By the time you’re a decade or two into the job, you’ve seen some things. You’ve watched guys blow through overtime cash on shiny trucks and bass boats, and others quietly build nest eggs. If you’re in that 10–20-year sweet spot of your career, now’s the time to get serious about your retirement planning.
Why is mid-career such a sweet spot? For one, you’re likely earning more than when you started (maybe you’ve made engineer or lieutenant), so extra cash is flowing. By year 10, you’re probably vested in your pension, meaning you have a right to a retirement benefit. By year 20, in many departments, you’re eligible to retire with a significant (though not always sufficient) pension. This phase is also when many firefighters are balancing mortgages, kids, and aging parents, making financial moves both more challenging and more crucial. It’s easy to put finances on autopilot now – the pension check grows automatically with each year of service, right?
In fact, those pension formulas could be less than you’d hoped for, and supplementing a pension check may be necessary to live comfortably. The good news? You’ve still got time to course-correct and plenty of tools at your disposal.
Understanding Your Pension Benchmarks and Milestones
After 10-15 years in the service, you probably have a decent idea of how your pension works – but do you really know all the fine print? First, find out the formula your pension uses. Most firefighter pensions use a percentage multiplier per year of service. For example, many states set a multiplier around 2.0% to 2.5% per year, meaning each year you work adds another 2-2.5% of your final average salary1 to your pension. Typically, that final average salary is calculated over your highest-earning years (often the last 3-5 years or the highest 3 years).
So, if you’re 15 years in and making $60,000, and your plan uses 2.5% per year, at 20 years you’d be looking at roughly 50% of your final salary as an annual pension (2.5% × 20 years = 50%). In fact, Indiana’s firefighter pension1 works almost exactly like that – 20 years of service gives 50% of a first-class firefighter’s salary as pension. Every additional half-year beyond 20 in Indiana yields another 1% until hitting a cap of 74% of final salary1. That’s a common theme: many plans have a cap (often around 70-80% of salary) on how much pension you can accrue, even if you serve 30+ years.
Firefighter Pension Calculator
Most firefighter pensions use a percentage multiplier per year of service. This calculator uses 2.5% per year, which is common in many departments.
Years of Service
20
Pension Percentage
50%
Estimated Annual Pension
$37,500
Note: Many pension plans have a cap (often around 70-80% of salary) on how much pension you can accrue, even if you serve 30+ years.
Key Pension Questions to Ask Mid-Career:
- When can I retire with a full pension? Some plans allow retirement after 20 years at any age; others require reaching age 50 or 55, plus a certain number of years.
- What percentage of my salary will I get? Calculate your projected benefit at various future milestones and check if there's a pension cap.
- Are there COLAs (Cost-of-Living Adjustments)? Some pensions have automatic increases, while others don't adjust for inflation.
- What about survivor benefits? Understand what happens to your pension if you die in the line of duty or after retirement.
- Am I contributing enough? Be aware of any buy-back options or service purchase options that could increase your creditable service.
By mid-career, you should receive an annual pension statement. Don’t toss it in a drawer—read it. See if your projected benefit matches your expectations. If it looks low, that’s a red flag to step up other savings. Also, keep an eye on legislative changes. Pensions for public employees sometimes get tweaked by laws (for better or worse). For example, a recent law – the Social Security Fairness Act of 20251 – is increasing Social Security benefits for some firefighters.
Deferred Compensation: 457(b) Power Plays
By now, you’ve surely heard of your department’s 457(b) deferred compensation plan – the public sector cousin to the private world’s 401(k). Maybe you enrolled on day one; maybe you’ve been dragging your feet. Either way, mid-career is decision time: Are you maximizing this tool, and do you have a strategy for it? A 457(b) plan allows tax-deferred contributions, meaning you can put a chunk of each paycheck into investments before Uncle Sam takes his cut. The money grows tax-deferred until retirement, at which point withdrawals are taxed as income.
It also had one key advantage: no early withdrawal penalty if you separate from service. In other words, if you retire at 50 or 55, you can tap your 457 savings without the 10% penalty that IRAs or 401(k)s typically have (though you’ll still owe regular taxes). This is huge for firefighters who often retire younger than the standard 59½ distribution age.
457(b) Deferred Compensation: Power Plays
Your department's 457(b) deferred compensation plan is a powerful retirement savings tool specifically designed for public sector employees like firefighters. Mid-career is the perfect time to maximize this opportunity and develop a strategic approach.
Tax-Deferred Growth
Contributions come from your paycheck before taxes, reducing your current taxable income. Your investments grow tax-deferred until withdrawal during retirement.
