October is chock full of important observances. Fire Prevention Week. Cybersecurity Awareness Month. And fittingly, one that’s especially close to our hearts as retirement specialists for firefighters: National Retirement Security Month. Speaking of retirement security, unfortunately, most firefighter pensions replace only about 50–70% of your final working income³, and since you likely don’t qualify for Social Security, that pension could be your only guaranteed income in retirement.
Plus, not all pension formulas are created equal. For example, New Jersey firefighters can’t count overtime toward their pension because overtime pay is considered “extra compensation” and excluded from pension calculations⁴.
But cross the state line into Pennsylvania, and it’s a different story: some PA firefighters historically could pad their pensions with overtime; one Allentown firefighter managed to boost his pension by roughly 20% thanks to late-career OT⁵.
Since you can’t always count on loopholes or extras to shore up your retirement, your own savings, especially your 457(b) deferred comp plan, are crucial to filling any gaps.
So this October, we’re throwing down a challenge at the firehouse: The 457(b) Challenge. It’s simple, three key moves to help strengthen your financial future: (1) Raise your deferrals (if it makes sense–we can help if you’re unsure), (2) Check your beneficiaries, and (3) Schedule a quick plan review.
1. Raise Your 457(b) Contributions
When was the last time you increased how much you put into your 457(b) deferred comp plan? If it’s been a while, you’re likely due. This is the month to turn that dial up. Even a small bump, such as an extra 1% of your pay, can make a surprisingly big difference over time. Remember, a 457(b) is one of the best tools you have because it lets you invest for retirement tax-deferred, and you can withdraw from it penalty-free once you separate from service (unlike a 401(k) or IRA).
457(b) Contribution Growth Calculator
See how increasing your contributions today builds serious wealth over 20 years
Adding just 1% of a $75K salary to a retirement plan (with modest raises over time) could grow into an extra $44,511 after 20 years⁶. Now imagine if you challenge yourself to bump up by 2% or 3% – we’re talking potentially six-figure differences by the time you retire. Compounding (earning interest on interest) is your friend here; the sooner and the more you contribute, the more time your money has to work harder.
Take a look at what you’re contributing now. Maybe you’re doing 5% or a flat dollar amount like $200 a pay period. Can you increase it to 6% or $250? Chances are you can, especially if you’ve gotten a raise or promotion recently. (Did you get a longevity bump or cost-of-living increase this year? Funnel part of that straight into the 457 before it hits your checking account, and you won’t miss it.)
Your plan might let you set automatic escalation, say +1% each year, which is a great “set-and-forget” strategy to grow your savings. And if your spouse or partner can adjust their workplace plan too, do it together.
2025 + 2026 Contribution Limits
The 457(b) deferral limit is $23,500 for 2025 (projected $24,500 for 2026). If you’re within three years of your plan’s “normal retirement age” and your plan allows it, the Special 457 Catch-Up can let you contribute up to 2× the annual limit ($47,000 for 2025; projected $49,000 for 2026) to make up past under-deferrals.
You also have the option of age-based catch-ups. Age 50+ adds $7,500 in 2025 (projected $8,000 in 2026), and ages 60–63 may use the SECURE 2.0 “super catch-up” equal to 150% of the standard catch-up (governmental 457(b) only). You generally cannot stack the Special 457 Catch-Up with the age-50 or the 60–63 super catch-up in the same year; you must pick whichever yields the higher limit.
Source: https://www.whitecoatinvestor.com/retirement-plan-contribution-limits/#:~:text=2026%20401(k)/403,Savings%20Account%20(HSA)%20Contribution%20Limits
2. Refresh Your Beneficiaries
If you’ve heard us harp on this before, there’s a good reason. Beneficiaries are easy to check and update, and the stakes are simply too high to delay. This step is simply vital. Go through ALL your accounts. 457(b), pension, DROP account if you have one, life insurance policies, even your union death benefit, and confirm who you’ve named as beneficiary. Is it up to date? Are the right people (and backup people) listed? You might be shocked how many people never update this info after major life changes.
Studies have found that in many retirement plans, only about 40–60% of participants even complete a beneficiary form³, meaning a huge chunk of people leave it blank or outdated. If you don’t designate someone, the default may be your estate, which means a messy court process for your family. Even if you did fill it out years ago, take a fresh look. Are the allocations (percentages) what you want? Did you list a contingent (secondary) beneficiary in case your primary can’t receive it?
Refresh Your Beneficiaries
A critical step in protecting your family's future
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Go through your 457(b) deferred compensation plan and confirm beneficiary information is current.
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Check your pension plan beneficiaries (and verify survivor benefit options if applicable).
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Review your DROP account (if you have one) beneficiary designation.
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Verify life insurance policies through work and any outside coverage have current beneficiaries.
