1/5 I'm at the beginning and haven't finished all training yet - what should I do?

If you just got hired, you're still not finished with the Academy and FTI, or are still in your probationary period....you need to be saving cash in a savings account instead of investing during this short, initial period of your career.

You might not make it through training.  

You might get injured and not make it through training.  

You might get into your first real scary scenario while in FTI and realize this career isn't for you.  

Your family might talk you out of it.

Whatever the risk is in your particular situation, the fact is that you might need that cash in your savings account more than you might need a few thousand bucks in your retirement account.

Save cash.

Keep your expenses low.

For God's sake, do not buy a new car or overspend on your housing costs.  

If you did overspend on your housing or you did buy a new car, get out of them.  Read your lease and see what clauses might allow you to break that contract and get out of it.  If you can't then get out of it and into a smaller, cheaper place as soon as you can.  

If you bought a new car, sell it.  Buy a cheap, reliable, used car and save up for an upgrade to your ride every year or two.

Live your life like you might lose your income at any minute - because you could.  I know it is not ideal, but prepare.

You will probably make it on to the next stage in your career, out of your probationary period, and you can read the appropriate post about what to do then.

Join the FOP The biggest risks to your financial future are divorce and legal action.

2/5 What if I'm not sure that I'm sticking around for a full career

If you have made it past your probationary period and your are done with all your training, but you're not sure that you are going to stick it out for a full career with FCPD, here's what to do:

Hold on to all that cash you saved up while you were saving during your initial training and probationary period with the Department.  Keep that as cash in case you need it.  It is your Emergency Fund.

Now, though, it is time to begin investing and since you are not sure that you are going to stay with the Department for a full career and enjoy the benefits of the pension, it would be wise for you to invest as though you are a "normal" investor.  

Police Officers have certain special considerations for their investments given that they retire early and have a pension.

Since you might not be a Police Officer in the near-ish future, follow the standard investing advice of 'have a broadly diversified set of investments, avoid risk, and invest for the long term'.

Consider a Target Date Retirement Fund.

Despite the fact that you might not stay with the Department for the long haul - max out your Deferred Comp investments, both your 457 ($19,500 per year) and your Roth IRA($6,000 per year).  You can take those accounts with you to your next employer and 'future you' will be glad that you began saving early and aggressively.  

Your next employer may have a different broker which manages its retirement accounts.  You may choose to "Roll over" your T Rowe Price retirement accounts to the new broker in order to take advantage of the benefits they offer, like a matching employer contribution, etc.

Join the FOP The biggest risks to your financial future are divorce and legal action.

3/5 I'm planning to stick around for a full career and earn a pension benefit one day

 Great.

By the time you get to this stage of your career, you'll have followed the advice in the first stage so you already have an Emergency Fund saved up - good for you.

Now you're going to be maxing out your Deferred Comp account and your Roth IRA.

T Rowe Price can create and hold your Roth IRA for you in addition to your normal Deferred Comp (457) plan.

You just need to max both of them out.

$19,500 in your Deferred Comp account.

$6,000 in your Roth IRA.

But what to investments to choose in my T Rowe Price account?

Police Officers with a pension plan like ours have significantly different investment needs than other investors.  Since the Police Officers Retirement System is in good shape, you can count on receiving a monthly check at the end of your career from "Uncle Fairfax."  That reduces your risk tremendously!

That reduction in risk allows you to invest for growth, essentially taking on the risk that you would have to mitigate if you were a "normal" investor, if you choose too.

I use PRGFX, the "Growth Stock Fund."  Its a little bit expensive with an expense ratio at 0.65% , but it earns well:

Your investment choices are your own, however.  Exercise care and talk to a financial advisor.

The rest of your money is yours to live on and do with what you will.  Create a Spending Plan, follow it, and enjoy your life and your future pay raises.  

Take care of your health.  Your future poor health may be your greatest expense of your life.  Your current investments in good diet, weight, blood tests, regular doctor visits for early screening and early detection of cancers and other diseases, etc may end up being your most profitable investments ever.

Police work is hard on the body and the mind.  Take good care of what God gave you.

If you want to choose to save and invest even more, you can do that in a regular brokerage account.  Vanguard is one good option.

As for what to invest in, how much, and when to make changes to that extra investment account, you cannot go wrong by following the The AlphaDogs.   They beat the market over time.

Join the FOP The biggest risks to your financial future are divorce and legal action.

4/5 I've made it over 20 years of service, but I'm not close to retiring yet

  Awesome.  You passed the first retirement Milestone.

You need to fill out the Bridge Option form with the Retirement Agency and turn it in to them! (possible via interoffice mail, but preferred for something this important is hand-delivery - by you!)

That's it.  Keep doing what you do.  Keep investing as you have been.  Be safe.

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If you want to choose to save and invest even more, you can do that in a regular brokerage account.  Vanguard is one good option.

As for what to invest in, how much, and when to make changes to that extra investment account, you cannot go wrong by following the The AlphaDogs.   They beat the market over time.

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Consider talking to Freddy Rappina, a retired Fairfax County Police Officer, who understands our system's quirks and features.  He is a fiduciary, he puts your needs first, and he has the education and training to help you.  Plus he's a really good guy.

Join the FOP The biggest risks to your financial future are divorce and legal action.

5/5 I'm close to retirement - or I'm already retired

  Congratulations!  You've achieved the big goal.  

Thank you for protecting us, our families, our communities.

It is time to reduce your risk and to not make mistakes.

Do not change your broker (the company that manages your Deferred Comp account) after you retire!  

Currently, that company is T Rowe Price.  

When you retire, because you are, or were, a police officer, you are eligible to (if you choose to) begin drawing from your Deferred Comp account without the early withdrawal penalty that most people have to contend with.  If you move your account from T Rowe Price to some other company, you lose that benefit.

• If you're going on to another job, or you plan to let your investments continue growing because you plan to live on your pension income, at least for now, then keep your investments the same.  Or maybe only reduce the risk some.  You still want to pursue growth.
• A lot of folks who choose this path will choose to earn another pension from a separate and distinct pension system.  Some will choose to go finish up by making sure that they get 40 quarters (10 years) of work in which pays into Social Security, in order to make them eligible for "full" Social Security benefits.  

• If you are close to retirement and you plan to soon start drawing from your Deferred Comp account, you should start thinking about reducing the amount of risk that you are taking with your investments.  The easiest way to do that is with an appropriate Target Date Retirement Fund through T Rowe Price, just log in and change your investment choices to one that matches your expected retirement timeline.  That will significantly reduce the risk to your investments, but may also limit their growth.  Your choice.  

You also need to consider your "Spousal Benefit" option which you select at the time you retire.  This option is really just you buying life insurance on yourself, for your current spouse's benefit, and paying for it by taking a smaller current monthly pension payment.  It is likely better and possibly cheaper to purchase a similar benefit in the private market, unless you have certain special circumstances.

If you have questions, talk to a financial advisor who is also a fiduciary.  

Consider talking to Freddy Rappina, a retired Fairfax County Police Officer, who understands our system's quirks and features.  He is a fiduciary, he puts your needs first, and he has the education and training to help you.  Plus he's a really good guy.

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If you want to choose to save and invest even more, you can do that in a regular brokerage account.  Vanguard is one good option.

As for what to invest in, how much, and when to make changes to that extra investment account, you cannot go wrong by following the The AlphaDogs.   They beat the market over time.

Join the FOP The biggest risks to your financial future are divorce and legal action.