No Early Withdrawal Penalty
Unlike 401(k)s or IRAs, there's no 10% penalty when you separate from service, even before age 59½ – great for firefighters who often retire early at 50-55.
Ideal for Mid-Career
With 10-20 years before retirement, you have time to take advantage of compound growth. The earlier and more consistently you contribute, the greater your potential retirement savings.
Separate Contribution Limits
457(b) plans have their own contribution limits separate from 401(k)/403(b) plans. If you have access to both types of plans, you can potentially contribute the maximum to each.
Investment Strategy Matters
Government 457(b) plans offer various investment options. Mid-career is the time to ensure your allocations align with your timeline and risk tolerance.
Tax Diversification: Both your pension and 457(b) funds will be taxable in retirement. Consider balancing these with tax-free income sources like Roth IRAs to optimize your tax situation.
Catch-Up Contribution Opportunities
As you approach the later stages of your career, 457(b) plans offer two valuable catch-up provisions to supercharge your savings:
Now let’s discuss investment choices and fees in your 457 plan. Government plans vary – some have great low-cost index funds, others might have higher fees or limited options. It’s worth looking at what you’re invested in. Mid-career, you likely have 10-20 years until you draw from this account, so you can probably afford a growth-oriented mix (heavier on stocks) if it aligns with your risk tolerance.
Already invested? Check if your money is just sitting in a very conservative stable value fund by default. If so, you might be missing out on growth over the long haul. On the flip side, don’t invest too aggressively without professional consultation.
It’s easy to forget that both your pension and 457 will be taxable. This isn’t to discourage you from using the 457 (by all means, build that wealth!), just a reminder to consider diversifying tax-wise (for instance, consider contributing to a Roth IRA on the side, which we’ll get to). When retirement comes, you’ll want some tax-free income sources to balance out the taxable ones.
By mid-career, you might also be eligible for catch-up contributions soon. Starting at age 50, you can contribute extra to the 457 beyond the normal limit. Also, many 457 plans have a special catch-up provision if you’re within 3 years of normal retirement age2
and haven’t maxed contributions in prior years. Keep that in your back pocket as you approach the latter part of your career – it could let you stuff a lot more into the plan in those final years.
Insurance Planning: Cover Your Assets
Firefighting is a risky job – you don’t need me to tell you that. That’s why most fire departments provide some level of life and disability insurance. But mid-career is when you want to double-check that you and your family are truly protected if the worst (on or off the job) happens. It’s not the most exciting topic, but it’s one of those things where a little prep now can save your family from financial ruin later.
Start with life insurance. Sadly, only about half of Americans even have life insurance, and 42% of adults say they need more coverage3 .Yes, you likely have a policy through work (perhaps equal to 1x or 2x your annual salary). But if you didn’t come home from that big one, would that payout be enough for your spouse/kids? Often, the answer is no, especially if you have a mortgage and young children.
Insurance Planning: Cover Your Assets
Life Insurance
Department coverage (1-2x salary) is rarely enough. With a mortgage and family, consider supplemental coverage.
Disability Insurance
Department benefits often cover only a portion of salary or only line-of-duty injuries. Protect your income with supplemental coverage.
Health Insurance
Plan for the gap between early retirement and Medicare at 65. Not all departments offer retiree health benefits.
Next, disability insurance. A line-of-duty injury or even an off-duty accident (hello, motorcycle) could end your firefighting career early. Does your department have disability coverage? Many do, but often it might cover only a portion of salary or only line-of-duty injuries. Consider a supplemental long-term disability policy if your benefits are lacking.
One more subtle but important piece: health insurance in retirement. While you’re employed, you have a health plan. When you retire before 65 (which many firefighters do), what’s your plan for medical coverage until Medicare kicks in? Some departments offer retiree health benefits or subsidies, others don’t. Mid-career is the time to find out what you’ll be dealing with.
Legacy and Estate Planning: Leave No Loose Ends
Mid-career is prime time for this, because by now you might have a house, a spouse, kids, maybe even a little pile of savings – in short, things worth protecting and passing on properly.4
Yet, you’d be shocked how many folks haven’t done this. Only about 32% of Americans had a will as of 2024 – meaning two-thirds of people are leaving their state’s courts to decide things for them.
