a pretty robust plan.

00:42:03.419 --> 00:42:07.319
there's been a lot of enhancements
that have happened over several years

00:42:07.319 --> 00:42:10.589
for our pension plan, and not only
making it, it's, I mean, it's shored

00:42:10.589 --> 00:42:14.039
up from a funding status, but all these
other things, like it's pretty nice

00:42:14.039 --> 00:42:15.389
that you've got all these options.

00:42:15.389 --> 00:42:15.959
Sometimes it's.

00:42:15.989 --> 00:42:17.129
Maybe too many options.

00:42:17.429 --> 00:42:17.669
Louie: right?

00:42:17.714 --> 00:42:18.324
It's overwhelming.

00:42:18.544 --> 00:42:19.244
It overwhelms

00:42:19.319 --> 00:42:21.509
Jon: people and they're like, oh my
God, this is a lot of math, these

00:42:21.509 --> 00:42:23.069
multipliers, all these other things.

00:42:23.069 --> 00:42:26.099
But I mean, at the end of the day,
I think that's what the, what the

00:42:26.099 --> 00:42:29.549
plan is trying to do is just give
you optionality and just seeing what

00:42:29.549 --> 00:42:31.229
makes the most sense for you guys.

00:42:31.229 --> 00:42:34.769
So one of the things, and we talked
about this briefly, I think maybe

00:42:34.769 --> 00:42:38.729
in one of the listener questions,
was about purchasing service credit.

00:42:39.089 --> 00:42:41.849
This is something Louis and I always
give this presentation, to the

00:42:41.849 --> 00:42:45.359
recruits as they're getting ready to
hit the line on just, fi financial

00:42:45.419 --> 00:42:48.509
independence and just raising some
awareness with some financial literacy.

00:42:48.569 --> 00:42:52.259
And we have a lot of people that did
a job before they came here, and they

00:42:52.259 --> 00:42:56.759
have either money in a 401k or they had
public service credit because they worked,

00:42:56.949 --> 00:42:59.949
as a police officer, as a firefighter
in the military, something like that.

00:42:59.949 --> 00:43:01.269
And they're always like,
well, I've got this.

00:43:01.319 --> 00:43:02.009
what should I do?

00:43:02.009 --> 00:43:04.079
Should I buy service credit?

00:43:04.079 --> 00:43:06.179
And this is one that we, we get asked a

00:43:06.344 --> 00:43:06.794
Louie: a lot.

00:43:06.794 --> 00:43:06.796
A lot.

00:43:06.854 --> 00:43:07.124
Yep.

00:43:07.244 --> 00:43:07.664
A lot.

00:43:07.964 --> 00:43:10.364
Jon: What's your, what's your
initial thoughts when, when

00:43:10.364 --> 00:43:11.474
people come to you with that?

00:43:11.699 --> 00:43:12.239
It depends.

00:43:12.489 --> 00:43:13.844
Louie: It of course, of course.

00:43:13.844 --> 00:43:16.364
As always, I know you guys are rolling
your eyes every time we say that.

00:43:16.454 --> 00:43:20.134
And, the reason, the reason why it's
particularly true in this situation

00:43:20.134 --> 00:43:25.274
is because there are different,
different timelines that you have to

00:43:25.274 --> 00:43:27.074
follow to purchase service credit.

00:43:27.414 --> 00:43:28.854
sometimes they make you wait a year.

00:43:29.104 --> 00:43:33.514
if you have public employment time
in which you served in a public

00:43:33.544 --> 00:43:37.984
employment capacity, but were not
eligible for a retirement benefit.

00:43:38.444 --> 00:43:42.844
or if you were a former military,
service member, you can purchase up to

00:43:42.844 --> 00:43:46.024
five years of service credit for that.

00:43:46.084 --> 00:43:46.894
If you did not.

00:43:47.479 --> 00:43:48.709
Contribute to, us

00:43:49.384 --> 00:43:49.984
Jon: Erra

00:43:50.299 --> 00:43:52.759
Louie: and I, I don't know,
I'm, I'm over my skis here.

00:43:52.759 --> 00:43:56.119
I, I don't know all of those ins
and outs and how someone would

00:43:56.119 --> 00:43:57.559
qualify for that and not the other.

