10 Reasons California First Responders Need to Start Retirement Planning Now

california first responder retirement planning

Listen up, heroes. You’re out there saving lives, but who’s saving your future? It’s time to turn that courage towards securing your golden years. Here are 10 hard-hitting reasons why you need to start retirement planning now, especially if you’re a California police officer, firefighter, or married to one.

1. Your CalPERS Pension Isn’t a Golden Ticket

Sure, you’ve got CalPERS. But let’s get real – it’s probably not enough. With California’s skyrocketing costs and longer lifespans, that pension might leave you eating ramen instead of enjoying oceanside dinners. Starting early means you can build a fat stack of cash to supplement that pension and live the California retirement dream [1].

2. Compound Interest is Your Secret Weapon

Every day you wait is money left on the table. Start investing now, and you’ll harness the power of compound interest. It’s like having a financial SWAT team working for you 24/7. Your money makes money, which makes more money. In high-cost California, you’ll need every penny [2].

3. Long-Term Care Costs Will Blow Your Mind

In California, the median annual cost for a private room in a nursing home was $137,240 in 2021. That’s higher than a lieutenant’s salary! And it’s before the sky high, accumulating inflation! Planning early means you can get better rates on long-term care insurance and avoid bankrupting your family if the worst happens [3].

4. The “4850 Time” Benefit Can Trick You

California’s Labor Code Section 4850 gives you up to one year of full salary for job-related injuries. Sounds great, right? But it can mess with your CalPERS calculations. Plan early to understand how this impacts your long-term financial picture.

5. Deferred Programs: Use Them or Lose Them

Some California cities may offer Deferred Compensation Plans for police and firefighters. It’s like found money, but only if you plan for it. Don’t leave this cash on the table because you didn’t think ahead.

6. California Taxes Will Eat Your Lunch

Unlike some states, California fully taxes pension income. Yeah, it sucks. But if you start planning now, you can use strategies like Roth IRAs to keep more of your hard-earned cash [4].

7. The California Housing Market is Brutal

You might be considering downsizing or relocating in retirement. Or maybe you want to stay put but tap into your home equity. Either way, you need a plan. California’s real estate market doesn’t play nice with the unprepared [5].

8. Your Family Needs a Hero at Home Too

You’re a hero on the job, but your family needs you to be their financial hero too. Planning early, including long-term care, means you’re protecting them from potential financial devastation. It’s like putting on your vest before heading out on patrol – it’s protection for you and your loved ones [6].

9. Early Retirement Might Be Calling

Many California public safety officers can retire earlier than the general population. Sounds great, but it means your savings need to last longer. Don’t let poor planning cut your retirement dreams short.

10. Inflation in California is a Silent Killer

That $100 bill in your wallet? In 20 years, it might only buy you a fancy coffee in San Francisco. Inflation in California is no joke. Starting early gives your investments time to outpace inflation, so you’re not left scrambling when prices skyrocket [7].

More Planning Now = More Beach Later
Now, let’s talk strategy…

1. Understand Your CalPERS Benefits
Review your annual member statement. Know your projected benefit and identify gaps. CalPERS is your foundation, not your whole house [1].

2. Leverage Your “4850 Time” Wisely
If you’ve used or anticipate using “4850 time,” get expert advice on how it affects your retirement calculations.

3. Explore Deferred Compensation Programs
If your department offers  deferred compensation programs, learn the ins and outs. Go over them with your trusted financial advisor. It could be your ticket to a fatter retirement account.

4. Get Smart About California Taxes Consider tax-advantaged accounts like Roth IRAs. Consult with a tax pro who knows California’s tricky tax laws [4].

5. Plan Your Retirement Housing Now
Whether you’re staying put or moving, start researching options. If you’re considering a reverse mortgage, get educated on the risks and rewards [5].

6. Lock In Long-Term Care Insurance
Look into options like NPFBA while you’re young and healthy. Learn your LTC Essentials (Firefighter LTC Essentials) (LEO LTC Essentials) to protect your assets.

7. Protect Your Spouse Too
Understand CalPERS survivor benefits and consider additional long-term care coverage and life insurance to fill gaps.

8. Use Your Union/Association Resources
Check with your local union or association about retirement planning seminars or available resources. They know your unique situation.

9. Factor in California’s Cost of Living
Use retirement calculators that allow you to input California-specific expenses. Be realistic about costs [8].

10. Start NOW
Every day you wait is money lost. Don’t let procrastination be the reason you can’t retire on your terms.  If nothing else, get on our mailing list to learn something new about bulletproof abundant living every week. 

Bottom Line: You wouldn’t go into a dangerous situation without a plan and backup. So why would you approach retirement any differently?

Starting early gives you the firepower to build a retirement that’s worthy of your service. It means family vacations that create lifelong memories, not financial stress. It means enjoying your golden years, not worrying about how to pay for care if your health declines. Your Life – Your Plan, and More Plan = More Beach!

And let’s talk about that long-term care plan for a second. It’s not just about you – it’s about protecting your family’s future too. Without it, a health crisis could wipe out your savings and leave your loved ones struggling. With it, you’re ensuring that you’ll get the care you need without bankrupting your family.

So here’s your call to action, heroes: Start planning now.

1. Talk to a financial advisor who understands the unique challenges and opportunities for first responders.

2. Get that long-term care (LTC) coverage locked in while you’re young and healthy. Better yet, get the one that’s designed for you. For California’s Firefighters and Law Enforcement Officers and their spouses, NPFBA offers an amazing program ( learn more or apply here).

3. Strive to learn something new about retirement, personal finance, and bulletproof abundant living every week. Get on our email list and we will deliver it directly to your inbox.

Remember, every day you wait is a day you’re leaving money on the table and putting your future at risk. You wouldn’t hesitate to run towards danger to save someone else. Now it’s time to take that same decisive action to save your own financial future.

Your community counts on you every day. Now it’s time to count on yourself. Start your retirement planning today, and secure a future that’s as brave and bold as you are. You’ve earned it.

 Sources & Resources

 (The cost of living data for CA may shock you!)

[1] CalPERS. “Your CalPERS Benefits.” https://www.calpers.ca.gov/page/active-members/retirement-benefits/service-disability-retirement
[2] SEC. “Compound Interest Calculator.” https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
[3] Genworth. “Cost of Care Survey.” https://www.genworth.com/aging-and-you/finances/cost-of-care.html
[4] California Franchise Tax Board. “Pension and Annuity Guidelines.” https://www.ftb.ca.gov/forms/2020/2020-540-booklet.html
[5] California Association of Realtors. “Housing Affordability Index.” https://www.car.org/marketdata/data/haitraditional
[6] NFPA. “U.S. fire department profile.” https://www.nfpa.org/News-and-Research/Data-research-and-tools/Emergency-Responders/US-fire-department-profile
[7] California Department of Health Care Services. “California Partnership for Long-Term Care.” https://www.dhcs.ca.gov/services/ltc/Pages/CPLTC.aspx
[8] Missouri Economic Research and Information Center. “Cost of Living Data Series.” https://meric.mo.gov/data/cost-living-data-series

Ready to Armor Up Your Retirement?

Reach out to NPFBA for a no-BS conversation about long-term care coverage or apply now. It’s the backup you hope you’ll never need, but you’ll be dang glad to have when you do.

Let’s get a plan in place that’s as robust and reliable as you are. Because your commitment to protecting others should be matched by a rock-solid plan to protect yourself.

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If you have questions about long-term care coverage or how NPFBA can help serve you, feel free to reach out to us via our website, phone, email or schedule a zoom meeting and let’s grab some face time!

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