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Come join a groundbreaking new podcast that promises to change the way you think, the way you live, and the way you manage your future. Grab a cup of coffee, a 6mg Zyn, some noise-canceling headphones, and get lost in the world of the Fiscal Firehouse. With your co-host Jon Beattie and Louie Barela, the Fiscal Firehouse is your guide to financial freedom. Tailored to union firefighters, we will discuss problems, solutions, and benefits that are unique to our profession. Change your finances, change your life at the Fiscal Firehouse. Brought to you by Local 1309.
Jon: Welcome to the fiscal firehouse,
a podcast dedicated to promoting
financial literacy to firefighters.
I'm your cohost, John Beatty,
executive board member of local 1309,
a lieutenant, and also a certified
financial planner with me, I have the
other cohost of the fiscal firehouse,
Louie Borrella, executive board member
of local 1309 ambulance driver, and
want to be financial expert together.
John and I hope to bring clarity
to the world of personal finance,
specifically relating to firefighters.
Firefighting is a difficult job.
Making sound financial
decisions shouldn't be.
In today's episode of the Fiscal
Firehouse, John and Louie will discuss
their favorite holiday traditions.
John and Louie will also open up the
mail bag and answer some questions
that have come from our listeners
after the last several months of
listening to the Fiscal Firehouse.
Lastly, John and Louie will discuss the
Social Security Fairness Act, which has
the potential to change firefighters
retirement strategies, specifically
resulting in the amount of money they'll
be able to collect from Social Security.
Without further interruption, let's
go to local 1309 Studios and the
recording of the fiscal firehouse
welcome back to another episode
of the fiscal firehouse.
We have a special episode.
This is our holiday edition.
Today is December 12th, 2025.
I'm your co host John Beatty
with me today in a different
studio, not our local 1309 studio.
It's getting renovated as we
speak is my partner in crime,
Louie Burella, LB say hi.
Louie: Hey, Merry Christmas, good to
see you guys, good to be here, and this
is a nice upgrade over 1309 Studios.
That's right, yeah, 1309 Studios,
for those of you that don't know,
it's our Union Hall, it's located
right next to our Fire Station 8.
Jon: Studios.
Louie: yep.
Yeah,
Jon: But today we're going to
have a lighthearted episode.
Louie and I thought we would get
to some of our listener questions.
We'll get into the mailbag
and answer some of those.
We're also going to talk about what we do
for the holidays and make this a little
bit lighthearted and light spirited,
but also there's some breaking news that
involves retirement planning, specifically
social security benefits and Firefighters
and police officers and teachers.
And we'll talk about that here
in just a minute, but we're
going to start with just a little
episode from the Muppets Christmas
Louie: Muppets Christmas Carol.
It's one of the best Christmas movies out
there, and definitely the best rendition
of a Christmas Carol by Charles Dickens.
If you guys haven't seen it, especially
with your kids, ah, it's a great one.
Jon: So here's a little
ditty in honor of Louie.
We're going to start this.
Let us deal with the eviction
notices for tomorrow, Mr.
Cratchit.
Tomorrow's Christmas, sir.
Very well.
You may gift wrap them.
Let us help you with that, Mr.
Cratchit.
Oh, my, there are certainly a lot today.
We'll get it, we'll get it.
Okay, okay.
Here you go.
Christmas is a very busy time for us, Mr.
Cratchit.
People preparing feasts,
giving parties, spending the
mortgage money on frivolities.
One might say that December
is the foreclosure season.
Harvest time for the moneylenders.
Hey, boys, pack some.
Come on, mister.
Come on, come on.
Do it now.
If you please, Mr.
Scrooge.
It's gotten colder.
Yeah.
And the bookkeeping staff would
like to have an extra shovel
full of coal for the fire.
We can't do the bookkeeping.
Yeah, all of our pens
have turned to inksicles.
Yeah, our assets are frozen.
How would the bookkeepers like
to be suddenly unemployed?
Yeah!
Louie: like Scrooge said, it's the
harvest time for the money lenders.
The
Jon: harvest time.
We
Louie: don't want that to be your fate.
And that's why John and I do this podcast.
That's why we are committed to teaching
you the principles of financial and trying
to get you guys to financial independence.
That's what we're passionate about.
And it's hard, right, John,
during Christmas season, like
everyone goes over budget.
You're always, you know, buying gifts
that you necessarily didn't plan
for and trying to make it special.
And we get that, we know that it's tough.
I think during this time we didn't want
to like, Hit you guys with something hard,
like, let's talk about the pension episode
or how to save even more money than
you guys are already comfortable saving
because you got Christmas coming up.
And we, we get it.
We get that.
It's tough.
I know, I'm sure John, you've, you
struggled with it too during Christmas.
I know that I have.
So we're trying to keep it more
lighthearted and answer some of the
questions and concerns that we've
got over the last couple of months.
And.
Yeah, hopefully we can get you guys
there so that maybe next year Christmas
isn't so painful when it comes to
the finances, because I don't know,
maybe you saved and planned for it
and your finances are a little better.
If we can just get you to that
point, even I feel like that's a win.
Jon: Yeah.
And this is where, if you can be,
you know, diligent and set a budget,
it just makes things so much easier.
This is how much we're going to spend
on the kids or on our teachers or
anyone else that we care about, and
this is what we're going to give.
And then you just stay within that.
But every time we try
to do that, we always go
Louie: Sure.
It's hard, man.
It's hard.
Well, so, and one thing that has helped
us Caitlin and me is that we, we have
a Christmas line item in our budget.
We use YNAB as you guys
know, and we save all year.
We every.
Every month we put money into our
Christmas fund and that way when it
gets to December and we're actually
in the process of buying gifts
and hosting parties and events, we
already have a little slush fund for
Christmas and that takes the edge off.
Not going to lie.
We sometimes still go over that
and we have to rearrange the
budget and still find money.
But man, we already have a massive
leg up when we get to December because
we've been saving for a full year.
For christmas, so that's my biggest
tip for you know, making the holidays
less painful is if you can save through
You know save throughout the year for
christmas you'll thank yourself and it
is much less stressful when you have
that fun because you've been Slaving a
little bit here and there throughout the
year I don't know if you guys do the same
thing, but man, it makes a huge difference
Jon: Yeah, I know we don't.
We just always have
some money in reserves.
And don't specifically line item budget,
so to speak for presidents and stuff.
And every year I know we go over.
But that's something that's important
to us is gifting and being trying
to be as generous as possible.
At least for my family and I know your
family too, we feel really blessed with a
lot of different things, with our health,
with good jobs, a lot of different things.
So we try to, you know, pay that
forward as much as possible.
So sometimes like I, it truly is like,
I always feel better gifting than
receiving, like I get a lot of joy
out of bringing someone something.
So that's something
that's important to us.
And, you know, ultimately in January we
end up paying for it and that's fine, but
we always, we always have money set aside.
We don't specifically budget for just Our
presence, but it just comes out of kind
of our, our savings fund and the credit
cards come in and we'll see what we owe
Louie: There you go.
Jon: Mr.
JP Morgan
Louie: JP gets his man.
Jon: that's right.
That's right.
But in the spirit of that we
thought it'd be cool to kind of
talk about Christmas traditions.
So we definitely have some of ours here
at the Beatty household, but I'm curious,
Louis, starting with the Barella family,
Louie: Sure.
Tell
Jon: of your Christmas traditions
that you want to share with the, with
the listeners, with the audience?
Louie: Yeah.
It's we love Christmas.
We get a lot of joy out of it and we
do a lot of family stuff together.
So the holiday season is always busy
for us starting at Thanksgiving,
going through the new year.
One of the things that we do that my
family has been doing for, you know,
47 years now is we do something called
the tamale fest and christmas sing
along and that's actually this weekend.
So tomorrow we'll be making tamales at
my house and our we'll have some family
members that come over We call them
the tamale makers and we will just make
tamales all morning long I don't know
if you guys have ever made tamales,
but it is a an intensive process.