00:43:58.079 --> 00:44:01.649
so that's why, when we say it depends,
it really depends on this situation.

00:44:02.019 --> 00:44:04.839
but there are options to
purchase service credit.

00:44:05.179 --> 00:44:07.399
and they, they, they charge you cash.

00:44:07.399 --> 00:44:10.339
They make you pay cash in order
to buy this service credit.

00:44:10.459 --> 00:44:13.759
And so when we get asked that question
is, Hey, should I buy service credit?

00:44:13.999 --> 00:44:17.569
Man, that's a, that's a hard thing to
a, to, to answer because we want to

00:44:17.569 --> 00:44:21.409
know, well, how, how long do you plan on
being here and when do you wanna retire?

00:44:21.769 --> 00:44:26.069
And do you need those service credits,
in order to be able to hit your rule

00:44:26.069 --> 00:44:27.869
of 80 and to receive a full benefit?

00:44:27.869 --> 00:44:29.189
It all depends on things like that.

00:44:29.819 --> 00:44:33.269
And then the other thing it depends
on is, well, how well do you think you

00:44:33.269 --> 00:44:37.949
would do if you, instead of purchasing
service credit, invested that into a 4

00:44:37.949 --> 00:44:43.649
57 or, or Roth IRA and I'll, I'll just
say this, and this is very general advice

00:44:43.649 --> 00:44:45.899
because I know that's what people are
looking for, is like, Hey, just gimme

00:44:45.899 --> 00:44:47.099
an idea of what to think about it.

00:44:47.099 --> 00:44:50.949
I, I've told people, look, I,
I'm not a big fan of putting

00:44:50.949 --> 00:44:51.999
your eggs in one basket.

00:44:52.029 --> 00:44:52.089
Yeah.

00:44:52.299 --> 00:44:55.089
And if you're saying,
Hey, I can, I can either.

00:44:55.509 --> 00:44:58.479
Purchase service credit or
I can contribute to a 4 57.

00:44:58.779 --> 00:45:03.949
My gut would just tell me, contribute
to the 4 57 because, if you invest

00:45:03.949 --> 00:45:08.269
that well, you can earn somewhere
between eight and 10% on average,

00:45:08.489 --> 00:45:10.469
throughout the long term of your career.

00:45:10.799 --> 00:45:14.699
And I like spreading out that risk and
not just putting it all with a pension.

00:45:14.729 --> 00:45:19.199
So I default to telling people, let's
not talk about purchasing service

00:45:19.199 --> 00:45:23.459
credit unless you are maxing out your
4 57 and your Roth IRA and you're

00:45:23.459 --> 00:45:24.989
still looking for ways to save.

00:45:24.989 --> 00:45:28.829
If that's the case, then yes, purchasing
service credit is a great option.

00:45:29.059 --> 00:45:31.699
and, and the truth is it might be a
good option for you even if you're

00:45:31.699 --> 00:45:33.919
not maxing out your 4 57 and Roth IRA.

00:45:33.949 --> 00:45:37.879
I just feel like those are really,
really good plans that we have.

00:45:37.879 --> 00:45:40.789
The 4 57 and the IRA
and you should consider.

00:45:41.224 --> 00:45:42.904
starting to fill those buckets up Yeah.

00:45:42.934 --> 00:45:45.094
Before we start purchasing service credit.

00:45:45.184 --> 00:45:47.104
I don't know if you agree with that,
John, but that's what I've been

00:45:47.104 --> 00:45:50.494
telling people because I feel like
you're, you're probably not gonna

00:45:50.494 --> 00:45:52.204
regret putting money into a 4 57.

00:45:52.234 --> 00:45:55.414
I don't think you're gonna be like, oh
man, I wish I didn't have this 4 57 money.

00:45:55.414 --> 00:45:57.964
I wish I would've instead
bought service credit.

00:45:57.964 --> 00:45:58.024
Yeah.

00:45:58.039 --> 00:45:58.429
Jon: Yeah.

00:45:58.969 --> 00:46:00.469
I think that's a good way to.

00:46:00.889 --> 00:46:03.079
Like logically frame
it and think about it.

