Firefighters & Police Officers

With a keen understanding of government sponsored pension systems, we work to ensure that you fully informed of your retirement options. Our expert background in Deferred Compensation (457 plans), Deferred Retirement Option Plan (DROP), and specific nuances of these plans allows our clients to make informed decisions that can positively impact their financial future.

Police and Fire Department Pension / Retirement

Andorra Investment Management’s founder, Kurt Stabel, has served as an elected official of the City of Los Angeles Deferred Compensation Plan. He represented over 12,000 Los Angeles Police and Firefighters on the board of directors. We are intimately familiar with local government entities and the City of LA’s pension system and Deferred Comp plan. We use this experiences, plus decades of experience in investment management, to help our clients improve their investment results.

You have a background in serving and protecting the public, we want to help protect you and your family's financial future…by enacting a sound retirement plan.

Retirement for firefighters and police officers is typically composed of three sources of income:

Pension

Pension: a "defined benefit" is a fixed dollar amount typically paid monthly to you, the beneficiary (value is guaranteed by a government entity and does not fluctuate, apart from COLA adjustments).

Deferred Compensation 457 Plan

A Deferred Compensation Plan (Deferred Comp) is an effective saving and investing tool for government employees—especially when managed correctly!

To get technical for a moment: Deferred Comp is a governmental plan eligible under Section 457(b) of Internal Revenue Service Code which allows employees of sponsoring organizations to defer income taxation on retirement savings into future years. Local and state government entities provide this vehicle to help employees supplement their retirement.

Andorra works closely with you to manage your Deferred Comp Plan.

We will ask you some critical questions which will drive your investment decisions and help to:

  • Develop a clear "Investment Objective"
  • Determine your own "Risk Tolerance"
  • Set a "Time Horizon."

Putting these pieces together will drive your asset allocation plan.

DROP Plans

On May 1, 2002, the Los Angeles Fire & Police Pensions (LAFPP) officially launched a voluntary program within their pension system called the Deferred Retirement Option Plan (DROP). It is meant to enhance the main LAFPP by providing another way to save for retirement.

Per LAFPP: "This program allows you to have your monthly retirement benefit deposited in an interest-bearing account while you continue to work in your current department and receive your salary and benefits as an active employee."

For detailed information read the official LAFPP DROP Handbook.

While there are many benefits to participating in DROP, we advise that you consult with a financial advisor to ensure best practices are being followed.

Other Income

Other Income: savings, rental and investment income, businesses, spouse’s income and retirement assets. This can add a new level of complexity, but should be carefully considered to ensure you are taking maximum advantage of other sources of retirement dollars.

More about Deferred Compensation and DROP which are incredibly powerful tools if used properly! Click here for a White Paper from Andorra on DROP considerations.

Many variables have to be considered to make these investments work to your advantage, so your money will continue to grow even after you retire. With your financial advisor you must determine your investment objectives, risk tolerance, and cash flow requirements (income replacement) for these vehicles to be effective.

Deferred Compensation Plans are a method for you to defer income taxes and save for retirement to replace your income when you retire. This allows you to:

  • Earn money now and defer paying taxes later when your income will be lower and thus pay less overall taxes.
  • Deferred Compensation should be your FIRST CHOICE as a retirement savings vehicle before any other option. If, you are able to max out on your annual contributions then additional investment vehicles can be considered.
  • Investment accounts should be actively managed to foster current growth which will help maximize future potential income.
  • You must develop a retirement plan and communicate expectations for cash flows and income levels to your financial advisor.

We would be happy to share our experience with you regarding the City of Los Angeles, the city’s 457 Deferred Compensation Plan, and the current dynamics of the City of Los Angeles Fire and Police Pension System (LAFPP).

Deferred Comp and DROP plans

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