RETIREMENT PLANNING 101

By Martha Chapman

IN YOUR 20'S? 30'S? 40'S?

IT’S NOT TOO EARLY TO START PLANNING

I’ll bet family and friends outside the fire service rib you a lot about your pension. You know, the big fat pile of money you’re going to be eligible for in your 50s, way ahead of them, and no questions asked.

Next time this happens, you might want to suggest they sit down with you, so you can explain that retirement for firefighters is more complicated than they think. Because it is.

That’s thanks to the dozens of variables affecting your retirement. A host of considerations make anyone’s post-work plans complex. But add in your profession and it becomes a true Tetris game. Here are some pointers to get

you started – even if you are in your 20s.

THE STUFF EVERYONE HAS TO CONSIDER:

How do you see your retirement? A quiet life at home, getting your garden into shape and taking up a new little hobby? Or could your “new” lifestyle be a lot more expensive as you pursue your favorite sport(s), travel extensively or split your new life between two homes?

And other options may have their eye on your bank account, including subsidizing grandkids’ university tuitions or helping your own parents age in place. Another consideration for some retirees is moving to a cheaper part of the country or even overseas.

What can you expect to add to your pot of pension money? Bear in mind the prospect of your partner’s own pension. Depending on where you live you may be eligible for a government pension on top of your work one. Perhaps you can reasonably expect to come into an inheritance (though that one is always best left in your daydreams as it may not be as much as you think – or may be eaten up in taxes and fees).

A good place to start is by considering what you’ll need/want moneywise for retirement. Most pundits suggest that 70 to 80 per cent of your pre-retirement income is a good target. And remember that this income may have a host of sources such as work pension, government pension, rental property income, investments and more.

There are some very handy retirement calculators available online including the one at forbes.com.

THEN ADD THE FIREFIGHTER STUFF:

Firefighter pensions vary wildly depending on where you are. Many don’t kick in 100 percent until you have worked a minimum number of years (often 20 or more). Some allow you to retire early with a reduced pension payout.

Do you have a side gig that you plan to hang on to, keeping the money coming in? It’s no secret that firefighting is a tough job mentally and physically. Will your health care needs and costs escalate once you leave the firehall and its umbrella of security?

SO: WHAT’S THE GAME PLAN?

First, determine with your employer/ pension company when you can retire and what your pension will be.

If you are not already contributing to a retirement savings plan, run, don’t walk to your nearest bank, financial planner or investment house and speak to an advisor about setting up a plan. There are few pension programs that will subsidize us 100 percent and against any unforeseen circumstances.

Think about where you are now debtwise, apart from a mortgage. If it’s a complicated concern (or even worse, a nightmare) consider consolidating your debt into one monthly payment. Much better for peace of mind, and cheaper than piling everything onto your credit card. At time of writing, for example, Wells Fargo’s consolidation loans are available at rates as low as 5.74 per cent.

Look at using the services of a certified financial planner – recommendations by friends, family or colleagues are a good place to start. A planner will take a detailed snapshot of your current situation and goals and make recommendations based on your age and risk tolerance (no surprise: the older you are, the lower your risk tolerance). Don’t be embarrassed about asking the planner how they make their money: some work on a fee basis (paid by you) or commissions (paid by the investments they recommend).

It’s never too early to get in the habit of setting aside money for your

own retirement each month: many experts recommend that along with your household budget you establish a pension fund. Set it up so that the money goes automatically into your retirement account: that way it won’t burn a hole in your pocket and it won’t even seem like yours – until you get that nice statement at the end of the year.

FUN WITH CREDIT CARDS

The median interest rate the cards are charging these days is an eyewatering 20 per cent, so you want to be sure to pay these bills in full each month. Keep things simple and try not to have a wallet full of cards: two major ones should suffice. Set them up so that on the day the payment is due it will automatically be withdrawn from your account. That saves you from having to remember (even when you are on vacation). Get extra smart and put monthly household expenses such as phone/internet, streaming services, electricity etc. on your credit card too. That way those bills will be automatically paid too, and you’ll be earning an excellent credit rating while collecting points, miles, or whatever your card is dishing out – for free!