00:46:03.129 --> 00:46:06.919
I, I tend to lean to, honestly a
strong indication, whether it's public

00:46:06.919 --> 00:46:10.639
service credit or private service
credit, because once again, Louis

00:46:10.639 --> 00:46:11.869
said there's, there's some nuances.

00:46:11.869 --> 00:46:16.189
So after one year, which typically for
most people in this region, you're still

00:46:16.189 --> 00:46:17.959
not out at your first grade salary.

00:46:17.959 --> 00:46:21.589
So you're at a lower, you're buying in at
lower rates as far as what it's gonna cost

00:46:21.589 --> 00:46:23.059
you to purchase those service credits.

00:46:23.299 --> 00:46:26.289
So after, if you're purchasing
public service credit, you

00:46:26.289 --> 00:46:27.219
only have to wait one year.

00:46:27.219 --> 00:46:27.999
After one year.

00:46:28.149 --> 00:46:29.679
If you've got the money,
that's the time to do it.

00:46:29.679 --> 00:46:32.949
Don't wait because it's just
gonna cost you more because your

00:46:32.949 --> 00:46:35.499
salary has gone up and you're
gonna be paying at a higher rate.

00:46:35.889 --> 00:46:37.539
Private is man private.

00:46:37.584 --> 00:46:41.374
For me, most times is almost like
a non non-starter because now

00:46:41.374 --> 00:46:42.574
you've had to wait five years.

00:46:42.934 --> 00:46:46.264
Everyone in the region, you are
now at a first grade firefighter,

00:46:46.264 --> 00:46:49.354
which is where you peak out at minus
longevity and some other stuff.

00:46:49.354 --> 00:46:53.104
So it's gonna cost you a lot
more to buy into that plan.

00:46:53.384 --> 00:46:57.344
and I totally agree with Louis as
far as risk pooling and diversifying.

00:46:58.064 --> 00:47:01.064
I have been trained to think
about, not the worst case scenario,

00:47:01.064 --> 00:47:02.624
but all the potential what ifs.

00:47:03.044 --> 00:47:06.794
And I always go to someone and be like,
okay, what if you had whatever, we'll

00:47:06.794 --> 00:47:09.644
just call it $150,000 in this 401k.

00:47:09.644 --> 00:47:13.424
'cause you go, you worked at some bank
for a while and then after five years

00:47:13.424 --> 00:47:17.684
like that money has now grown to 200
grand and you're able to buy five years.

00:47:17.954 --> 00:47:18.464
That's awesome.

00:47:18.464 --> 00:47:18.674
Right?

00:47:18.674 --> 00:47:21.074
So you've been on the job for
five years and you're gonna buy

00:47:21.074 --> 00:47:22.454
five years of service credit.

00:47:22.454 --> 00:47:24.344
So basically you're in it for 10 years.

00:47:24.724 --> 00:47:26.464
what happens if something happens?

00:47:26.464 --> 00:47:28.984
You either get a disability or
something happens where you can't

00:47:28.984 --> 00:47:33.454
work here and now all that money is
locked up into a defined benefit plan.

00:47:33.784 --> 00:47:34.834
Like honestly.

00:47:34.854 --> 00:47:36.564
10 years here is not great.

00:47:36.594 --> 00:47:40.204
Like the defined benefit with the
miracle of what it is and why it is

00:47:40.204 --> 00:47:43.984
really effective and who it's really
designed for is those people that

00:47:43.984 --> 00:47:47.974
can get to that rule of 80, they
can get in 25, 30 even more years.

00:47:48.184 --> 00:47:51.814
That's really where you start to get a
lot more benefit or bang for your buck.

00:47:52.124 --> 00:47:54.944
so that's just one where I'm
just always very hesitant.

00:47:55.184 --> 00:47:58.754
Now if they wanna buy a year or two
and it just makes them more at ease

00:47:58.754 --> 00:48:01.644
or they've got a plan of they want to
retire at a certain age and they seem

00:48:01.644 --> 00:48:02.634
like they're gonna carry that out.

00:48:02.684 --> 00:48:03.644
there is options.

00:48:03.644 --> 00:48:05.324
And for some people it is good options.

00:48:05.324 --> 00:48:08.714
the thing I don't like about it is you're
taking a lot of risk at the beginning.

00:48:08.744 --> 00:48:10.844
You're assuming that you're
gonna be here for a long time.

