The End Game: Retirement

Retirement. 

Depending on who you ask, retirement has many meanings in the law enforcement community.

It’s the end game for many, and for some, it’s the impossible dream that seems like it never will come. For others, it’s fantasy or make believe, something they cannot wrap their minds around.

For Jamal Howard, 24, a second-year officer with the Hopkinsville Police Department, retirement isn’t on his radar this early in his career.

“Right now, my focus is staying on patrol,” Howard said. “Retirement isn’t something I think about a lot. I’ve always worked, and I love to work.”

The Christian County native said his focus is on his job, but added that retirement may become a blip on his radar screen one day.

“I will probably start looking at retirement after I turn 35, when I’m off patrol,” he said. “That’s when I will start looking at it.”

Some 200 miles northeast, Sgt. William Vogt, 32, a nine-year veteran with Louisville Metro Police Department, said he started the retirement planning process early in his career.

“Officer Peter Grignon’s widow came and talked to us at the academy, and that reality kind of set in,” Vogt said, of the LMPD officer who died in the line of duty in March 2005. “One thing she talked about was that he took care of a lot of the money stuff, and when he passed, she didn’t know what to do. I don’t want that to happen to my wife. When I first started out, I put in six years on the west end, and I had fun doing good police work. It was dangerous, but I was safe. But there are some things you cannot guarantee, and that is the reality of it.”

Travel another 220 miles east to Pikeville, you will discover that retirement has Pikeville Police Capt. Aaron Thompson’s full attention.

“I am fully aware of the 20-year retirement,” the 43-year-old, 17-year veteran said. “That was a draw to me for the job.”

The one thing all three officers have in common is a desire to one day live the dream 50-year-old Brian Slone of Nicholasville currently is enjoying.

Slone retired in August 2016 after more than 24 years with the Nicholasville Police Department, rising to the rank of assistant chief.

Brian Slone retired as assistant police chief in August 2016 after a 24-year career with the city’s police department. Slone wishes local and state government would put more of an emphasis on organized retirement planning for young officers throughout their careers. (Photo by Jim Robertson)

“I don’t fish, but I have traveled,” Slone said about retirement. “I’ve been to Las Vegas twice; I’ve got a poker club I belong to and we went out there, and I went once with my son, kind of a father-son trip.”

No matter what line of work a person is in, retirement is an end goal, and for many, the game plan – assuming there is one – differs. For some, an unpleasant surprise may await them.

According to a March 2017 time.com article, 40 percent of Americans are wrong when it comes to preparing for retirement.

The article cited a study by the Center for Retirement Research at Boston College, which says more than half of working-age Americans are at risk of experiencing a drastic reduction in standard of living upon retirement.

“What is surprising, though, is the number of people the researchers identified who believe they’re on track to a secure retirement but aren’t (according to the researchers) and, conversely, how many are worried they’re falling short but are actually doing fine,” the article states.

That fact didn’t surprise Slone, who said he wishes he would have gotten serious about retirement much earlier in his career.

“Around year 19 was when I started planning for retirement,” he said. “I went to Frankfort and met with them (Kentucky Retirement System personnel) and set up the account as far as turning in a birth certificate, beneficiary information, marriage license and all of that. I had that set up, but I was not happy with the money I was going to draw at that time. From that point on, for the next five or six years, I played the numbers game.”

Slone’s story is one that Vogt has heard many times from his Louisville colleagues. Stories like Slone’s is one reason Vogt and Louisville Sgt. Brian Kuriger are in the beginning stages of putting together financial classes that will be offered to Louisville officers. Though not mandatory, interested officers can attend the classes in their free time.

“That is one of the scary things,” Vogt said. “When [officers] are living from check to check, where they rely on the overtime or off-duty employment to support their lifestyle because they’re living beyond their means, there’s no long-term vision in sight, that I’ve noticed.”

The idea of putting together a program came to Vogt during a Department of Criminal Justice Training instructor’s course he took in February 2017.