It's not something Yeah.
Yeah I when I tell people guys at the fire
station that we do this they're always
like oh man you should make tamales here
like let's do that here and i'm like no
let's not do that here the last thing
we need to do is try to roll out masa
and steam tamales and get calls and get
interrupted it is it is intensive i love
tamales they're so good i could eat them
all year long but it's not worth making
at the fire station that being said it
is worth making at our house when we are
getting ready for this big tradition.
So yeah, tomorrow we'll
make a bunch of tamales.
I think last year we
made about 120 tamales,
Jon: Are you going to be a tamale
maker, or are you going to be a kid
Louie: a, I'm a, I like to make tamales.
Yeah.
But it's, it's hard.
Cause I, I'm, I'm really like the gopher.
So I'll like take the stuff that's
on the stove and I'll and I'll take
it to the different tamale makers.
go through the assembly line and
yeah, that's try to, that's what I do.
But now with three little kids, like
I'm also the wrangler of children.
So, I don't really get a lot of tamales
made myself, but I help the actual
real tamale makers make the tamales.
So anyway, we do that.
And then on Saturday we go over to
my aunt and uncle's house and we
just have this huge feast, tons of
tamales, green chili casseroles.
All the family members bring different
things and then we will eat tamales, eat
good food, and sing Christmas carols.
So my uncle plays the piano.
He's been doing that for every year,
47 years, he's been playing the
piano and he can sight read music.
So it's really cool.
He could just jump right
into it and take requests.
Jon: take requests.
I'm so jealous.
So jealous of anyone that is
musically inclined or talented.
I had zero of that ability.
So I'm always in awe of people that
can either sing or play an instrument.
It really is a cool gift and
a skill that I do not possess.
Louie: it's wonderful
for us when he retires.
I hope he doesn't retire for years but
when he retires, I don't know what we're
gonna do we're gonna have to I don't know
hire a musician or maybe my cousin gram
who plays the guitar We'll switch it to
guitar christmas carols instead of piano.
I don't know.
Jon: That's super
Louie: Yeah, but it's cool.
So the singing is bad, but the food is
good and it's the it's the barella You
Tamale Fest and Christmas sing along.
That's the biggest tradition that we do.
We do some other little smaller family
things with just my immediate family.
And that's like, we, we do this big
spread for Christmas Eve and we'll
have a bunch of cheeses and meats and
crackers and cookies and desserts.
And we just kind of all camp out by
our little fireplace and read Christmas
stories and watch Christmas movies.
And that's always on Christmas Eve.
And then depending on our work
schedule, you know, with the, Sometimes
we're working Christmas or Eve or
Christmas Day or both or vice versa.
We'll kind of figure it out, but
we always do homemade spaghetti.
Caitlin
Jon: makes, oh,
Louie: good homemade
spaghetti from scratch.
She makes the
Jon: pasta
Louie: makes the pasta, makes
the sauce and the meat sauce.
And it's really, really good.
And so that's kind of like a
special little treat that we do
every Christmas or Christmas Eve,
Jon: Oh man, I love that.
It's a great tradition.
Louie: Those are great, man.
We love it.
So what about you?
What, what do the Bates do?
Jon: Bates, we, you know, ever since
I've met my wife, Katie, we we've
changed some of us and we've inherited.
I've inherited some of her
family's the Gallagher tradition.
One of our biggest traditions ever since
Katie and I first started getting together
and it was her family's tradition.
So now it's our family's tradition is on
Christmas Eve, we do the Chinese food.
Louie: Oh yeah, that's cool.
Jon: it reminds
Louie: of Christmas Eve or Christmas
day, Christmas Eve, Christmas Eve,
Jon: Yep.
Christmas Eve we go and get Chinese food.
So lately we've been getting it from
Imperial Garden over there on Broadway.
Pretty tasty little treat.
And that's something that
she always grew up with.
I don't know.
You've probably watched A Christmas Story,
you know, so that reminds me a lot of, and
I don't know if that's where they stole
it from or not, but she said ever since
she was little, she always remembered.
She grew up in Fort Collins and there
was a little Chinese restaurant there.
So always on Christmas Eve, they would
go there and get themselves some takeout
Chinese So that was one of the first
things I remember when I first started
dating my wife is we went up to Fort
Collins We went up with her family and we
actually went out for dinner that night
But it was at the same Chinese restaurant
that they'd been going to forever.
So that was pretty cool So we'll typically
have most of my family here And then my
dad and my sister and some of our other
relatives that are close by will all
come here And same thing afterwards.
We'll typically read some Christmas
stories and just let the kids play around
and it's interesting like Having kids
definitely changes christmas, you know
for all for the better Right the thought
of what christmas is and the sparkle in
their eyes and when they jump as fast as
they can They wake up at three o'clock
in the morning wanting to see if if
santa has come So that's one of the the
traditions that we have and then One of my
traditions that I remember growing up as
a kid is my mom was a really good baker,
and she loved to make Christmas cookies.
So, you know, two or three weeks
before Christmas, she would start
baking, and she had six to seven
different styles of cookies, Christmas
cookies, that she would make.
She'd make this delicious,
delicious cookie.
Fudge.
So every weekend I can remember for
two to three weeks before Christmas,
you'd just be baking away, making dozens
upon dozens of cookies and I would
help frost them and everything else.
And
Louie: Oh, so it was not just
like put a little sprinkles on it.
You guys were frosting 'em
and decorating them and
Jon: I'm decorating.
I'm sprinkles, chocolates, making
caramels fudge the whole nine yards.
So that's something since my mom
passed away, you know, 10 years ago.
That's something that
we've tried to continue on.
And luckily Katie is
the baker of the family.
And she does a wonderful job and we always
think of honoring my mom in that capacity.
So that's something that we've always done
and something that is new to our family.
Chippy, the Christmas elf has bestowed
our family over the last couple of years
where he shows up sometime around the
first week of December and he diligently
watches over our children to make sure
that they are behaving appropriately
because he is then going to report back
to Santa on Christmas Eve and he is
listening, always in the background.
So he, even if you don't
have a Christmas list.
that you had sent to Santa, he
just knows he's always listening.
And then he'll bring that
message back to Santa.
And the thing with the Christmas elf
and ours Chippy is you can't touch him.
If you touch him, he loses his magic.
So every, every morning he graces
Louie: that good?
Cause then if they touch him,
he can't report back to Santa.
Isn't that a good?
It
Jon: it could be good or bad depending
on how your child or children
have behaved over the, over those
course of that month or whatnot.
But it's something he's very
magical and he changes his location
every morning, at least for us.
So his magic and where he moves about
the house must change overnight.
So,
Louie: does he mess things
up or like, make messes?
Because isn't that part of the thing?
Jon: Chippy has he's got
some interesting behaviors.
I mean, sometimes he's just
watching, but other times he
has what did he do earlier on?
He got himself in toilet paper, and then
he managed to get himself down the stairs.
So we found him at the base of the
stairs just covered in toilet paper.
Chippy has done magic for us,
where he's made different art.
He's left us some presents in the toilet.
Chippy's a little mischievous.
I think he's got a
little B Shifter in him.
I think our, at least our Christmas
elf, you know, it's only fair me
being the B Shift rep that Chippy,
I think is a honorary B Shifter.
Louie: B Shift group
Jon: he's always getting in trouble and
making, and making more work for me.
But I love Chippy and I
love what he stands for.
This is something that I
don't ever remember me having
a Christmas elf growing up.
So I think it's kind of a newer tradition.
He must just know that our
kids need a little bit more.
Louie: else
Jon: A little more Christmas magic.
So it is cool to see them wake up
every morning and always looking,
Louie: hunting
Jon: looking for for Chippy
to see if he's still here, if
he's reported back to Santa.
So those are some of our some
of our Christmas traditions.