00:48:10.844 --> 00:48:13.874
You're assuming that you're gonna love
this job, you're assuming a lot of things.

00:48:14.294 --> 00:48:18.524
And when you're 25 or 30 man, there's a
whole lot of life ahead of you and you

00:48:18.524 --> 00:48:20.084
just don't know what that's gonna mean.

00:48:20.084 --> 00:48:23.564
And I just don't wanna see our folks
get of their financial assets locked

00:48:23.564 --> 00:48:26.014
up in one plan, in one pension.

00:48:26.134 --> 00:48:28.674
And that's just how I
tended to Think of things.

00:48:28.674 --> 00:48:32.014
So I don't want to poo poo this and I hope
that's not what you guys are receiving.

00:48:32.014 --> 00:48:34.024
Like Louis and I are
completely against this.

00:48:34.474 --> 00:48:37.444
I just think it's not as easy as
oh, I've got some money in my 401k,

00:48:37.444 --> 00:48:38.554
I'm just gonna buy some years.

00:48:38.824 --> 00:48:41.464
think about what that money is and
how potentially you could invest

00:48:41.464 --> 00:48:43.304
that money, in order to achieve that.

00:48:43.304 --> 00:48:46.214
'cause that's what most people are doing,
is they're just rolling over one of their

00:48:46.214 --> 00:48:50.494
retirement accounts or, other pensionable
items in order to buy those years.

00:48:50.854 --> 00:48:50.914
Yeah.

00:48:50.914 --> 00:48:52.384
Does that make, does
that kind of make sense?

00:48:52.654 --> 00:48:52.924
Louie: Yep.

00:48:53.014 --> 00:48:53.944
I totally agree.

00:48:53.944 --> 00:48:57.544
I think, I hadn't really thought about
what if you don't work a full career

00:48:57.544 --> 00:48:59.914
here and you bought service credit
and now you still have to take the hit

00:48:59.914 --> 00:49:01.924
from an early retirement perspective.

00:49:01.984 --> 00:49:05.014
Then all of a sudden it really didn't
make sense for you to buy service credit.

00:49:05.354 --> 00:49:08.534
that money would've served you
better had you just kept it invested

00:49:08.744 --> 00:49:12.104
in the market earning, somewhere
between eight and 10% a year.

00:49:12.464 --> 00:49:12.914
good point.

00:49:12.914 --> 00:49:13.874
That's a good way to look at it.

00:49:13.874 --> 00:49:17.144
So yes, we're not poo-pooing it
for a lot of people it does make

00:49:17.144 --> 00:49:21.524
sense, but that is why it's, it,
it depends on what your service is.

00:49:21.524 --> 00:49:24.674
When you got hired with a fire
service, how long you're planning on

00:49:24.674 --> 00:49:25.934
being here, do you really love it?

00:49:26.274 --> 00:49:29.634
are you gonna hopefully get lucky
and have a full healthy career here?

00:49:30.144 --> 00:49:34.074
All those things go into, consideration
when you're gonna purchase service credit.

00:49:34.074 --> 00:49:38.184
Whereas if it's sitting in a 4 57 or an
IRA or a 401k with a different employer.

00:49:38.784 --> 00:49:41.784
Man, you have that regardless of what
happens at the fire service, regardless

00:49:41.784 --> 00:49:45.354
of how fruitful your career is or
is not here, you're gonna have that

00:49:45.354 --> 00:49:49.294
money invested working for you, and
you're gonna be able to give yourself a

00:49:49.624 --> 00:49:51.454
pension, if you will, from that money.

00:49:51.484 --> 00:49:54.094
And I think that that is,
that's really valuable.

00:49:54.094 --> 00:49:58.894
And even though John and I have called
the pension, the, the cornerstone of,

00:49:58.994 --> 00:50:02.094
financial independent for firefighters,
which is true, we, we look at it

00:50:02.094 --> 00:50:05.364
as, as only one of the cornerstones,
or at least I'm trying to build

00:50:05.364 --> 00:50:10.024
my financial, picture so that it's
only one of those legs of the stool.

00:50:10.414 --> 00:50:15.904
But I also have a 4 57 and an
IRA and, 401k from, my spouse.