“All they have at our academy is an hour-long block of instruction based on Dave Ramsey’s Financial Peace University,” he said. “I thought to myself, ‘I think we need a little bit more than that, if we could do it.’”

Vogt said the course would be informational in nature.

“I don’t think we’ll ever get it to be Kentucky Law Enforcement Council-approved because we haven’t had some kind of job where we were financial advisors,” Vogt added. “So what we’re trying to do is offer it on the side.”

Vogt said the program would be similar to the Financial Peace University, but geared toward law enforcement officers.

If agencies offered such a tool, Slone said it would be well-received and a tremendous benefit to many law enforcement officers.

“I think the state, cities and counties do not do a good job in educating employees early on in their careers,” Slone said. “Maybe they don’t know how or maybe they just don’t know, either. I think there is a disconnect statewide (and) we need to do a better job of educating our officers at an early point in their careers.”

In a policeone.com article titled, “Tips for Planning Your Retirement from Law Enforcement,” author Matthew Loux, a criminal justice faculty member at American Military University opined the first step to retirement is saving.

“Sit down with your family and talk about your budget,” Loux wrote.

Among the budget items he suggests discussing are monthly expenses, short-term goals and long-term or retirement goals.

The article states that most experts say a person will need between 70 to 80 percent of their current salary to live on during retirement.

So that means, if you earn $50,000 a year, and are 35 and plan on retiring when you are 62, with a life expectancy to age 85, you will need to save $9,869 per year in order to have the $40,000 a year in pension payments (80 percent of 50,000) you’ll need in retirement. Obviously, if you start saving as a young, 25-year-old officer, you would need to save less per year; about $5,300 per year, according to the article.

Other tips offered in the article include reviewing the agency’s pension, IRAs and 401-type plans.

The article also encourages officers to be knowledgeable on projected Social Security benefits by using calculators on the Social Security Administration and AARP websites.

Second Career: Life After Retirement

Like many before him who have retired from law enforcement, Slone also is enjoying a second career, one closely related to his police work. He works 24 to 36 hours per week as a security officer for Alltech in Nicholasville. It is a position he has held since the mid-1990s, when he worked a 12-hour weekend shift.

“When I was working up to 50-plus hours per week at the police department, I could only work Sundays there,” he added.

Now, Slone is enjoying the fruits of his efforts.

“(Retirement) was an unachievable goal,” Slone said. “I never thought it would happen. Now, I’m amazed that on the 14th of every month they pay me to sit at home. I cannot believe that; it’s a great thing.”

A second career closely related to law enforcement also appeals to Thompson.

“My goal right now is to do the 20 years and be done, and I want to start another career,” he said. “I would like to do something as an instructor training in law enforcement. University of Pikeville has a criminal justice program. Last month I got my instructor certificate with KLEC. If not there, maybe in Richmond at DOCJT.”

Pikeville Police Capt. Aaron Thompson is less than three years away from retirement. The 17-year veteran said he looks forward to engaging in a second career once he hangs up his gun belt. (Photo by Jim Robertson)

Vogt, whose father taught him and his siblings the importance of finances, said the one thing he doesn’t want to do is retire, turnaround, sign back up and continue policing.

“I’m really passionate about finances; I’m a dork like that,” Vogt said. “When I retire, I don’t want to have to come back and be the police again. I wouldn’t mind coming back and offering financial counseling services to police officers; maybe I would do that for a comfortable salary. It doesn’t have to be a six-figure salary.”

The Boston College study showed for those with a defined-benefit pension, which can provide annuity payments for life, many people simply don’t understand the real value of a lifetime stream of income.

“It’s also possible that some may not even know what size pension payment they’ll eventually receive,” the article states.

There are many options currently out there that will assist those wanting to plan for retirement ranging from financial classes to the Kentucky State Retirement System’s website.

“You can get on [the web site] and put in an estimated retirement date and it will show you what your benefit will be and what you’ll draw,” Slone said of the KSRS website.