And you know, the biggest thing for me
is carrying on those traditions, but just
being surrounded by friends and family.
You know, there's just
nothing better for it.
Like I said, I know both of us feel
very fortunate and grateful for all
the blessings that we have received.
So, we're just trying to carry forth that
spirit of what Christmas is all about.
it's cool Every every family's got their
own unique traditions, which I think is
pretty special So whether it's christmas
or hanukkah or any other celebrations that
you might have louis and I wish you the
best for you guys and your families this
this holiday season and moving into 2025 I
Louie: Yep.
I think it's kind of cool even
kind of bringing in some of the
firehouse traditions and stuff.
Jon: hundred
Louie: obviously we're, some of us are
working during Thanksgiving and Christmas
and new years, and a lot of stations
really make it like a family event.
We at station three on a shift,
we were working this year.
So we had this big old Thanksgiving dinner
at at our station and it was wonderful.
Honestly, it was one of the
best Thanksgiving that I've had.
We had families over read, smoked some,
some turkey breast and we made a ham
and we just had a bunch of good food.
The families brought different you
know, desserts and side dishes.
And we just had a great time.
It was wonderful.
The kids loved it.
The kids love the fire truck and
got to kind of run around the
station and run through the bay
and they just had a great time.
So it was, it's kind of cool to
bring that into and have those,
I don't know, traditions and
family time at the station too.
So, for those of you that are
working during this holiday season
on any one of the shifts thank you.
It's, we know that it's sometimes hard
being away from your family, but sometimes
it's also fun to get to bring the families
to the station and have them enjoy
that kind of a tradition of, of mom or
dad working while at the fire station.
It's kind of cool, too.
Jon: Yeah.
Well said Louie.
We definitely think about you guys and
gals that are out there working when
everyone else is at home with their
families, but families just come to you.
So it's Christmas and the holidays
is all about where you're at, right?
Yeah.
Louie: And and a extra special shout out.
I don't, I don't know if they're
listening, but to the fleet guys, man,
best, best fleet guys in the state.
Those guys are awesome.
And I know that they're working
hard even during the holidays too.
So, we are hard on our rigs
and those guys make sure that
we're always in a good spot.
So, special shout out to.
To the fleet guys, we're glad to have you.
You guys are a huge blessing
for, for our department and yeah.
Thank you guys for what you do.
Jon: Yeah, absolutely.
So let's get out.
We're going to switch gears a
little bit and then head over
to the mailbag, if you will.
And these are just some of the
questions that we have received.
So once again obviously if you see
Louie and I feel free to just talk
to us about these questions and we'll
make sure that we put it on the docket.
And if you don't see Louie and I,
and you want to question ask, there's
always the askfiscalfirehouse at Gmail.
Email address to send questions.
We got the Instagram page
Louie: Yep at fiscal firehouse is our
handle on instagram so you guys can
follow us there We'll be using that
to post updates when new episodes
drop or whatever but you can also send
like a direct message on instagram
if you want to If you have a question
about something you heard or a topic
you want us to discuss and we don't
Obviously we don't do it every episode.
We're not like, Oh,
let's go to the mailbag.
But every few episodes, hopefully
we'll be able to answer some questions.
So because this is our kind of end of year
Jon: Holiday smorgasbord
Louie: yeah, we'll, we'll answer some
questions that you guys have some
of the concerns that you guys have.
Jon: So this one is buying pension years.
Is it a good idea?
Would I be better served to invest the
money I would use to buy pension years
or save in like a 401a or my 457 plan?
So great question, Louis.
I know, especially for our newer
folks coming on, you probably
get asked this question a
Louie: quite a bit actually.
Jon: quite a bit.
There's a lot of just mystique around
this and, you know, it sounds like a I
mean, I'm beating a dead horse here, but
it totally depends on your situation.
so we'll talk about just some of the
intricacies of this and we're going
to have a pension episode onto itself.
So we'll can get a little bit more in
depth about some of these questions
or if there's some more detail.
We can get into it, but it really,
you know, first and foremost it really
depends on the pension plan to begin with.
I'm really proud and happy.
I've gotten a lot of feedback that our
messaging has gone beyond just West metro.
There's now other local
departments that are listening.
I know there's some police
departments that I've gotten on
Louie: Nice.
Very
Jon: all sorts of different
people that are listening to this.
So I think, when we talk about some
of these things, we just got to
be careful about how we phrase it.
And making sure that some people aren't
getting confused So you always have
to go back to your pension plan Making
sure first and foremost that you're
in a defined benefit pension plan And
then whether or not you can buy service
years most of them do to my knowledge
But when we're talking about this
one specifically This is the one that
louis and I are the most intimately
familiar with and that's our pension
plan So that's the fppa pension plan.
So the police and firefighters in
the state of colorado the majority of
them You Pay into this pension plan.
So this is the one that we're going to
be referencing when we talk about buying
pension years So if you're not enrolled
in that specific plan Just get back to
your plan provider the plan documents,
So we'll talk about fppa in this
circumstance So first and foremost,
I think you have to figure out is
whether or not you qualify, right?
So who can buy their years?
So there's different, once
again, this is for FPPA.
So there's different years
in which you can buy.
You can either buy your military years,
you can buy public service years, or
you can buy private service years.
So that's bucketed into those
three different classifications.
as far as
Fppa is concerned is you have to wait
at least one year if you want to buy
any public service years So you have
to wait for that first year that you're
enrolled in the plan Before you can
actually go ahead and buy those years
and they're basically going to take
your highest rate So whatever your
highest salary earning years are That
is what they're going to use a factor.
They're going to figure out how
old you are, how long you're
going to pay into the plan.
And then they're going to come
up with a number as far as
what that's going to cost you.
So you have to wait at least
a year if you want to buy any
of your public service time.
And then if you want to use
Non public service time.
So if you have something that's
like private time is you have to
wait up to five years in order
for you to purchase that time.
So obviously after five years, at
least speaking for the West Metro
members, you're going to be first
grade, you'll be a paramedic.
So those are going to be
some higher salary years
Louie: better money
Jon: than that first year.
So that's probably one of the
things, if I was talking to someone
one on one as I want to ask them,
what years are they trying to buy?
Public is a little better deal because
you can basically get in at a lower
cost versus private because you got
to wait for that five year capture.
So that's something to definitely
think about and keep in mind.
And then there also, you are limited
on how many years you can buy.
So depending on whether it's private,
military, or public, it really depends.
So as far as FPPA is concerned,
you can buy up to five years.
You can buy up to five years
of private employment service.
And basically public
employment is unlimited.
You can buy as many years as you want.
So most of the time when people
are purchasing these, they use
their old retirement monies.
So if they had like a 401A or 401k plan,
that's the money that they're using.
me.
They'll roll that money in to
purchase these service credits.
So that's kind of how it's done.
But really this is one of those things
that you really want to think, you
know, on an individual basis, this is
not great, just general information.
This is something that
you want to tailor to.
But if you were to ask me just like pin
me, is it a good idea or not a good idea?
I would say that for the majority of
people, it's probably not a good idea.
And there's a couple of reasons,
and I'll let you chime in for your
thoughts on this one as well, Louie.
But first and foremost is,
those, there's no guarantees
with our job and our employment.
So if you have this pool of money and
it's retirement money set aside and then
something happens, or maybe you just
realize after a couple of years that the
fire department or the police department
or something is not for you and you've
bought those years, you're You're kind
of sunk, you know, you've already pot
committed, so to speak, all of that money
is now port towards years of service.
And honestly, you know, the defined
benefit, I love it and it's a great
plan, but it really is designed for
you to be able to put in, you know, 20,
25, 30 plus years for it to be able to,
make a little bit more financial sense.
We have members that are leaving after a
couple of years or five years or 10 years,
and it's just not a great plan if you only
can put that many years of service in.
So I always like to diversify some
of my monies and this to me is
just putting a little bit too many
of eggs in one specific basket.