Legacy and Estate Planning Checklist
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Last Will and Testament
Designates guardians for children and distributes property
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Beneficiary Designations
Updated forms for pension, 457 plan, life insurance, and IRAs
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Power of Attorney (POA)
Allows trusted person to manage finances if you're incapacitated
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Healthcare Directive
Outlines medical care wishes and designates healthcare proxy
At minimum, consider drafting these documents in mid-career:
Last Will and Testament
This spells out who gets what when you die. More importantly for those with young children, it names guardians for your kids. You do not want a court deciding who raises your children if you and your spouse are gone – you want to pick Uncle Joe (even if he tells bad jokes) over, say, that sketchy cousin. A will handles that. It can also designate someone to manage any money left to minor children (often via a trust).
Beneficiary Designations
Your pension, 457 plan, life insurance, and any IRAs all let you name beneficiaries. Keep these up to date! If you divorced and remarried, make sure the right spouse is named (you’d be amazed how often old beneficiaries linger – awkward). Beneficiary forms usually trump what’s written in a will for those accounts, so update them whenever life changes. It’s quick: usually an online form or a paper to file with HR.
Power of Attorney (POA)
This allows someone you trust to handle your finances if you’re alive but incapacitated. If you get badly injured and can’t manage bills or decisions for a while, a POA designates who can step in. Without it, your family might have to go through an ugly court process to get that power.
Healthcare Directive (Living Will)
This lets you spell out your wishes for medical care if you can’t communicate, and/or designate a health care proxy to make decisions for you. It’s a kindness to your family to make your wishes known in advance.
These aren’t expensive or difficult to set up. You can use an attorney (recommended if you have a complex situation) or even reputable online services for basic wills if money is tight.
Debt Reduction and Smart Mortgage Moves
By your 10th to 20th year, you’ve probably accumulated some debts along with assets. The usual suspects: a mortgage, maybe a second mortgage or home equity loan (if you did renovations), car loans, possibly some credit card balances, and maybe student loans (either yours lingering or a spouse’s). Carrying debt is normal, but carrying too much into retirement is like dragging a hose pack around all day – it gets real heavy, real fast. In fact, a recent analysis showed over 26% of retired folks are still paying off their mortgages5, and 25% carry credit card debt in retirement. You don’t want to be in that quarter if you can help it. So what can you do in mid-career to lighten the load?
Debt Reduction Strategy Flowchart
Do you have high-interest debt?
(> 8%)
Attack High-Interest Debt First
Use the debt avalanche (highest rate first) or snowball (smallest balance first).
Is your mortgage rate > 7%?
Consider Refinancing
Refi to a 15-year term to retire the mortgage before you retire.
Make Extra Payments
Bi-weekly or one extra payment per year can slice years off the loan.
Focus on Mortgage Strategy
Your largest debt usually has the biggest retirement impact.
Home upgrade plans?
Be Cautious
Avoid over-leveraging late in your career; downsizing can free equity and cut costs.
Accelerate Payoff
With 10-15 years to retirement, every extra payment packs maximum punch.
Attack High-Interest and Toxic Debt First
Credit card debt, unsecured personal loans, or any debt with a high interest rate (usually above 8-10%) is enemy number one. It’s hard to justify investing money at, say, 7% expected returns when you’re paying 18% on credit cards. If you have balances rolling month to month, channel some overtime or spare cash to pay them off. You might use the “debt avalanche” method (pay extra on the highest interest rate first) for maximum savings, or the “debt snowball” (pay the smallest balance first for psychological wins).
Be Smart with Your Mortgage
Your home is likely your biggest asset and your biggest debt. Mid-career, you could be anywhere from just starting a 30-year mortgage to already halfway or more through it. Here are some tactics to consider:
Refinance (if it makes sense): If you happened to buy when rates were higher and never refi’d, check current rates – though in 2025, rates might be around 6-7%, so refinancing only helps if your current rate is higher6 or if you want to shorten the term. Some folks refinance a 30-year into a 15-year in mid-career to aim for a paid-off home by retirement. Just be cautious: refinancing costs money upfront and resets the clock if you extend the term.
Extra Principal Payments: A little goes a long way. Adding even one extra payment per year (or dividing your payment into biweekly payments) can shave years off a mortgage. For example, paying biweekly (which results in 26 half-payments, i.e., 13 full payments a year) can turn a 30-year loan into ~25-26 years. You likely won’t miss that money if it’s structured right, and you could save thousands in interest.
Don’t Over-Leverage on Upgrades: It’s tempting mid-career to move to a bigger house or do the big remodel. By all means, make the home comfortable, but be careful about taking on a lot more debt as you approach the later years of your career. That fancy outdoor kitchen might be nice, but not if it means a mortgage hanging over your head till you’re 70.
