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.
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.