Your Pension and Investments Are Only Part of Your Retirement Plan

Elizabeth Nottling | Nov 3, 2026

Your Pension and Investments Are Only Part of Your Retirement Plan

After 20, 25, or 30 years in the fire service or law enforcement, retirement represents a significant milestone. You've spent your career preparing for the unexpected, serving your community, and working toward the day when you can step away from the job.

You've probably spent time reviewing your pension estimates, checking your 457 or deferred compensation balance, and calculating when you can afford to retire.

But there's an important question that doesn't always get enough attention:

Will your retirement plan continue to work when life doesn't go exactly as expected?

A pension and a healthy investment portfolio provide an important foundation. However, retirement readiness involves more than knowing how much money you've accumulated.

Research published in the Journal of Financial Planning identifies four interconnected risks that can affect retirement security: longevity, market, health, and decision-making risks.¹

Understanding these risks can help first responders and their families prepare for the financial realities of retirement.

1. Longevity Risk: Will Your Money Last as Long as You Do?

For many first responders, retirement can begin earlier than it does for people in other professions.

A firefighter or police officer who retires in their early to mid-50s may need their retirement income to support them for another 30 or even 40 years.

That creates a unique planning challenge.

Unlike many private-sector employees, first responders may have access to defined-benefit pensions. These pensions can provide a dependable source of retirement income, but they don't necessarily cover every expense throughout retirement.

Consider how your financial needs might change over time:

Your pension may provide consistent monthly income, but does it include cost-of-living adjustments?
Will your 457, IRA, or other investment accounts need to supplement your pension?
How will inflation affect your purchasing power over the next 20 or 30 years?
What happens to household income if you or your spouse passes away?
Will your spouse have sufficient income through pension survivor benefits and other assets?

A pension is a valuable retirement benefit. Understanding how it works alongside your other assets is equally important.

The question to consider: If you retire at 55 and live to 90, how will your financial plan support those 35 years?

2. Market Risk: What Happens When Investments Don't Perform as Expected?

Most first responders understand that investments fluctuate. What isn't always clear is how market performance can affect retirement income once regular paychecks stop.

During your working years, a market downturn may be easier to manage because you're still earning income and contributing to retirement accounts.

Retirement changes that equation.

If you begin withdrawing money from your investments during a market downturn, you may need to sell more shares to generate the same amount of income. This can affect how much remains invested for future years.

Financial professionals refer to this as sequence-of-returns risk.¹

For example, imagine two retired firefighters with similar pensions and identical investment balances. Both experience the same average investment returns over 20 years.

However, one experiences significant market losses during the first few years of retirement, while the other experiences those losses much later.

Even with identical average returns, their financial outcomes can be very different.

This is why retirement planning should consider more than investment performance.

Your pension, investment accounts, cash reserves, withdrawal strategy, and spending needs should work together.

The question to consider: If the market declined significantly during your first few years of retirement, would you need to change your lifestyle or withdrawal strategy?

3. Health Risk: Have You Planned for Healthcare Beyond the Job?

Healthcare is one of the most important considerations for first responders approaching retirement.

Throughout your career, you may have relied on employer-sponsored health insurance, union-negotiated benefits, or other coverage arrangements.

Retirement can change those benefits considerably.

And if you're retiring well before age 65, you may have several years to navigate before becoming eligible for Medicare.

Some first responders have access to retiree healthcare benefits, VEBA accounts, or other healthcare funding arrangements. Others may need to purchase coverage independently or obtain insurance through a spouse's employer.

The challenge extends beyond insurance premiums.

According to the CDC, more than 9 in 10 adults age 65 and older have at least one chronic health condition.² Research also suggests that a substantial majority of older adults will need some form of long-term services and support during their lifetime.¹

Healthcare expenses can affect retirement finances in several ways:

Insurance premiums and out-of-pocket medical expenses
Changes in healthcare coverage when retiring or leaving a second career
Prescription medications and ongoing treatment
Long-term care expenses that Medicare generally does not cover
Financial responsibilities if a spouse or family member requires care

For first responders, occupational exposures, physical demands, and the potential for job-related injuries may also influence healthcare planning.

It's important to understand which benefits continue into retirement, which may change, and what additional expenses your household could face.