00:50:15.904 --> 00:50:20.054
And so we're, we're looking at all of
those, and we want to, to spread out

00:50:20.054 --> 00:50:24.854
our risk so that if one of those, one of
those legs of the stool fails, we still

00:50:24.854 --> 00:50:27.724
have money in other, in, in other legs.

00:50:27.754 --> 00:50:32.134
So, if the pension were to go bankrupt,
which we don't think it will, don't,

00:50:32.134 --> 00:50:33.724
we're not trying to be an alarmist here.

00:50:34.339 --> 00:50:37.759
But if it did well, we would
still have money in our 4 57 and

00:50:37.834 --> 00:50:39.304
Jon: you got other buckets to pull from.

00:50:39.304 --> 00:50:39.544
Exactly.

00:50:39.784 --> 00:50:40.174
Yeah.

00:50:40.189 --> 00:50:41.239
Louie: I just like that idea.

00:50:41.239 --> 00:50:45.079
I just feel like it gives me some
security and some, diversification of

00:50:45.079 --> 00:50:46.969
risk that makes me sleep well at night.

00:50:47.029 --> 00:50:50.299
Jon: Yeah, I just, yeah, the, the one
thing I just don't like the most is,

00:50:50.299 --> 00:50:53.359
'cause mathematically it makes the
most sense that if you are going to

00:50:53.359 --> 00:50:57.524
purchase service credit, do it as soon
as you can just from a mathematical,

00:50:57.524 --> 00:50:59.114
I'm getting in at the cheapest rate.

00:50:59.574 --> 00:51:01.794
and that's just asking a lot
after someone's been here for

00:51:01.794 --> 00:51:03.504
a year or even for five years.

00:51:03.504 --> 00:51:05.574
Is this truly something that
you're gonna stick out and do

00:51:05.574 --> 00:51:07.224
for another 20 or 25 years?

00:51:07.644 --> 00:51:11.004
And I don't know, I used to always say
yeah, for the most people, but we're

00:51:11.004 --> 00:51:13.824
starting to see a trend where people
are just being more mobile or they

00:51:13.824 --> 00:51:15.204
just want different opportunities.

00:51:15.204 --> 00:51:18.714
And we just want you to have as
many opportunities as you can

00:51:18.714 --> 00:51:23.049
and have as many options from a
financial, asset standpoint and where

00:51:23.049 --> 00:51:24.099
you're gonna pour that money from.

00:51:24.099 --> 00:51:27.669
So that's what we're gonna
talk about for, service credit.

00:51:28.099 --> 00:51:31.389
we also recognize, that, we're talked.

00:51:31.459 --> 00:51:34.209
Exclusively about the defined
benefit plan, That's what this

00:51:34.209 --> 00:51:35.259
whole thing was all about.

00:51:35.529 --> 00:51:38.559
We also know that there's other
pension plans that our members have

00:51:38.559 --> 00:51:40.239
access to or are currently enrolled.

00:51:40.239 --> 00:51:43.269
There's the hybrid plan, which
is a split between a defined

00:51:43.269 --> 00:51:45.339
benefit and the 4 0 1 a plan.

00:51:45.699 --> 00:51:48.249
And then we have people that are
just straight money purchase plans,

00:51:48.249 --> 00:51:50.109
That's just a straight 4 0 1 a plan.

00:51:50.359 --> 00:51:54.829
we do recognize that and we, we don't
wanna leave out that, that listenership,

00:51:54.829 --> 00:51:56.569
on potential things that we wanna discuss.

00:51:56.569 --> 00:52:00.629
So, Louis and I have heard you guys
and we understand, at least for West

00:52:00.629 --> 00:52:04.949
Metro, that's still about 60 of our
members that are in the money purchase

00:52:04.949 --> 00:52:06.449
component of it, and they want

00:52:06.499 --> 00:52:09.829
Us to talk about the plan, not only
how it's funded, but just things

00:52:09.829 --> 00:52:12.439
to think about when it comes from
like an investment standpoint.

00:52:12.439 --> 00:52:16.909
So we hear you loud and clear, and I
know as our podcast is growing and we're

00:52:16.909 --> 00:52:20.209
getting a broader audience out there,
there are places like South Metro,

00:52:20.459 --> 00:52:24.299
those guys, for the most part, all their
new hires are still in a 4 0 1 a plan.

