Four Tips for Financial Freedom
Law enforcement officers (LEOs) often face extreme pressure and stress that can take a toll over time. So it’s not surprising that many law enforcement officers begin counting down the days until they can retire. If you’re considering an early retirement from the department, you’ll want to make sure you’re financially prepared. The following tips can help
Tip #1 – Understand your pension benefits.
Pension benefits are becoming more and more uncommon in the general workforce as employers shift the responsibility of investing for retirement to employees. Fortunately, most police departments continue to offer pension plans for LEOs. It’s not uncommon for police officers who have been working for the department for 20 years to retire with a pension equivalent to 50% or more of their salary. But that likely won’t be enough to fund your desired lifestyle throughout retirement
In order to answer this question, you’ll need to have an idea about what your monthly expenses in retirement may be. Your wealth manager can help you estimate your monthly expenses in retirement by taking into account your current financial situation, future retirement expenses and retirement goals. You can then compare these estimated expenses to your anticipated pension benefits in order to identify any potential savings gaps that will need to be filled
Tip #2 – Save and invest for the future.
If you have a goal of retiring early, you’ll likely need to supplement your pension benefits with additional savings. Saving and investing through a variety of retirement accounts throughout your working years can help ensure you’ll have enough to fund your lifestyle in retirement. Consider contributing toward the deferred compensation plan offered by your department, such as a 457(b) or 401(k) plan, as well as to a traditional and/or Roth IRA. Your wealth manager can help you establish a smart saving and investing strategy to set you on the right track
Tip #3 – Consider a second career.
Perhaps you’re ready to retire from the department but don’t want to give up working completely. Usually, those who opt to retire early must at least take on a part-time job to achieve their desired income. Many LEOs choose to pursue second careers in education, sales or other fields. No matter what your passion, retiring from the department provides a great opportunity to pursue new career interests.
Tip #4 – Have a financial plan in place.
Having a financial plan in place is essential to identifying, implementing and achieving your retirement strategy. Your comprehensive financial plan serves as a map toward accomplishing your goals and living your desired lifestyle in retirement. It should incorporate all aspects of your financial life, including investment management, estate planning, tax planning, insurance planning, retirement income planning and more
Are you considering an early retirement from your department? Creative Planning Law Enforcement can help. We understand the unique challenges faced by law enforcement officers and take a holistic approach to helping you plan for the future by integrating all aspects of your personal financial life into a single, comprehensive plan. We’re here to help you achieve your retirement goals. If you’d like help planning for an early retirement, or with any other financial matter, please schedule a call.