And I think it's probably just
better serve to keep that, you
know, 401 a money or four 57 money.
Aside and just let that money grow
or you could roll it into another 457
plan something like that But keep that
money aside Don't you know use a bunch
of savings if you got you know a nice
little brokerage account or you got an
Inheritance and you get 100 or 200 grand
like I think that's probably better off
just as and there's different investments
that you could use That just makes it a
little bit more portable That's really the
word i'm looking for The pension plan is
not portable for the majority of people.
You don't you don't want to try to do that
Louie: And yeah, so I kind of have
similar thoughts to John on that.
And to reiterate, we love the pension.
This is great.
This is the cornerstone
of our retirement plan.
And that's true for most firefighters
that are probably listening to
this, so we really like the pension.
But.
You know, John and I also, as you
guys know, we like index funds.
And the reason why we like index
funds is because they diversify your
money over hundreds or thousands
of, of companies in the same way.
Diversifying your retirement
income or your retirement
investments is also important.
So you have the pension, which
you automatically pay into every.
and the department pays into every month.
And so we think that's good,
but having another leg of
retirement is also important.
And like we mentioned in our last episode,
the four 57 is a great way to save money
in addition to the pension so that you can
supplement the pension when you retire.
So I always tell people, you
know, instead of buying service
credit through for the pension, I
would like to see people save in.
a 457 and an IRA and, you know,
between those two investment
vehicles, retirement vehicles,
you can save over 30, 000 in that.
That is an awesome way to have your
own set of money that is portable.
You can take it, you can take it with
you if you leave early, or if you decide
that the, that the fire service is not
for you, you can take that anywhere.
In general, and like John said, it's,
it's unique upon your, your circumstances,
but in general, I would say if you're
looking to save for retirement.
And you're choosing between buying
service credit or investing in like a
457 or an IRA I would default to that
you might have circumstances that make
it more beneficial to buy service credit
But in general, I think if you got a
bunch of money that you want to find a
home for For your retirement savings.
I think you should do it in a 457 or IRA.
Yeah broad strokes
Jon: strokes.
If you came to me and said, listen,
John and Louie, I'm 22 years old.
I just spent four years in the military.
I've got this military time built up.
I know that the fire service
is what I want to do.
And I know I want to be a chief
officer in the fire service.
Right.
That to me would be more
convincing of like, okay, cool.
You have got a solid plan.
Like this is a goal
you're working towards.
Okay.
I could, I could buy off on that.
That to me makes sense because once again,
as far as how the pension is calculated,
at least talking about FPPA pension,
it's based off your three highest years.
And obviously our, our chief officers get
compensated more than the firefighters do.
So that's one of those things that,
your benefit would be enhanced
because you're making a higher salary.
So there's always going to be some
small nuances and everything else like
this, but you know, broad strokes,
like Louie said, General rule of thumb.
I would be in favor of keeping
that money, you know in a separate
retirement vehicle and then you
can use it It's more portable.
You just have more options So if
there's more questions that you guys
have regarding, you know How that's
calculated other options or stuff that
we didn't discover that was just kind
of high level but hopefully for that
listener that had that question that
Just helps them maybe frame it and
whether or not that's important or not.
But the big thing is, is when
you can actually qualify for it.
Cause I don't think a lot of people
understand you have to wait at least
that first year for public years and
then five years for private years.
So just something to consider.
All right.
Question number two, filing taxes.
I am curious if firefighters have
any tax advantages, what we should
generally be paying to have our taxes
done and ways to pay less taxes.
In parentheses legally and the advantages
of the bespoke white glove tax filing
Versus going to like an h& r block
or doing it on turbo tax All right.
So, you know,
Louie: boy,
Jon: this is this
Louie: to him, but we're
not tax professionals.
First of
Jon: this
Louie: just got to tell you that this
Jon: is not this is not tax advice, right?
That's what the disclosure says so
generally speaking though, so I think we
should, we should start with there is a
difference between tax evasion and then
tax minimization slash optimization.
So tax evasion is what you go to jail for.
That's where you're.
knowingly hiding income from the IRS,
not reporting it on your statements, and
hence you're not paying taxes on that.
That's illegal, and you will get
penalties and interest on those
penalties and potentially get jail time.
So we are not proponents of tax evasion.
No tax
Louie: No tax evasion
Jon: about that.
But one thing that you will hear and
something that I think a lot of financial
professionals right now are spending
a lot of time and effort and doing for
their clients is this concept of tax
optimization or tax minimization, right?
You want to try to reduce your tax
liability and pay the government
or the state, the least amount
of taxes as legally permissible.
And that's a huge thing, right?
They'll actually call it tax alpha.
There's all sorts of different things.
And this is the one thing that I actually
think a lot of financial advisors and
professionals and accountants could have.
A lot of value in making sure I'm
trying to reduce that amount of money.
So really there's nothing specifically.
that I know about tax advantage wise
that like firefighters specifically
as a group are entitled to beyond
just the general population.
Now we do have the opportunity
to take out our retirement funds
earlier than the general population.
There are certain provisions like we
talked about with the 457 and being able
to use three thousand dollars of that
every year tax free for health care.
So there are certain things like
that But really it comes down to
trying to reduce your tax liability.
If you're really trying to
do tax minimization, right?
Minimize how much money you
have to pay to the government.
It always comes out with your income and
then subtracting that by not having to
have taxes paid on, on that liability.
So really the ones that Louie and
I are familiar with and the ones
that most listeners listening to
this will have access to is it.
First and foremost is
retirement contributions.
So right off the shoot.
So your pension contributions or for
those West Metro members and other
people listening to this, if you're in
a 401 a plan those come out tax free.
All right.
Those are tax free.
So you're not taxed on whatever
contributions you have or
the department contributions.
There's also the four 57 plan
once again, but this would
have to be the traditional four
Louie: pre tax or traditional
contributions are Put in and you don't
pay taxes on those contributions.
So You know if you contribute on a
Roth basis to your 457 You're going to
pay taxes, but if you feel like you're
in a really high tax bracket and you
want to minimize Maybe a Pre tax or
traditional 457 or IRA is better for you.
That would help lower your tax bill,
Jon: Correct.
There's also the, what we talked
about a couple episodes ago was
a flexible spending accounts.
So whether it's for healthcare or for
dependent care, that's also another way
that those are pre tax contributions.
So you're not going to pay federal
and state income taxes on those.
So that will reduce your tax liability.
On top of that, there's
the health savings account.
Which once again west metro members
currently don't have this as an option
at least through our employer Our health
care plans are not high deductible
plans But you might be eligible through
your spouse or something else or if
there's other listeners that have a
health savings account That is once
again something that's going to be
done Pre tax, so you're going to reduce
your tax liability on that 529 plans.
Yeah the old 529
Louie: three boys and we contribute to
a 529 for each of them and it is a nice
little, it's a nice little tax break.
Not gonna lie.
Jon: So if you're wondering what
a 529 plan is, we haven't talked
about that on the pod yet, but that
is a savings vehicle for college.
So you use money for that.
It grows tax free.
And when you take it out.
Louie: on a distribution
Jon: comes out tax free.
So, but it can only be used for education.
So that's, that's the big thing with that.
And when you're talking about a tax
reduction, it's only for the state.
It's not federal.
So you're not getting federal
taxes, which is where the majority
of our income tax go to Colorado.
It's got a really low threshold, like 4.
4 percent is what our state
income taxes, but it's still 4.
4%.
And if you're going to save for college
anyways it's a really good way of
saving a little bit of money on that.
So that would be another potential
way to reduce your tax liability.
So those really the ones, you know,
offhand that we think about when we think
about trying to reduce your tax liability,
there's something that we'll probably
do closer towards around tax time.
When we actually talk more about
taxes, we'll have a tax episode,
but that depends on whether or not
you take a standard deduction or.
Or if you do an itemized deduction.