The question to consider: Do you know what your healthcare coverage will cost after retirement, including the years before Medicare eligibility?

4. Decision Risk: Who Helps Manage the Plan When Life Changes?

This fourth risk is often overlooked, yet it can have a significant impact on first responders and their families.

Throughout retirement, you'll make decisions about pension income, investments, withdrawals, taxes, healthcare, beneficiaries, and estate planning.

Some decisions are routine. Others may have long-term financial consequences.

And circumstances can change.

A serious illness, the loss of a spouse, cognitive decline, or an unexpected family responsibility can make financial decisions more difficult.

Research indicates that financial decision-making abilities can decline with age, particularly when cognitive impairment becomes a factor.¹

This is why financial planning should involve more than one person whenever possible.

For first responder households, that may mean ensuring your spouse or another trusted individual understands:

How your pension and survivor benefits work
Where retirement and investment accounts are held
Who to contact regarding financial accounts and benefits
Whether beneficiary designations are current
Where important financial and legal documents are located
Who has legal authority to assist with financial decisions if necessary

Consider a retired police officer who has managed the household finances for decades. If that individual becomes unable to make financial decisions, does their spouse know how to access accounts, manage income, and coordinate with financial professionals?

Having those conversations before they're necessary can make a difficult situation easier to navigate.

The question to consider: If you couldn't manage your household finances tomorrow, would your family know what to do?

Why These Four Risks Need to Be Considered Together

The biggest challenge is that retirement risks rarely happen independently.

Consider a firefighter who retires at 55 with a pension and a well-funded 457 account.

Initially, retirement is going according to plan.

Several years later, a medical issue creates unexpected expenses. Additional withdrawals become necessary, but the investment market is experiencing a downturn.

Meanwhile, the retiree's spouse is considering leaving work to help provide care, potentially reducing household income and changing healthcare coverage.

Suddenly, a plan that appeared financially comfortable faces several challenges at once.

The pension hasn't necessarily changed. The original investment balance may have been sufficient under normal circumstances.

But the household's financial needs have changed.

This is why Anew Advisors encourages first responders to look at their complete financial picture rather than evaluating individual accounts in isolation.

Your pension, investments, cash reserves, healthcare, taxes, and family circumstances all influence your retirement strategy.

Retirement Planning Should Begin Before Your Last Shift

Whether you're five years from retirement, preparing to submit your retirement paperwork, or already enjoying life after the job, understanding these four risks is an important part of evaluating your financial readiness.

At Anew Advisors, we work with firefighters, law enforcement officers, and their families to develop financial roadmaps that reflect the unique benefits, career timelines, and retirement decisions associated with public safety careers.

Our approach looks beyond account balances to help you understand how your pension, deferred compensation, investments, healthcare expenses, and household financial goals fit together.

Your retirement plan should answer more than whether you have enough money to retire. It should help you understand how your finances may respond when circumstances change.

Ready to Take a Closer Look at Your Retirement Plan?

Anew Advisors offers a complimentary financial roadmap conversation to help first responders and their families better understand their current financial position and the decisions that may affect their retirement.

Whether you're still on the job or already retired, our team can help you review how the major pieces of your financial picture work together.

Connect with Anew Advisors to Start Your Financial Roadmap

No obligation to transfer accounts or change your existing financial relationships. Just a practical conversation about your financial future.

Sources

Financial Planning Association, Beyond Sequence of Returns: Four Risks to Retirement Security, Journal of Financial Planning, June 2026. Read the research.
Centers for Disease Control and Prevention, Preventing Chronic Disease, 2025. Read the CDC publication.

Disclosures

Anew Advisors, LLC (“Anew Advisors”) is a Registered Investment Advisor registered with the State of Wisconsin. Registration as an investment adviser does not imply a certain level of skill or training, and the content of this communication has not been approved or verified by the State of Wisconsin or by any state securities authority.

This material is provided for educational and informational purposes only and is not intended as individualized investment, tax, or legal advice. Investment strategies involve risk, including the potential loss of principal. No strategy can guarantee investment results or protect against losses. Individuals should consult appropriate financial, tax, or legal professionals regarding their specific circumstances.