00:52:24.329 --> 00:52:27.809
They're not in the defined benefit plan,
and they're one of the largest fire

00:52:27.809 --> 00:52:29.339
departments in the state of Colorado.

00:52:29.339 --> 00:52:30.899
So we definitely hear
you guys on that one.

00:52:30.899 --> 00:52:34.689
So we will, we'll give another episode
that we'll dedicate to, probably a

00:52:34.689 --> 00:52:37.719
mixture between not only people that
are in the hybrid component, but

00:52:37.719 --> 00:52:39.939
also in the money purchase component.

00:52:40.179 --> 00:52:40.329
Louie: Yeah.

00:52:40.329 --> 00:52:43.929
We just didn't want to convolute it by
trying to add that in or try to make

00:52:43.929 --> 00:52:48.009
it like a, an add-on to, oh, well, you
gotta think about this if you have the

00:52:48.009 --> 00:52:51.729
money purchased, that it deserves to
be a separate conversation and not part

00:52:51.729 --> 00:52:53.499
of the defined benefit pension plan.

00:52:53.619 --> 00:52:54.819
Jon: No, 100%.

00:52:54.819 --> 00:52:57.909
So we hear you guys, loud and
clear on that one, and that

00:52:57.909 --> 00:53:00.429
will be up for a future episode.

00:53:00.769 --> 00:53:03.439
so this was, wrapping up kind
of the two part series, if

00:53:03.439 --> 00:53:04.819
you will, from the pension.

00:53:04.819 --> 00:53:08.459
There's obviously, Louis and I, if
you guys can't tell, we we really

00:53:08.459 --> 00:53:10.169
do believe in the defined benefit.

00:53:10.169 --> 00:53:14.039
we believe in the, the purpose behind
it, the intent behind it, the safety

00:53:14.039 --> 00:53:17.879
net where it takes a lot of the thought
process out of investing out of our

00:53:17.879 --> 00:53:21.779
members hands, which can, quite frankly,
when we were talking about, DraftKings

00:53:21.839 --> 00:53:25.799
and, all these other things, it really
does and I know when West Metro elected

00:53:25.799 --> 00:53:29.639
to go back into the pension plan, the
people that were really pushing that

00:53:29.699 --> 00:53:31.469
from that were a lot of the union.

00:53:31.789 --> 00:53:36.379
E-board because they recognized just
some of the risks that, our members

00:53:36.379 --> 00:53:40.569
were taking by, investing, their monies
themselves and quite frankly, being wiped

00:53:40.569 --> 00:53:45.559
out after 2008 and 2009, and they just
didn't want that, for the next generation.

00:53:45.559 --> 00:53:47.519
So there's a lot to unpack there.

00:53:47.544 --> 00:53:47.784
Louie: Yep.

00:53:48.444 --> 00:53:48.744
Jon: All right.

00:53:49.504 --> 00:53:51.809
Anything else you want to add for
the old pension episode there?

00:53:52.139 --> 00:53:52.259
Lb?

00:53:52.524 --> 00:53:55.044
Louie: No, I think that was a
good overview of the pension.

00:53:55.044 --> 00:53:56.934
I think it gives, I hope
it gives you guys a better.

00:53:57.429 --> 00:54:01.239
Feel for what your pension is about,
how it works, what you might get when

00:54:01.239 --> 00:54:04.569
you retire, what your options are
as you're approaching retirement.

00:54:05.019 --> 00:54:06.699
And just know it's an awesome thing.

00:54:06.699 --> 00:54:09.219
There's not a lot of people with
pensions and there's even fewer

00:54:09.219 --> 00:54:12.789
people with solid financial pensions,
and that is what we have here.

00:54:13.029 --> 00:54:16.419
We are very blessed to have
a pension as our cornerstone

00:54:16.419 --> 00:54:17.409
for financial independence.

00:54:17.769 --> 00:54:20.949
And someday, I mean, what you're working
for, what you're working hard for now,

00:54:21.199 --> 00:54:24.649
just remember this during those late
night calls and those lift assist when

00:54:24.649 --> 00:54:27.709
you're getting up at two, three in
the morning a couple times, is that,

00:54:28.259 --> 00:54:32.879
someday you are going to retire and
your pension is gonna be there for you.