So that's basically right off the top,
whether you're single or you're married,
finally and jointly that the government
gives you credit for that will reduce
your tax liability by whatever amount.
So I can't remember what 2024
is, but it's almost 30, 000 for
a married couple right now, yep.
For a standard deduction
right off the bat.
So if you were going to make a
hundred grand and you did the standard
deduction and you're married finally
jointly, it'd be down to 70, 000.
Right off the shoot.
So we'll talk more about the difference
between standard deductions and itemized
deductions in a further episode, but
just know with the tax cut and jobs
act of 2017 they really, they reduced
a lot of the what was deductions.
deductible from itemized deductions.
And now it's over 90 percent of the
population just as a standard deduction.
So there's a lot to that, but we'll talk
about more about that in another episode.
So hopefully that gives you once again,
some framework is if you are trying
to reduce your taxes, there are plenty
of opportunities through our employer
benefits in which you can do that legally.
Louie: Yep.
Yep.
And I, and then, the second part of that
question is what about, you know, going
to white glove kind of service or a CPA
versus doing like a tax software, right?
Like TurboTax or H& R
Block has tax software.
I don't know what you do personally, John.
I, I do the software.
I do TurboTax.
Jon: do TurboTax.
Of course you do, Louie.
Of course you do.
Why wouldn't you?
Louie: and I've done numerous things
with taxes in terms of, trying to
do backdoor Roth IRAs at different
points and doing in plan conversions.
I've done some weird
things that have made it.
It is stretched the limit of the
software, but for most people, I would
actually say the software is very good.
It goes through the questions and it
goes through your unique tax situations.
And especially if you use the
same software year over year, it
kind of knows what you're doing.
So it knows like, Hey, maybe
you've done this and it'll ask you,
have you had any big changes this
year, employment status changes.
You know, have you been married?
Do you have children?
And it kind of holds your hand through it.
And I've found it to
be pretty good overall.
Now I've not used an actual person,
like I've not gone into an H& R
block and done my taxes that way.
The truth is that they use software too.
So they have you know, a little bit more
tailored software, but they kind of.
You have the same scripts and the
same questions that they ask you.
So if you feel like you need more hand
holding and you are really concerned
about your taxes or you have complex tax
situations maybe through like a divorce or
real estate that you hold or that you've
sold maybe you need a little bit more hand
holding and those could be good options.
But I have found for most people,
I think that the tax software does
a pretty darn good job and it does
try to maximize your deduction too.
So I don't know if you have
any thoughts on that, but
Jon: thoughts on that.
No, I think it's a very
individual decision and what
you feel comfortable with.
And I would say the majority of at least
speaking knowing our members in their
circumstances, the majority of them,
they would be just fine doing a TurboTax
or, and there's, seven different brands.
There's H& R Block has their
own tax software, TaxSlayer.
There's like.
all sorts of different ones,
and they're all pretty similar.
And you're going to spend
anywhere, probably like 80 to a
hundred bucks for the software.
But they will, line item got, Ask you
questions and it's all based on your
1040 on your tax return and what you
need to fill out And if you're one of
those people the 90 that does a standard
deduction I mean, you're not itemizing.
It's really not that
Louie: simple.
Jon: That being said though.
I have seen people make some big Pretty
significant mistakes on their tax returns.
And that's just one of those things that,
I think it depends on your circumstances.
But I think you should just, it's
like anything else, firefighters
or any of us still try to do.
We feel like we're experts or we
watched a YouTube or we stayed
at the holiday and express
Louie: or listen to a podcast
Jon: to a podcast or like,
oh yeah, all day long.
This whole backdoor Roth
that they were talking about.
Yeah, I totally did that.
And you just totally augured it in.
So that's one of those things.
if there's any kind of complexities, if
you're talking about selling real estate,
if you own a business, if you've got an
inheritance, there's all sorts of rules
that the IRS has that you got to stick.
You got their stickler for it.
And if you miss that timing on some of
those things, it can cost you dearly.
So, just be advised at that.
So once again, I think it kind
of, it's one of those, like,
Louie: maybe try it,
Jon: You know, I mean, one of those
things is there's nothing wrong with
doing it yourself one year, basically
printing out the form, taking it to
a professional, having them look over
and be like, yeah, no, this is perfect.
That way you at least know
you're on the right track.
So if your life is pretty much the same
year over year, over year, you've already
got that template and you already had
someone, a professional look over it.
Now, you know that you're
not missing anything.
You're not missing any deductions
that you should qualify for.
So.
All these other things.
And that way that might just give
you a little bit more peace of mind.
I have heard of people doing that.
Like, okay, I'm going to try
this out and then I'm going to
bring this to a professional.
I'm going to have them look over it
and be like, yep, no, it looks good.
I don't see any issues or
you've missed this on this.
You got to consider this and be
like, oh, okay, maybe I'm not ready.
Or maybe I'm not prepared.
Or maybe my circumstances are
a little bit more complex.
So just our little two cents on that.
All right.
Question three.
We've only got a couple of questions left.
All right.
I'm getting married next year and
discussing with my fiance, whether or
not to bring her on my insurance or
have her stay on her employer's plan.
I know we get great benefits here, but
it can be hard to understand exactly what
we get and what we're paying for and how
it compares to other corporate insurance.
How do we know what is a good deal?
How does it change with or without kids?
Also, is there other.
Ancillary options to buy into like Affleck
at what point did those become worth
spending money on so let's Kind of unpack
that and I'll save the the supplemental
Plans for a different episode because
that's something that Louie and I will
kind of talk about because there's a
lot of different things coming down the
pike for that but as far as you know
insurance and what's the best deal I'll
tell you this we've gone through it.
Louie and I sit on the executive board and
we look through other locals contracts and
see what other locals are paying as far
as health insurance and everything else.
West Metro has got a really
good plan, our 80 20 split.
So the employer picks up 80 percent
of the premiums and the member picks
up 20 percent is a pretty good deal.
I can just speak for, for myself.
My wife works for a major corporation.
Probably what you would think
of like a Cadillac plan, quote
unquote, for like health insurance.
And West Metro's plan is
just as competitive if not
better in some circumstances.
So I would say for the majority of
our members, not knowing, and once
again, this is very individualistic.
There might be some amazing
corporate plans out there
where they pay for everything.
My sister works for a government
in which they pay for everything.
They pay a hundred percent of
the premiums, but they pay a
hundred percent of the premiums.
Pretty good deal.
I would, I would sit there
and say like, take that one.
But if it's not then I think you just
kind of take the employer benefit
plans, you know, and every year in open
enrollment season, they'll give you a
list of what it costs as far as premiums
and then what your coverages are.
And then you just kind of have to
look through and see like, Oh, okay,
this is 80, 20, or this is 90, 10,
but this costs us much, what's the
deductible and just kind of analyze
what you want to look through.
The one thing that I will say,
I'm a huge advocate for our
insurance as For the most part.
Our members will stay here for 30 years.
It's a huge pain in the ass to switch
Louie: jobs.
Oh gosh, it's
Jon: like on a yearly basis.
Honestly, like if you have a
spouse or a partner or someone
else that switch jobs every couple
of years, huge pain to be okay.
What are we doing?
Is this United?
Was this Cigna?
Was this someone else's plan?
Like, where can we go?
Is this in network?
Is this out network?
You know, so sometimes it's just
the convenience of knowing the plan
and knowing what, you know, what
providers will take the insurance
and everything else like that.
So I'm a huge fan of keeping
things simple and easy.
And even if it costs you another 10
a month, like that ease of use and
not having to transport those plans
and get people re enrolled is huge.
Louie: a lot of time savings
there that you get and you
have to put a value on that.
And I, you know, John, Caitlin
works for a big employer too.
And so we've had this conversation and
what we do is we look at the price of
her insurance versus the price of ours.
And they're pretty competitive.
And I know when we look at it in
general, I, this is not true for
everyone, like you said, it depends
on the employer, but it costs a lot of
money when you put someone on your plan.