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Confirm your union death benefit beneficiary designation is up to date.
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Confirm the right people and backup people are listed as primary and contingent beneficiaries.
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Verify the percentage allocations across all accounts match your wishes.
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If you've had major life changes (marriage, divorce, new child), update all beneficiary forms immediately.
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Ensure any ex-spouses or outdated beneficiaries have been removed unless intentional.
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Do not name minors directly as beneficiaries on retirement accounts or life insurance policies.
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Consult with a professional about setting up a trust or custodial arrangement for minor children.
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Consider listing a trusted guardian or trustee to manage assets for any children you've named.
While you’re at it, double-check your life insurance coverage and beneficiaries too. Many firefighters, have additional life insurance (through work or outside), so ensure the beneficiaries on those policies are current. If you’ve welcomed a new child, consider adding them (perhaps as contingent). If you’ve been through a divorce, make sure an ex isn’t still listed (unless that’s your intent). Also, consult with a professional before naming a minor outright as a beneficiary (for insurance or retirement accounts). Instead, you may want to set up a trust or other mechanism, since minors can’t directly receive these assets without a guardian process.
3. Schedule Your Financial Plan Review
When’s the last time you gave your retirement plan a thorough review? We’re not talking about a quick glance at your account balance; we mean a 360-degree review of your pension status, 457(b) investments, insurance coverage, debts, and overall financial goals. During National Retirement Security Month, challenge yourself to schedule a 30-minute plan review.
Who do you do this review with? It could be with a financial advisor (Protection Red specializes in working with firefighters on exactly these issues), or it could be a meeting with your spouse to go over your strategy, or even a DIY session where you run some retirement calculators and reassess. The point is to dedicate the time.
Retirement Planning Checklist
Complete this checklist to help ensure you're on track for retirement success
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Project your pension benefit at your target retirement date (know your pension formula and maybe run a projection via your pension portal or HR).
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Log into your 457(b) account and review the balance, check how it's invested, and note if you're on track toward your savings goal. Are you too aggressively or too conservatively invested given your age? How's your asset allocation?
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Look at other savings: do you have an IRA, brokerage account, or maybe a side business? Factor those in.
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Think about insurance: do you have adequate life insurance? Disability insurance in case you get hurt before retirement.
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Debt and expenses: what will be paid off by retirement (mortgage? loans?) and what won't? How about college costs for kids? Make sure your plan accounts for these.
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Healthcare: if you plan to retire before Medicare at 65, have a plan for health insurance (some departments offer retiree health, others don't).
Bring It All Together
Retirement might seem far off, or if you’re closer, you might be feeling anxious about it. Both are normal. The cure is preparation. These three steps are not hard, they cost basically nothing (a small budget tweak and some time), and they can prevent a lot of “I wish I had known/done that” later.
At Protection Red, we focus exclusively on helping firefighters navigate their unique financial challenges. Whether it’s pensions, insurance, deferred comp, or legacy planning, we’ve got your back, so don’t hesitate to reach out if you want a clear roadmap tailored specifically to firefighters’ financial needs.
Appendix (Sources):
- https://publicpensions.org/national-retirement-security-month-why-public-pensions-matter-more-than-ever/ (citing NIRS data on Americans with no retirement savings)publicpensions.orgnirsonline.org
- https://publicpensions.org/national-retirement-security-month-why-public-pensions-matter-more-than-ever/ (citing Vanguard data: median 401(k) balance $27,376)publicpensions.orgnasdaq.com
- https://protectionred.com/why-firefighters-need-to-plan-for-the-retirement-gap/ (firefighter pensions often replace only 50–70% of income)protectionred.com
- https://www.law.cornell.edu/regulations/new-jersey/N-J-A-C-17:3-4.1 (New Jersey admin code – overtime not counted as pensionable income)law.cornell.edu
- https://whyy.org/articles/is-it-fair-for-city-workers-to-use-overtime-to-spike-their-pensions/ (Allentown, PA overtime spiking increased pension ~20%)whyy.org
- https://trajanwealth.com/blog/just-1-percent-more/ (scenario: +1% contribution = ~$42K extra over 20 years)trajanwealth.com
- https://www.irs.gov/retirement-plans/irc-457b-deferred-compensation-plans (457(b) contribution limits for 2023–2024)irs.gov
- https://www.corebridgefinancial.com/insights-education/the-importance-of-beneficiary-designations (53% vs 28% confidence with advisor vs no advisor, public sector survey)corebridgefinancial.com
- https://www.dol.gov/sites/dolgov/files/ebsa/pdf_files/2012-current-challenges-and-best-practices-concerning-beneficiary-designations-in-retirement-and-life-insurance-plans.pdf (40–60% of participants failed to complete beneficiary forms)dol.gov