00:54:32.879 --> 00:54:35.849
It's gonna give you a monthly benefit and
you're gonna be able to cash that check

00:54:35.849 --> 00:54:40.419
and travel with your spouse and, have a
good time and not have to worry about the

00:54:40.419 --> 00:54:44.349
ups and downs of the market because you're
gonna have this solid check that comes in.

00:54:44.889 --> 00:54:46.569
Every month without fail.

00:54:46.779 --> 00:54:49.389
That's a really, really cool thing
that not a lot of people have.

00:54:49.389 --> 00:54:51.229
So, we're blessed to have it.

00:54:51.409 --> 00:54:55.599
We're, fortunate that we're working
for it, and, we have a great plan.

00:54:55.599 --> 00:55:00.039
FPPA is solid and if anything changes
in that, and if we think that as the

00:55:00.039 --> 00:55:01.719
years go by, something's wrong with that.

00:55:01.719 --> 00:55:01.959
John.

00:55:01.959 --> 00:55:03.939
And I will tell you, we're, we're
gonna shoot straight with you.

00:55:03.989 --> 00:55:06.509
we're big believers in the pension though,
and we're really excited that we're

00:55:06.509 --> 00:55:07.919
gonna have that someday when we retire.

00:55:08.024 --> 00:55:08.384
Jon: Yeah.

00:55:08.444 --> 00:55:12.474
No, that's, really well said,
Louie, to wrap up this episode.

00:55:12.474 --> 00:55:16.614
So it's, it really should, at the
end of the day, just give our members

00:55:17.004 --> 00:55:18.324
a little bit more peace of mind.

00:55:18.354 --> 00:55:22.494
This job doesn't always offer that
because of sleep deprivation and all

00:55:22.494 --> 00:55:24.324
the other things that we have to, face.

00:55:24.324 --> 00:55:27.544
But this is really one of the things
that, we're looking out for you and

00:55:27.544 --> 00:55:30.454
I know FPPA is looking out for you,
and it's just one of those things

00:55:30.454 --> 00:55:33.674
that should just make, the decision
of whether or not to retire and how

00:55:33.674 --> 00:55:35.354
you're gonna retire a little bit easier.

00:55:35.564 --> 00:55:39.554
'cause it takes a lot of the, the nuances
of market conditions out of it, and you

00:55:39.554 --> 00:55:41.174
just know what your benefit is gonna be.

00:55:41.534 --> 00:55:44.294
And then you go on with the next
chapter of your life, which hopefully

00:55:44.294 --> 00:55:47.084
is a great chapter and it's a long
chapter and you get to have a lot

00:55:47.084 --> 00:55:49.989
of different experiences with the
people that you wanna experience with.

00:55:50.589 --> 00:55:52.869
So, without further ado,
another great episode.

00:55:52.869 --> 00:55:54.639
Louis, I feel like you
carried me on this one.

00:55:54.799 --> 00:55:57.239
So, nonetheless, it's, been a pleasure.

00:55:57.299 --> 00:55:58.229
and I really am.

00:55:58.279 --> 00:56:02.599
humbled by a lot of the comments that
we've gotten that, you know, I don't feel

00:56:02.599 --> 00:56:04.069
like we're wasting our breath with this.

00:56:04.109 --> 00:56:05.579
it makes a lot of sense for people.

00:56:05.579 --> 00:56:09.569
And whether you're listening to us in your
car or on a walk, or you're the new guy

00:56:09.569 --> 00:56:14.039
cleaning the station, toilets, whatever
that is, we, we take this seriously.

00:56:14.039 --> 00:56:15.029
We wanna do a good job.

00:56:15.029 --> 00:56:18.359
So if you guys wanna see something
different right from the way that we

00:56:18.359 --> 00:56:22.849
do this or what we talk about, you
know, how to get a hold of us by now,

00:56:23.119 --> 00:56:25.879
ask the fiscal firehouse@gmail.com

00:56:25.879 --> 00:56:27.309
is the best, email link.

00:56:27.309 --> 00:56:29.319
And then what's the,
what's the gram handle?

00:56:29.519 --> 00:56:30.449
Louie: just fiscal firehouse.

00:56:30.449 --> 00:56:31.529
At Fiscal Firehouse.