And that's a spouse.
And it costs even more money when you
put someone, when you put dependents
on there, your children on there.
So for us, and for a lot of people,
it, if it's a good health insurance
plan, it might make sense to have.
you on the, the firefighters insurance
plan, the insurance plan that we
get, but maybe have your spouse on
his or her insurance plan through
their employer, because those are
heavily subsidized very often.
That's how it's been for us.
It doesn't make sense to
bring Caitlin over to my plan.
So we have her on her plan.
Then we had to decide what to
do with the children, right?
Because that adds a lot.
So I just look at the price, every
employer will give you what's
called a health benefit rate form.
And that kind of shows you what the
price would be per pay period and
per month for you as an employee
to have the health insurance.
Also, to have a spouse on your health
insurance and then also to have
children or to just have children.
And so we look at that and
we compare what's cheaper?
Is it cheaper to have
them on mine or on hers?
So that is one thing to consider
Jon: it doesn't have to
be all or none, right?
You can elect different coverages based
on the employer's plan and who, and
like you said, which, which makes the
most like financial, economic sense.
And then same thing.
If you, if the other person plans
on probably being at that employer
for awhile, it just makes ease
of use and then you move forward.
So the other thing is if you ever
lose coverage because of a loss of
employment, that gives you a change and
will allow you to, you know, basically
enroll in our insurance as well.
So there are always those, I'm
trying to remember the specific term,
like life changes or it's something
like that, that allow you to, it's
always like the birth divorce or
separation of service, something like
that, that allows you to then get
on your spouse's or partner's plan.
Cause they want people to be covered.
Louie: Right.
And then the other thing that
we consider when we're making
this Plan is like the benefits.
So there's like a health plan summary form
that our HR provides us every year and My
wife's employer provides that to her too.
So we'll compare those like what
are the out of pocket maxes?
What are the deductibles?
What are the what's covered what's not
covered and then we'll make sure that
they're fairly comparable So we always
consider that when we're choosing is
she going to come to my insurance?
Is she going to stay on hers?
And then one of the biggest things,
and we talked about this a couple
episodes ago, is maybe your spouse has
an option for a health savings account.
And that is the case with my wife.
We really like the health savings account.
We talked about that, the triple
tax advantage that it brings.
It's a great retirement savings vehicle.
And so we don't want to give that up.
So we have on her insurance so that we
can qualify for a health savings account.
And her employer will actually match
some contributions and give her like
little, I think they call them like
rewards where they basically put in
money into that health savings account.
And so we don't want to give that up.
We really liked that.
We think that's very valuable
and Caitlin is very healthy.
So the high deductible health plan that
she needs to qualify for the health
savings account works perfect for us.
So I put the children on my health
plan, Caitlin stays on her plan.
We're able to get the health
savings account and we're able to
save money because her employer
subsidizes that health insurance.
And then the kids who have a
bunch of doctor's appointments and
are more likely to get, sick and
need stuff or get hurt they're on
mine, which is a really good plan.
So that works well for us,
but we just compared, we
compared the benefit coverages.
We compared the The plan rates and
then we made the decision for us.
And I, I would encourage everyone
to do that is look at your options.
Don't just compare the dollar amount
that you pay in the premiums, but
also compare the out-of-pocket
max and the deductibles and then
Jon: Coverage is in network, out
of network, all those other things.
There's a lot of, nuances with
this and, we could speak for
hours on health insurance,
Louie: Mm-hmm . Just
Jon: how complicated it can be.
I think we're in whatever episode
five or whatever of these things now.
And I think you've definitely seen
the theme is it's really tough to
just speak in such general manners
because everyone's circumstances is
going to be different, is going to be
Louie: broken record for saying that.
We're just trying to tell you guys,
like there's, it's hard for us to answer
a specific question for a specific
individual without knowing all of
the things that are available to that
person or that they're going through.
Or yeah.
Yeah.
Jon: so hopefully that that
helps the listener at least just
help frame that or navigate the
complexities of health insurance.
All right, last question that we're
going to handle today is Roth versus
traditional income break over points.
I'm going to be hovering the line between
the 24 percent and 32 percent difference.
Tax bracket, depending on my deductions.
So I'm leaning more towards
traditional at the moment, but
wanted to hear your opinions.
So this going into when we talked about,
last month's episode, the four 57 and
talking about the difference between
traditional or pre tax contributions
to your four 57 or doing a Roth or
after tax slash post tax contributions.
So this is one thing that I don't think.
Most people understand how taxes work,
generally speaking, in the United States.
The tax system is a
progressive tax system.
So basically, the more money you make,
the more income that's taxable, the
higher rate of which you're gonna pay.
And those are different phases.
talking about This year there's what
is there seven different brackets?
There's the 10%, 12%,
37 percent tax brackets.
So you can't just sit there
and go like, okay, cool.
I made 300, 000 a year.
I know.
That's going to put me if I'm married
finally and jointly, that's going to
put me in the 24 percent tax bracket.
I can just take 300,
000 multiply that by 20.
Point two, four, that's going to
give me how much I'm going to owe
the federal government in taxes.
It doesn't work that way.
I don't know how many times I've
had people try to understand the
taxes and like, okay, this is
how much I'm going to pay in tax.
And it just
Louie: it never yeah Never
works out how people think it
Jon: Yeah.
So there's two different key points
that you think about, or if you ever
do a TurboTax or something like that,
it will tell you two different things.
It'll tell you what your marginal
tax bracket is, which is what this
listener question is all about.
And then there's also
something called the effective.
And that's basically what
you ended up paying taxes on.
That's yep.
That's when you took all your money,
took all the deductions, and then you
divide that by how much you had in taxes.
That will tell you what
your percentage was.
So even if you are in the 24 percent
or in this case, the 32 percent tax
bracket, your effective tax rate
is never going to be that high.
It's significantly lower than that.
this decision really,
it's one of those things.
it always depends broken record.
Me personally.
When I look through this, though, I
would say that any one general rule of
thumb, like 24 percent is still a pretty
low rate, historically speaking, we
don't know where taxes are going to go.
Most prognosticators that will tell
you based on our budget deficits
and the amount of money that the
federal government has been borrowing.
Taxes have only one way to go.
Only one way to go and that's up
so I am of that belief as well So
I think 24 is a reasonable tax rate
And if I was in that tax bracket me
personally in my family situation,
I would do the roth contribution.
I just
Louie: would too.
Yeah, I think you're right.
It's it's hard to know what's going to
happen in the future tax rates could come
down But if you look historically they're
at Like all time lows like they're really
low And so I think john you have the
same theory that I do as well With all
this blowout spending that we're doing.
It doesn't matter who the president
is or who controls Congress.
Both sides are just blowing out the budget
in, in levels that have historically
only been used during times of war.
That's every year.
That's every year.
At some point, I feel like.
That has to come due that tax bill is
going to come due and they're going to
have to increase income tax rates in order
To meet those needs I might be wrong.
It might not happen in our lifetime
Who knows but I just like knowing what
i'm paying on my tax rate So if I know
that i'm at the 24 marginal tax bracket
Boy, that seems like a pretty good
deal I'm gonna pay those taxes now and
the way you pay those taxes now is By
contributing to a Roth account, like
a Roth 457 or Roth IRA, you pay the
tax bill and then it doesn't matter
what the tax rates are in the future.
You've already paid those
taxes and you can withdraw that
money tax free, so to speak.
So, in general, my gut is to always
be like, man, getting in, locking
in those tax payments now through
Roth contributions is the way to go.
But
Jon: Yeah.
And you're talking an 8 percent
difference between the 24 and the 32.
That's a pretty big threshold
versus like 22 versus 24.
You're talking 2%, not really
significant, but the 24 to 32 is really
where you start to hit the break over.
people that I talked to that are
in the 30%, so 32, 35, 37 percent
brackets, I tend to be more of a pre
tax person, save that money pre tax.
