Your First Firefighter Paycheck Explained

You've shed countless droplets of sweat blood, and tears getting to this moment. For the first time, your last two weeks have come to an end, and now you've received your first check. What do all these numbers mean... Let's go over it!

Disclaimer: Various departments may have differences in how they structure their paychecks; feel free to reach out to me with any questions that have not been addressed below.

Pension contribution

One of the greatest allures of working for any government agency is a pension. Pensions are a type of retirement plan that gives you a consistent payment after you retire. As a firefighter our plans are typically a bit more generous than other plans due to the job being much more physically demanding while also exposing the worker to significant risks that tend to lower life expectancy.

In short, more money cause they think you're gonna die sooner from doing riskier work BUT the goal is to take measures to ensure longevity! Understanding your finances will help with that.

(link for further About Pensions)

457b

A 457b is a deferred compensation plan. You contribute money from your paycheck which is pre tax and it grows in a tax deferred account until you withdrawl it. The biggest allure of this account is there is NO 10% early withdrawal penalty after separation.

Its likely that you are going to retire much earlier than when you can collect social security (62). Since there is no penalty this helps bridge the gap where you are now no longer working. If there is an age limit on your pension as well, the 457 will help with costs until you can collect that as well.

Your current limit for contributions to the 457b is about $24,500 a year and it does not share a limit with a 401k or 403b if you are also contributing to that.

Bachelors/ associates degree

In some states the city, county or fire district may give a educational supplementation if you have received your Bachelors or associates degree. In Florida iit'sa state law that full-time firefighters receive a $110 dollar a month for your bachelors or $50 a month for associates degrees.

DROP

DROP is also known as the deferred retirement option plan. This is a pension feature thats offered once someone is eligible to retire but keep working while their pension payments accumulate in a separate account.

This is not standardized nationally so it all depends on where you are. It could last from 3 years to 8 years. Here's a Link that goes more in-depth about DROP, but essentially what you can take away from this is:

1. Extra years of work typically means more income accumulation

2. A large lump sum at retirement that can be invested/ rolled over

3. Continued benefits while you're in the DROP

Link on drop

Specialties

Departments may offer specialty units and teams. Once you are on these teams they may have special incentives based on if you're at the station OR some may give you the incentive just for having the class! Its very dependent on your department so make sure you are aware of this if you are planning on only doing specialties for the pay bump (you should also check to see if these incentives are pensionable).

Roth IRA

Roth IRAs are a goldmine. You contribute after-tax dollars into this account that will grow and are tax free upon withdrawal at the age of 59 and 1/2. Depending on a few factors such as how old you are and what year it is, you are able to contribute a finite amount per year. Many firefighters will have a portion of their pay be allocated to being dispersed into their ROTH IRA. ( link for more indepth about Roth IRA).

Your contributions (NOT earnings) could be withdrawn at anytime, penalty free. There are certain case-by-case exceptions where you can withdraw early but upon doing so you will be met with certain penalties.

People will typically choose Roth IRAS if they expect to be in a higher tax bracket in retirement than they are now.