Thompson said as his retirement day draws near, he opted for his own research.

“I like going out and seeking information for myself,” Thompson said.

Several reputable financial-planning companies offer plenty of advice and retirement tools such as retirement calculators to assist in the process, but ultimately, a successful retirement will come down to the individual officer.

Vogt said retirement planning and preparation is a marathon, not a sprint, and the key is educating yourself and being disciplined.

“It’s not just a police thing, it’s a society thing,” Vogt said. “Why you don’t have somebody teaching you basic finances is beyond me. You want to be financially well, which means in as little debt as possible. You want to avoid things like credit card bills in order to set yourself up for success in the future. If you can put off what you want and live below your means now, eventually you’re going to get to a spot where you’re going to realize you can buy whatever you want, within reason. It’s delayed gratification.”

In regard to the state’s retirement system, Vogt said work hard and make your way up the ladder so when the time comes, you’ll have rank, which will affect your high three.

According to the state retirement system’s website, hazardous retirement benefits are based upon a 3-High Final Compensation. When final compensation is based on the 3-High, it must include at least 24 months and a minimum of three fiscal years. The years used do not have to be full, 12-month years.

“You may not want to do it, but you’re here for a reason,” Vogt said. “You want to make money. So get promoted and put yourself in a position to succeed (in retirement).”

Retirement Keys

Policeone.com offers three keys to planning for retirement after a police career:

• It’s never too late to plan ahead. The article states that police departments should bring in a financial planner to talk to new recruits. Often, new officers come from college, the military or a lesser-paying job and they find themselves suddenly inundated with credit card-debt and high car and house payments.
• Figure out what retirement means to you. According to the article, after the first few weeks of sleeping in, reality sets in. Long before hanging up the gun belt, officers need to start figuring out what they want their retirement to look like.
• Make health a priority. In the 1970s, the Cooper Institute for Aerobic Research conducted a study that concluded on average, retired police officers die within five years of retirement. According to an October 2009 FBI Law Enforcement Bulletin, “An extensive study of more than 2,000 officers in Buffalo, N.Y., found the age-mortality rate for officers was, on average 12 years lower than their civilian counterparts; health issues, such as cancer and heart disease, increased as officers drew closer to retirement; and the average life expectancy after retiring was 5.05 years less than that of people in other occupations.”

Six reasons to plan your retirement (policeone.com, “Tips for Planning Your Retirement from Law Enforcement”)

• A 2012 study by the Employee Benefit Research Institute found that 30 percent of workers reported having less than $1,000 in savings and investments; 56 percent of workers report they have not attempted to calculate how much money they will need to save for a comfortable retirement; and 60 percent of workers report that their total household savings and investments, excluding the value of their home and any defined benefit pension, is less than $25,000.
• Fidelity Investments estimated that a 65-year-old couple retiring in 2013 would need $220,000 to cover medical expenses throughout their retirement.
• According to the Employee Benefit Research Institute, just 14 percent of American workers are very confident they will have enough money to live comfortably in retirement and half of current retirees surveyed say they left the work force unexpectedly as a result of health problems, disability or getting laid off.
• Social Security only replaces 40 percent of pre-retirement earnings for low earners retiring at age 62.
• A Health and Retirement Study found almost 75 percent of retirees have not saved enough and said they would save more if they could do it all over again. At age 65 and older, Social Security benefits provide more income than any other source for more than 60 percent of households, regardless of marital status with the average monthly benefit of $1,294 for retired workers.
• The Center for Retirement Research found more than one-third of all households end up with no employee-sponsored retirement plan at all during their entire work lives and others, who move in and out of coverage, end up with inadequate 401(k) balances. About 21 percent of workers covered by 401(k) plans choose not to participate, and a typical worker should accumulate about $363,000 by the time he or she retires. According to the Federal Reserve, a typical household approaching retirement had 401(k)/IRA balances of only $120,000 in 2010, far short of the projected amount needed for the individual.