And then in retirement, once again.
Most of us hopefully will retire somewhere
between, you know, 55 to early sixties.
You're going to have, you know, almost
13 to 14 years or more before required
minimal distributions are going to happen
where then you can, so you can do Roth
conversions, which we will talk about in a
whole other episode because firefighters,
police officers retire early.
We have an opportunity to do some of
those conversions and that can save
you a ton of money in the future.
So we'll talk about
Louie: And, and also, just, you can
look these tax rates up and also the,
the income that, that you have to
qualify or that you have to make in
order to be in those tax brackets.
But just so we're clear, the 24
percent tax bracket, if you're married
and you're filing jointly, the 24
percent marginal tax rate covers your,
income from 201, 000 to 383, 900.
So, in order to get to the 32
percent tax bracket, you have
to start making over 384, 000.
that's pretty high.
Not so high if you're married
to a, PA, let's say, or a
doctor, but what's up, Joel?
What's up, Max?
But if you are not in that really
high income, I would consider that
a very high income then you're
probably in the 24 percent or 22%.
Pretty good tax rates
at that, at that point.
So.
Jon: Yeah, and something that we talked
about a little bit with the 457 plan
is not this year, so not 2025, but
starting in 2026, at least for West
Metro folks, we're going to have the
option to start splitting contributions,
so just, split it down the middle.
50 percent is going to go pre tax, 50
percent is going to go post tax, so
that's something that's going to happen.
All right, so those are the, Listen
to our questions for this episode, and
then we're gonna, we're gonna end the
episode with some breaking news, if you
will, and this is something save the
best for last, if you will, but this
is something that is probably the most
significant changes to firefighters,
police officers, teachers, when it
comes to retirement and social security.
In about the last 40 years.
All right.
So I know a lot of our members, a
lot of IFF members have been getting
emails, basically saying reach
out to your congressional members,
congressmen, senators, and tell them
about social security fairness act.
All right.
So there's a lot of movement going on.
If foot right now with this, and this
is the best opportunity to repeal this
provision basically in the last 40 years.
So I'm going to talk about the
two provisions really quickly.
I want to really save a lot of the
topic of conversation for this, because
I'm hoping next month to report back
that we're going to have some news
that we can talk about them repealing
this, but I want people to just have
an understanding of what this is.
So if you are a, if you are someone that
works and you get a non It's basically
what they call a non covered pension.
All right, so you're not paying
into social security Which is
about two thirds of firefighters
police officers and teachers don't
pay into social security, right?
I think most of us understand that but
I think we still think like we're going
to get some kind of social security
Benefit at the end if we've paid into it
before we'll get something like I know
just talking to some recent retirees
They had zero idea that there would
be some type of reduction And social
security benefits for them Because
they had this non covered pension.
So there's two different provisions
that this that they're trying to repeal
with this social security fairness act.
So one of them is called the
windfall elimination provision.
It's also called the WEP.
This is something that's been
around since 1983 is when it got
enacted, but basically the windfall
elimination provision, or the WEP, is.
Is a provision that will reduce
a certain amount of your social
security benefits if you don't have
enough substantial earning years.
There's a lot, that's a big
Louie: it's all, it's
a lot, it's a lot to go
Jon: a lot to think about, but
this is something that a lot of our
members are going to be subjected to.
If you work at a part time job,
if you're self employed, and let's
say you make 15 or 20 grand a year.
Louie: if you had a different career
before you became a firefighter,
which a lot of our guys do,
Jon: You worked eight, 10, 15, 20
years in the the private sector.
So you've been paying
into social security.
So you have all this money.
So what is, how does all this stuff work?
So basically if you have less than 20
years of substantial earning years,
and we can put this on the Instagram
page, this was probably good for like a
reference point, but there's a certain
amount that That the IRS comes out with
every year, basically saying that you
have to make a certain amount of money
for it to be considered substantial
and you're giving credit for that year.
So that's not to be confused with
just qualifying for social security,
because those are two separate
things, which is 40 credits.
So basically you can get.
Up to four credits per year and
that's based off a certain amount.
I think I looked it up in this year,
2024, in order to get one social
security credit, you had to at least
make 1, 730, pretty low threshold.
So, you know, if you made
7, 000 in a year, you would
qualify for social security.
Credits on four credits
worth in that one year.
So many, in order to qualify for
social security as a benefit, you
have to have at least 40 credits.
Most of the time, it's about
10 working years worth of
contributions to social security.
to get something at the end to get a
benefit, which a lot of our members
will have just through side jobs.
You started working something
when you're 16 at Chick fil A
and you start paying into this.
Most people will probably qualify
or will have something that they
should at least get some kind
of social security benefit for.
So and the way that social security
works is it's meant to replace.
it's supposed to be a higher
percentage for lower income earners.
So the the thing I want you guys to
remember is social security really is
meant to be for a higher replacement ratio
For lower income earners versus higher
income earners So and this is why this
Louie: affects,
Jon: You know, firefighters, teachers,
police officers that have a second job
and are making, you know, what would be
considered a lower wage because that's
not their primary earnings, right there.
This is, they're doing it as a side work.
So what the windfall elimination
provision does is instead of using
that 90 percent factor for that first
job, 1, 100, let's call it 1, 200.
It's going to give you a factor.
If you have less than 20 years of
substantial earnings, it's going
to give you a 40 percent factor.
So you're not going to get, you're
not going to get that 1, benefit.
You're only going to get 40 percent
of that 1, 100 or 1, 200 benefit,
which is huge, you know, and that's
a lot of our, a lot of our members.
So for 2025 or 2024,
Louie: 2024.
Jon: I think it ended up being
like, it could reduce your social
security benefit up to 590.
So if you were going to get, 1, 100, well,
you're going to subtract 590 out of that.
And that's what your net benefits going
to be, which is pretty substantial.
And there's a lot of philosophicals
wise and how they got to where they are,
but it's something that, when they talk
about fairness, they say, well, that's
not fair because I qualified for that.
I earned that money.
So why am I getting.
That reduced because I have another
job in which I'm getting a pension for.
Yeah.
Louie: Yep.
And I think that the biggest takeaway,
and I know that's a lot of high
level financial conversations that
we're having here, but at the end
of the day, just to kind of simplify
people that have paid into social
security through another career, part
time job, like John said, they are
getting penalized because they now are
in a career where they have a pension.
So even though we don't pay into
social security now, we think it's
unfair that you are being penalized.
Your social security benefits
are being penalized because
you now have a pensionable job.
If you paid into it, in a past career or
through part time work or something, we
think that you're entitled to that social
security benefit and the international
association of firefighters thinks that
you are also entitled to that benefit.
And so we don't want to see
our members have reduced.
Social Security benefits that
they've worked hard for and
Jon: Social security benefits that they've
Louie: they've earned.
So this this is not to try to get us a
new benefit because we're firefighters.
No, all we're trying to do with this
Social Security Fairness Act is give
our members what's due to them when
they've paid into Social Security.
It's not right that we are getting
penalized because we now have a pension.
If we've earned the Social
Security benefit, Then we should
get that social security benefit.
That's what this whole act is about and
there's you know, there's the windfall
elimination provision I don't know how
deep you want to get into it But it it
basically is the same thing if you if
you have a spouse that worked in and
Jon: Oh, you're talking about
the GPO, the government pension
Louie: right.
I'm, sorry the government pension offset
if you have a spouse that's worked into it
you also get penalized and you're not able
to collect because you have a Yeah, and
Jon: And this is, yeah, and
this is one of them, honestly.
So just to go back just a hair, so how
many people does this actually affect?
So according to the social security
research and what they publish, it's about
two point, I think the last one was 2.
3 million people is who it affects for the
WEP, the windfall elimination provision,
the GPO, the government pension Offset.
It's a smaller subset of the population.
