Nearly 70% of U.S. firefighters are volunteers, showing up for their neighbors for little or no pay. ¹ Yet only about 1 in 5 volunteer firefighters has any kind of retirement program to fall back on. ² Basically, most volunteers are on their own when it comes to retirement. You’re not in it for the money—maybe a pancake breakfast and a small stipend—but after decades of protecting others, who’s protecting your financial future?
At ProtectionRed, we work with first responders all the time. Yes, we’re advisors, not firefighters, so no, we don’t wear turnouts. But we do know how to build a retirement plan that can take heat. Below is your playbook on how to squeeze the most out of LOSAP, cover your back with insurance, grab the tax breaks you’ve earned, and build a long‑haul investment plan that lasts.
LOSAP: The “Thank‑You” Pension
What it is. A Length of Service Award Program (LOSAP) is a pension‑ish benefit some towns and fire districts set up to recruit and retain volunteers. You earn points for calls, drills, meetings, and training. Hit the minimum and you get credit for the year. After enough credited years (often 5–10), you vest. Reach the plan’s payout age (commonly around 60), and benefits start—either a small monthly check or a lump sum. It’s a solid “thank you,” not a golden parachute.
How modest is “modest”? Only about 20% of the 682,000 U.S. volunteers are even enrolled in a LOSAP. ² Where they exist, payouts tend to be small—think $100–$300 per month at retirement. One state plan pays $125/month after 10 years or $250/month after 25.³ However, some New York plans offer a higher monthly plan of up to $1,200 a month.⁸
Why so small? LOSAPs are capped by law and typically funded conservatively at the town level. Budgets are tight, priorities compete, and benefits often land on the token side. Bottom line: treat LOSAP as a supplement and recognition of your years of service, not a solution.
Make it count (if you’ve got one).
LOSAP by the Numbers
Understanding Your Length of Service Award Program
Know the rules. Confirm your plan type: defined benefit (fixed monthly amount later) or defined contribution (invested account in your name). Understand vesting, age, and survivor benefits.
Protect your points. Missing the annual threshold can forfeit a whole year of credit. Life is busy—job, family, duty nights—but if the plan requires 50 points, aim for 60.
Watch the paperwork. If statements exist, read them. Keep personal records of calls, drills, and training in case a year gets miscounted.
Mind your options. When eligible, compare lifetime monthly vs lump sum and how each affects your spouse if something happens to you.
No LOSAP? Don’t take it personally—and don’t wait on City Hall. Some communities eventually adopt LOSAP because it improves retention and says “we value you,” but politics and budgets move slower than a wet day. Plan as if you’ll never get a pension. If one shows up later, treat it like a bonus.
Insurance: Your Financial SCBA
Retirement planning isn’t just about growing money. It’s about not losing what you’ve built when bad things happen. Firefighting brings unique risks such as smoke, toxins, stress, and physical strain. That doesn’t magically go away because you’re a volunteer.
Life insurance (term, with living benefits if possible).
If the worst happens—on or off duty—your family shouldn’t face a financial second alarm. Term life is often affordable and covers the big things: income replacement, mortgage, college. Consider living benefits (accelerated benefits for serious illness). With your risk profile, this rider can be a lifesaver, both literally and financially.
Disability insurance (protect your paycheck).
An injury at a fire, during training, or a serious illness can sideline your real income source—your day job. Workers’ comp or departmental coverage may help with medical bills but not your paycheck. Long‑term disability insurance (50–60% of income) keeps the lights on if you can’t work for months or longer.
Health coverage & long‑term care.
If you retire before Medicare, map how you’ll bridge to 65—COBRA, marketplace plan, spouse’s plan—before you jump. Later in life, long‑term care (or hybrid life/LTC) policies can protect your nest egg from assisted‑living or nursing costs. Not cheap, but worth pricing in your 50s.
The rule: Insurance is the financial turnout gear. You hope it stays in the locker. But if the bell rings, you’ll be glad you suited up.
Tax Breaks: Small Dollars That Add Up
The federal government and many states toss a few carrots to volunteers. None of these will fund retirement alone, but together they can cover a month’s groceries—or seed an IRA.
Federal: VRIPA ($600 exclusion). The Volunteer Responder Incentive Protection Act lets you exclude up to $600/year of “nominal” benefits from federal income tax—things like small stipends, per‑call pay, and certain property‑tax rebates for serving. ⁵ The exclusion was made permanent, which is government‑speak for “you don’t have to chase it every year.” (If your LOSAP pays small annual amounts, ask your tax pro whether your plan’s payouts qualify under VRIPA.)
State credits.
New York: $200 income‑tax credit for active volunteers ($400 if both spouses qualify). But you cannot take the state credit and a local property‑tax exemption in the same year—pick one. ⁶
Illinois: credit up to $500 for volunteer emergency workers. ⁷
Many other states offer similar small‑dollar credits. Check yours annually; programs change with legislatures.
Local property‑tax relief. Some towns knock dollars off your bill (or reduce a percentage) after a minimum service period. It won’t grow your 401(k), but it frees up cash you can invest. Watch the fine print so you don’t accidentally “double dip” where states make you choose. ⁶
Out‑of‑pocket expense deductions. If you itemize, certain unreimbursed volunteer expenses (training materials, charitable‑rate mileage, etc.) may be deductible. Track receipts and mileage even if you don’t end up itemizing; having the numbers helps your department and your tax preparer—and can justify better stipends down the line.