The goal many financial advisors suggest is to enter retirement debt-free, or as close to it as possible. That means no credit card balances and ideally no mortgage. Now, not everyone achieves the mortgage-free part – and it’s not an absolute must (some retirees keep a small mortgage by choice, especially if their rate is very low).
You’re getting close to the finish line now. Let’s talk about that extra credit: building investments outside of your pension and 457. This is where you truly go from a good retirement to a great retirement.
Building Additional Investment Accounts (IRAs, Roth IRAs, etc.)
Mid-career, if you’ve gotten a handle on the above areas and have any surplus cash flow, consider investing in accounts beyond your primary deferred comp. Why? Diversification – not just of investments, but of tax treatment and accessibility.
A great option is a Roth IRA. Roth IRAs are funded with after-tax money, but grow tax-free and withdrawals in retirement are tax-free. Since your pension and 457 will be taxable, having a pot of money you can pull from without Uncle Sam taking a cut is huge. It gives you flexibility to manage your tax bracket in retirement. For example, you could take just enough from pension/457 to fill your lower tax bracket and then use Roth money for extra expenses – resulting in potentially lower overall taxes. Also, Roth IRAs have no required minimum distributions until after the owner’s death, unlike 457s/Traditional IRAs which force you to start withdrawing by age 73. That means a Roth can keep growing if you don’t need it at 60 or 70.
Investment Growth Calculator
See how investments beyond your pension and 457(b) can grow over time. The power of compounding can significantly boost your retirement readiness.
Your Investment Details
Projected Growth Results
Final Investment Value
$177,142
Total Contributions
$95,000
Interest Earned
$82,142
Growth Multiplier
1.9x
Roth IRA
Tax-free growth and withdrawals in retirement. No required distributions during your lifetime.
Traditional IRA
Tax-deferred growth with potential for immediate tax deduction. Required distributions at age 73.
Taxable Brokerage
Flexible accessibility without penalties. No contribution limits. Pay taxes on dividends and capital gains.
Don’t neglect Traditional IRAs either – if you aren’t maxing your 457, a Traditional IRA could give you another tax deduction now. However, many firefighters in mid-career actually earn too much to deduct a traditional IRA contribution if a workplace plan covers them, so the Roth often makes more sense (check with a tax professional on your specific case).
Beyond IRAs, consider a taxable brokerage account for general investing. Maybe you want to invest in something like mutual funds, stocks, or real estate investment trusts outside of retirement accounts. This can be money available pre-retirement for goals like helping with a child’s college (if not using a 529 plan) or even an extra bridge fund if you retire early. The downside: you’ll pay taxes on dividends and capital gains. But the upside: full flexibility, no penalties, no contribution limits. It’s an option once you’ve filled up the tax-advantaged buckets.
Wrapping Up and Taking Action
Mid-career in the fire service is a time of seasoned confidence – you know what you’re doing on the job. By applying the same proactive mindset to your finances, you increase your chances of one day enjoying your retirement without the typical financial stressors many firefighters experience.
Your Mid-Career Financial Action Plan
Mid-career is the critical window when you still have time to course-correct and maximize your firefighter retirement. The decisions you make now will determine whether you merely get by or truly thrive in retirement.
Get a personalized mid-career retirement assessment from financial professionals who understand the unique needs of firefighters.
The mid-career phase offers a unique opportunity to assess your current financial trajectory and make strategic adjustments before time runs short. Each of the six areas we’ve covered—pension analysis, 457(b) plans, insurance protection, estate planning, debt elimination, and additional investments—represents a critical piece of your retirement puzzle. While it might seem overwhelming to address all these areas at once, even incremental improvements in each category can compound significantly over the next 10-15 years of your career. Taking action now doesn’t just mean better financial outcomes; it means greater peace of mind knowing you’ve secured your family’s future regardless of what happens on or off the job.
You don’t have to navigate all these financial decisions alone, either. If you’re unsure about anything we covered – whether it’s the fine print of your pension or how to invest your 457 – click the button below to schedule a time to chat!
Sources:
- https://www.firerescue1.com/retirement-planning- resources/is-your-firefighter-pension-enough-for-a-comfortable-retirement
- https://protectionred.com/understanding-the-benefits-of-a-457b-plan-for-firefighters
- https://www.bankrate.com/insurance/life-insurance/life-insurance-statistics
- https://www.retirementliving.com/best-wills-and-trusts/how-many-americans-have-will
- https://nationalmortgageprofessional.com/news/quarter-retirees-still-paying-mortgage-debt
- https://finance.yahoo.com/news/fully-paid-off-home-retirement-140500478.html