It's only about 750, 000 people that
it affects, but honestly, I think this
is going to affect firefighters and
our members more than the windfall
elimination provision, because what
we're seeing right now is a lot more
dual income earners that we're hiring it.
the days of having someone stay at home
and not have another income at some point
in their career, those are going away.
And the majority of the members
Louie: like in the
denver metro area, right?
Like you gotta
Jon: really tough to afford
it on just one income.
So what this does is, and this is,
I'm speaking from personal experiences
is Louie would be affected from this.
I know a lot of our members who have
come up to me and they're like, man,
this really sucks, but so how the
government pension offset works.
So, I'll use, we'll just
use a a hypothetical.
So you are married to someone
that was a high income earner,
whatever profession they had.
And let's just say that their
benefit your spouse's benefit was
going to be 4, 000 when they reached
the age 67 full retirement age.
Right.
You will allow to claim as the, as
their spouse, half of their benefit
once they start drawing on that.
So I would be or whoever this hypothetical
firefighter would be entitled to 2000 or
50 percent of that 4, 000 benefit, which
is a lot of money, which is significant.
What the GPO does is it, Takes
your pension and then it takes
two thirds of your pension.
So once again, let's just say,
hypothetically here I was going to
be entitled to, let's say it was
a 60, 000 a year pension, right?
So I'm going to be
getting 5, 000 All right.
So that, so two thirds of 5, 000, I
probably should have used something
that was a little bit more, it's going
to be a little over what call it?
Three grand ish.
It's going to be a little over
Louie: 300.
Jon: Yep.
So in that circumstance, My spousal
benefit would have been 2, 000
from social security from my wife.
They're going to take two thirds of that
5, 000, which is 3, 300 because that 3,
300 is higher than my spousal benefit.
I ain't getting
Louie: getting shit, I'm getting
Jon: I'm getting nothing.
And that is where a lot of
our members are going to be.
They're not going to be entitled to any
spousal benefit because they have a non
covered pension through social security.
You didn't pay into social
Louie: though if they were in this
exact same situation, but they
weren't firefighters, they were
just in a regular job or something,
they would get that benefit.
They are entitled to that benefit.
So it's really like this, penalty
that is unique to our profession
and it just, it's not fair.
It doesn't, it's not right.
Jon: And so that's where,
so that's where it stands.
So, in a historical vote it
got through Congress and it was
like 300 congressional members
Louie: lot of bipartisan support
both sides of the aisle, one
Jon: of the biggest things that's
gotten through Congress in years.
And now it sits with the Senate.
And we just had so today's December 12th
We had a lot of different union members
go out to washington yesterday, december
11th Old ed zode kelly was there at the
foot of the capital our own principal
Louie: Even more important.
Reid and Mike Mul
Jon: We're out there representing the
membership in the iff And showing a a
form of solidarity the teachers unions
were out there the police officers unions
were out there Basically just saying
like right now it sits with the senate.
We just want you guys to call a vote
You Just tell us if you support it
or not, if you support us or not, put
it on the floor and God bless Chuck,
Chuck Schumer came out there in the
driving sleet in Washington, DC and
said, we're going to call it to a vote.
So sometime between now, December 12th
and December 20th, which will be the last
day that the congressional members meet.
They're going to vote on it.
So we will have, I will promise you
this in our January episode, we will
have a report back to say whether
or not this thing is repealed.
And honestly, there's a lot of
people on the fence right now.
This is the difference
between being able to retire.
Maybe now or I'm gonna have to work
another couple of years because I was
not planning on this But now this thing
came into play and now I'm gonna get this
benefit it's huge from a planning aspect
from all sorts of different things So
there's a lot of people that are staring
down the barrel right now of retirement
that are you know Intimately focused on
where this is and also our retirees that
are not getting the benefit right now This
could be life changing money for them,
moving forward So we just wanted to at
least bring that to everyone's attention
and it sounds like the vote is going to
get called we will report back here in
january to see whether or not The social
security fairness act has in fact passed
if it goes to biden, he'll sign it.
He's going to sign it so we'll
just see what happens with
Louie: keep our fingers crossed
Jon: our fingers
Louie: hope.
You guys might have seen emails from
union emails that talk about COVID.
Making phone calls and stuff like that.
So whenever those emails come out and
you can support by sending an email or
Jon: Make it a phone call.
Louie: leaving a voicemail, that does
help because if, if we flood those
senators or congressmen's inboxes with
tens of thousands or hopefully hundreds
of thousands of emails, Calls and emails
then all of a sudden they know wow we have
a our constituents really are they care
about this They're passionate about it.
So it looks good, but I think the
bigger takeaway About this whole
conversation that we just had is that
your union is looking out for you We
work really hard at local 1309 to make
sure that our members are taken care
of and that happens at the local level
With our You know, things that
we fight for and work with our
management to secure for you guys.
It's at the state level when
we do lobbying and get involved
in elections and stuff.
And then it also happens
at the national level.
We big thanks, big shout out to Mike
and read who had to, travel to DC and,
Jon: C.
They're out there because they care about
Louie: there because
they care about you guys.
That's honestly, truthfully, I know it
sounds cheesy, but they care about you
guys enough the members of local 1309
and firefighters everywhere, right?
Every, every firefighter in the
CPFF and every union firefighter,
they care about them enough that
they're out there given their time to
Make it known that this is a concern
make it known to our politicians
that this is something that we
care about and that we think is
unfair and that we want to change.
So we're fighting for you guys.
And I know, that I know our members
know that we just want to harp on it.
We just want to toot our own
horn, I guess, because we think
that this can make a lifesaving
difference to a lot of our members.
And we know you guys work hard
for your money and we want
to help you keep more of it.
So this
Jon: was thinking about, I was
trying to do the math on that.
So, you know, it's always like how
much effort I'm going to put in,
sending one email, like literally
takes less than 15 seconds.
Cause it's already auto generated.
And I was trying to think
about my circumstance.
If I was going to be entitled to that
1, 500 a month for 30 years, cause I'm
going to collect, I mean, I'm like, You
Louie: to make that email.
I got to send that
Jon: got to send that email.
So yeah, well said Louie.
And on that last note, I think the
last closing I guess a point of
personal privilege would be is to
we already talked about, being the
holiday season and thanking all those
folks around us and being grateful.
One of the things that I know I
speak for myself and Louie and all
the other executive board members
of 1309 and really firefighters
across the nation is Mike Frenier.
And his service he just had his ringing
out last Saturday, his retirement parties
coming up on this coming Saturday 38
years of service to the, yep, to the
citizens and the members of West Metro.
And has been a strong
advocate for unionism.
He will continue to serve with the
ninth district for the next four years,
representing all those glorious States.
And just a huge thanks to Mike.
I can't imagine how much
time has been missed.
From his family and his endeavors to
try to better the organization, not
just West Metro, but at the state
level and now at the national level.
And well done.
Well done, sir.
We're super proud of you.
I'm sure hope we'll see him around
and that's a long episode guys.
Hopefully some of that was lighthearted.
There was some good questions.
Hopefully that will help
lead to more questions.
That's what we're doing is we'll just.
Through through this, we'll get
better educated and make better
decisions and hopefully get to
enjoy those prime golden years
Louie: sir.
Jon: sooner rather than later.
So happy holidays to everyone.
Thanks Louie, as always for being
my partner in this endeavor.
Thanks for all the members
who have reached out.
It really does bring Louie and I
a lot of personal satisfaction and
motivation to continue on with this.
So thanks to everyone.
Happy Holidays.
Louie: Merry Christmas and
we'll see you in the new year.
The Fiscal Firehouse Podcast is
a podcast curated specifically
for local 1309 members.
This podcast is for informational
and educational purposes only,
and should not be construed as
professional financial advice.
Should you need professional
advice, consult a licensed
financial advisor or tax advisor.
The opinions of John Beatty, Louie
Barela, and their castmates are
solely their own, and don't reflect
that of West Metro Fire Rescue.