Pro move: Funnel any stipends, credits, or tax savings straight into your IRA or 457/401(k). Small, automatic deposits beat big, someday intentions.
Financial Planning 101: Build Your Own Pension
If LOSAP is the thank‑you note, your savings are the retirement plan. Here’s the clean, short checklist.
1) Start early. Be boring. Win big.
Compounding is the only house fire that spreads in your favor. Even small, steady contributions can turn into real money over time.
Put $250/month into a diversified portfolio that returns a hypothetical and potential 7% on average: about $130,000 after 20 years (you contributed $60,000) and roughly $305,000 after 30 years (you contributed $90,000).
Even $100/month could grow to around $122,000 over 30 years.
Markets wiggle. These are illustrations, not guarantees.
2) Use the right accounts.
Work plan first. If your employer offers a 401(k), 403(b), 457, or TSP, contribute at least enough to grab the full match. Free money outranks clever stock picking.
457 plans (for many public employees) often allow withdrawals upon separation from service without the 10% federal early‑withdrawal penalty that hits IRAs and 401(k)s before age 59½. Check your specific plan rules.
IRAs: Traditional (potential tax deduction now, pay taxes later) vs Roth (after‑tax now, tax‑free later). If you expect similar or higher tax rates in retirement—or you just like the clarity of tax‑free withdrawals—Roth can be attractive.
Self‑employed? A SEP‑IRA or Solo 401(k) lets you stash much more in good business years.
Your Retirement Planning Roadmap
Key Actions by Age for Volunteer Firefighters
3) Invest simply and diversify.
Skip the hot tips. Use low‑cost index funds or a target‑date fund that automatically adjusts from growth to defense as you age. A classic mix: more stocks while you’re younger, gradually more bonds and cash as retirement nears. Rebalance periodically. The goal is discipline, not drama.
4) Plan your retirement like a long incident.
When do you want out? Career firefighters often retire earlier than desk‑job folks—many in their 50s. ³ Volunteers may keep serving longer, but your primary job might not. Build a timeline that matches your body, your goals, and your household.
How much can you withdraw? A common (imperfect) rule of thumb says a 4% initial withdrawal from a balanced portfolio has historically supported a ~30‑year retirement with a high probability of success. It’s a guideline, not gospel.
Inflation is the quiet arsonist. What costs $50,000 today might cost $80,000 in 20 years. Keep enough growth assets to outpace rising prices.
5) Kill expensive debt early.
Showing up to retirement with a big mortgage, rolling credit‑card balances, or high‑interest toys is like showing up to a structure fire without water. Prioritize: emergency fund → high‑interest debt → invest. If you can, aim to be mortgage‑free by retirement. Your future self will send a thank‑you note.
6) Put it on autopilot.
Use automatic payroll deductions or bank transfers into your retirement accounts right after payday. We all have the “I’ll start next month” gene. Automate so tomorrow doesn’t steal today’s plan.
7) Team up with a pro.
You rely on an incident commander on scene; rely on a fiduciary financial advisor for your money. A good advisor who knows first‑responder realities can help you: coordinate LOSAP with your broader plan, choose sensible coverage levels for life and disability insurance, and build a diversified, low‑cost portfolio you can stick with through market noise.
Final Thoughts
You’ve given nights, weekends, and holidays to protect your neighbors. Protect your future with the same grit. Use LOSAP if you have it, but don’t depend on it. Suit up your finances with life and disability insurance. Take the tax breaks you’ve earned. Save consistently in the right accounts, invest simply, and keep your plan boring on purpose.
This isn’t about being rich; it’s about being ready—so you can spend your later years doing what you want (maybe still volunteering for the camaraderie), not stressing over the light bill. If you want a second set of eyes, we’re here. We won’t tell you how to ventilate a roof; you won’t have to tell us how compound interest works. Together, we’ll make sure your retirement plan can take the heat.
Stay safe—and keep planning.
Sources
- U.S. Fire Administration – Volunteer Fire Service Overview: https://www.usfa.fema.gov/a-z/volunteer-fire-service.html
- Office of Sen. Susan Collins – VESRRA one‑pager (volunteer retirement coverage context): https://www.collins.senate.gov/imo/media/doc/VESRRA%20one-pager.pdf
- Federal Pension Advisors – Understanding Firefighter Retirement: https://www.federalpensionadvisors.com/post/understanding-firefighter-retirement-what-you-need-to-know
- Firefighter Cancer Support Network – FAQ on cancer risks: https://firefightercancersupport.org/resources/faq
- National Volunteer Fire Council – Federal tax exclusion (VRIPA) made permanent: https://www.nvfc.org/federal-tax-exemption-for-volunteer-responders-made-permanent
- New York State Dept. of Taxation – Volunteer firefighters’ income‑tax credit (and interaction with property‑tax exemptions): https://www.tax.ny.gov/pit/credits/volunteerfirefighters.htm
- Illinois Dept. of Revenue – Volunteer Emergency Worker Credit: https://tax.illinois.gov/individuals/credits/volunteer-emergency-worker-credit.html
- Croton On Hudson – Board of Trustees:
https://www.crotononhudson-ny.gov/board-trustees/news/mayors-newsletter-november-2023