00:56:31.529 --> 00:56:34.949
You can send a direct message to us on
there and we'll be able to address those.

00:56:34.949 --> 00:56:36.569
And we do try to do those
throughout episodes.

00:56:36.569 --> 00:56:40.319
And maybe one day we'll do another
specific episode where it's just answering

00:56:40.319 --> 00:56:41.579
questions if we get enough of them.

00:56:42.029 --> 00:56:44.639
So yeah, ask fiscal firehouse@gmail.com

00:56:44.699 --> 00:56:46.904
or at fiscal firehouse on Instagram.

00:56:47.069 --> 00:56:47.369
Jon: Yep.

00:56:47.459 --> 00:56:51.019
Well, enjoy the, basketball
that's about ready to ensue for

00:56:51.019 --> 00:56:52.249
us for the next couple weeks.

00:56:52.249 --> 00:56:54.979
They, uh, you know what the
number one elective operation

00:56:54.979 --> 00:56:56.119
that has performed this week.

00:56:56.689 --> 00:56:57.289
Louie: a vasectomy.

00:56:57.289 --> 00:56:58.219
Jon: The vasectomy.

00:56:58.219 --> 00:56:58.221
The vasectomy.

00:56:58.226 --> 00:56:58.999
That's right.

00:56:58.999 --> 00:56:59.599
So for all

00:56:59.629 --> 00:57:00.109
Louie: I need to get

00:57:00.199 --> 00:57:02.389
Jon: listened to this,
I'm looking at you, Louie.

00:57:02.479 --> 00:57:03.109
Louie: I gotta do it

00:57:03.319 --> 00:57:05.179
Jon: hopefully you've got all
the things that you need in

00:57:05.179 --> 00:57:06.919
order to take care of yourself.

00:57:06.979 --> 00:57:08.329
enjoy sitting on the couch

00:57:08.389 --> 00:57:09.799
Louie: Talk about money saving tips.

00:57:09.799 --> 00:57:10.759
That's what it should have been.

00:57:10.759 --> 00:57:14.719
It's like you wanna save some
money, get a vasectomy, you'll save

00:57:14.764 --> 00:57:16.354
Jon: are gonna lead with that next time.

00:57:16.354 --> 00:57:16.894
Oh my god.

00:57:16.984 --> 00:57:18.094
Hundreds of thousands.

00:57:18.094 --> 00:57:21.304
Actually, when it calculate it
all, it's probably millions.

00:57:21.304 --> 00:57:22.924
So we kind of blew that one.

00:57:22.924 --> 00:57:24.364
We should have opened up with that.

00:57:24.364 --> 00:57:28.284
This is the vasectomy episode, but, no,
if you got a team, good luck with your

00:57:28.284 --> 00:57:30.414
brackets, whoever you're rooting for.

00:57:30.664 --> 00:57:33.844
if you're actually at the, ball
arena in watching the game right now,

00:57:33.844 --> 00:57:36.574
hopefully you guys are having a great
time and are rooting for the badgers

00:57:36.604 --> 00:57:38.679
and not the big blue, but whoa, whoa.

00:57:38.684 --> 00:57:43.264
Nonetheless, nonetheless, until, the next
episode, everyone stay safe out there.

00:57:43.534 --> 00:57:44.494
Thanks for listening.

00:57:44.549 --> 00:57:45.719
have a wonderful weekend.

00:57:45.959 --> 00:57:46.859
Louie: safe and keep saving.

00:57:49.040 --> 00:57:51.590
Disclosure: The Fiscal Firehouse
Podcast is a podcast curated

00:57:51.590 --> 00:57:54.110
specifically for local 1309 members.

00:57:54.230 --> 00:57:57.920
This podcast is for informational
and educational purposes only,

00:57:58.130 --> 00:58:01.040
and should not be construed as
professional financial advice.

00:58:01.190 --> 00:58:03.920
Should you need professional
advice, consult a licensed

00:58:04.040 --> 00:58:06.440
financial advisor or tax advisor.

00:58:06.620 --> 00:58:10.490
The opinions of John Beatty, Louis
Barilla and their castmates are

00:58:10.490 --> 00:58:13.970
solely their own, and don't reflect
that of West Metro Fire Rescue.