[Video] The 5 Biggest Mistakes Special Risk FRS Pre-Retirees Make

You know what the best advice I ever got was? Avoid the big mistake. Sounds simple, right? We can absorb little mistakes, and they typically don’t change the course of our lives. But make a big mistake, especially with your FRS retirement plan—that can change your life, or the life of someone you love.

And when it comes to your FRS plan, you can make one of these huge mistakes and not even realize it for years. But when you do realize it, it’s gonna be a bad day, and it may have been something you could have easily avoided, if you’d just understood what the mistake was before you made it. Let’s look at the five most common BIG mistakes we see FRS Special Risk retirees make.

Over the years, we’ve seen mistakes, big and small—and in some cases, HUGE—that firefighters and police officers make with their FRS retirement plan. And unfortunately, we see those mistakes repeated over and over again. So today we’re going to look at the five biggest mistakes that we see FRS Special Risk participants make over and over again.

You all have available to you a Deferred Compensation plan. But it boggles my mind how few Special Risk FRS participants really utilize it—and even fewer that utilize it well.

Let me let you in on a little secret. When it comes to FRS participants, the Deferred Comp plan tells me—as a fiduciary advisor whose sole purpose is my client’s success—it tells me A LOT about somebody and how successful they are likely to be in retirement. Let me explain it this way: When I see a well-utilized plan with a strong level of contributions and NO LOANS on the plan, this tells me that this is someone who lives within their means and understands the importance of not just saving, but saving in a great tax-deferred environment. It tells me they think about the future and probably have put some thought into long-term planning.

But what it tells me most is that this is a person who has a great shot at a really good retirement experience.

So it’s a big mistake and a big opportunity lost to not really take advantage of your Deferred Comp. Use it. If you don’t know how to use it or if choosing the investments boggles your mind, call us. We’ll help you.

Number 4 is putting too much faith in thinking that the rep from the company that manages your Deferred Comp plan is a good source for long-term financial planning and your retirement.

Listen, nothing personal here. These are good people that mean well. But think about it for a second. First off, they work for their company, whether it’s Nationwide, Empower, Mission Square, or whoever your department has their deferred comp plan with. They don’t work for you. They are trained to represent that company first. And it makes sense, because who pays them? You or the company they work for? The company. Now that doesn’t mean they don’t have your good intentions at heart, but it can’t be argued that it limits the scope of their advice.

Second, these are entry-level jobs in the world of financial services. This is not where you are going to find high-level financial advice, which I personally think you deserve. You can do better.

If you’d like a second opinion about your deferred comp plan and how it fits in with the rest of your retirement, we offer that to FRS Special Risk participants. We’re already familiar with many of the deferred comp plans throughout the state and would be glad to chat with you for a few minutes about your choices and options and what might make the most sense, given your situation.

Which pension option should you choose? When someone makes a mistake on this one, the impact can be devastating. You’d think with all the information out there that’s available, nobody would be making mistakes here—but that’s just not so, and it points to how confusing these things are for some people.

On top of that, we see A LOT of misinformation out there by well-meaning but perhaps a little misguided advisors who ultimately are trying to sell a high-commission life insurance or annuity product. Again, they are typically good people—they just don’t know better and honestly believe they are doing the best thing for you. But like I said earlier, you deserve better. Consider getting your advice from someone who isn’t incentivized to sell you something. It’s really that easy.

And one easy way to avoid working with an advisor that maybe doesn’t have your best interest over their own is to work with a highly experienced, highly credentialed fiduciary advisor who doesn’t get paid to sell you financial products. We’ve been fiduciary advisors at Northstar for over 24 years and wouldn’t have it any other way. It really is a different experience working with someone who isn’t trying to sell you something and clearly is working FOR you, doing everything they can to help you reach your most important goals.

Investment Plan or Pension Plan? The number two mistake we see is officers and firefighters picking the wrong plan FOR THEM.

This is one of those decisions where there’s no right answer that is right for everybody. So I can’t tell you in this video what the right answer is for you. You can have two people, with exactly the same career, but for one of them, the right answer is the pension, and for the other, the right answer is the Investment Plan.

Each plan has its own advantages, and making sure you are aligning the right plan up with your goals and objectives is what needs to be considered.

Concerned about which is the right plan for you? Talk to us. Maybe we can make that decision a little easier for you.

One of the things we enjoy about working with so many Special Risk FRS participants is that, as officers and firefighters, you are in a very tight-knit community. You trust each other with your lives, you understand how important it is to work together, and often, you’re like family to one another.

But that’s also one of the biggest obstacles we see. We call it the firehouse financial planner or station financial planner. You know what I mean, right? Every station and firehouse has one—that person who really gets this stuff and talks a great game.

Getting what should be highly personalized and complex financial advice from the co-worker on your shift that talks a good financial game is, we think, the biggest financial mistake we see Special Risk FRS participants make.

And we get it. Like I said, you’re a close and tight-knit community that trusts each other with your lives.

Now, I’m not saying don’t listen to them. We’ve actually heard some pretty good advice from a few who have thought it through well or maybe are working with a pro. But we’ve also heard advice given that we felt was very dangerous and not seeing the whole picture very well.

This is where our second-opinion service can really help you. Call us, and let’s talk. One of three things is going to happen. First, you could be on a great track, doing everything right, and we’ll tell you so. It’ll be worth your time because you’ll have the confirmation that you are doing it right.

Second, you could need some additional help, but we may not be the right kind of help you need. If that’s the case, we’ll point you in the right direction for the help you need, and you’ll have made a big step closer to your goals.

And third, we may see that we can add some real benefit to your life and explain why. As a fiduciary advisory firm, we have no incentive to sell you anything. We don’t represent the insurance companies or investment companies. We work for you, and we’re required to put your best interests over our own.

Let us help you avoid these mistakes so you can have a comfortable, secure retirement experience. Thanks for watching, and stay safe out there!