Going from defined pension to 401k..

[FiremedicMike]

I know I know, who would ever leave the FD, the pension is so great. But, I'm considering leaving for a private sector job that intrigues me, and I'd be forced to go into a 401k retirement, left with likely cashing out my defined benefits pension to roll over into my new retirement account.

I'm certain there are others out there who have done this, I wanted to know your experiences. This new employer does have a 50% match up to 4%, so I could put in 8% and get 12% total each year.

At the end of the day, when the rubber meets the road, can a 401k ever stack up to our plan? Having been a career firefighter most of my life, I've not paid in to social security either, so I don't even have that cushion. This weighs heavy on my mind and is a huge factor that I need to consider before I jump ship.

[fire49]

how many years do you have in the pension?

can you leave it there and eventually draw from it??

I did six years of matching, great free money and it grew very quickly

[FiremedicMike]

I have 12 years in now, I would have to stay another 3 years before I could eventually draw from it. At 15 years, though, the percentage is so low that it would only end up being about $1000/month.

[fire49]

Sounds like you need to talk to a financial adviser

A roll over should not lose money if done correctly

You never know now a days some gov pensions are going in the hole

And the country's financial system continues to go into the hole

Do you want to say your age?? And do you feel the private job is going to last for many years??

[FiremedicMike]

I'm in my early thirties. I think that the private job will be around for awhile, but in today's climate nothing is really secure. I do feel though that my resume is strong enough that I could find something else if necessary.

[fire49]

Sounds good, at least you are not just leaping

Once again would talk to financial person

[scfire86]

Sounds like you need to talk to a financial adviser

That's the best advice. Talk to a CFP or CPA familiar with tax law.

[paulLepore]

Private sector jobs come and go. In the fire service you are not likely to lose your job (unless something catastrophic happens). You would have to weigh the benefits of how much more you would make in the private sector. IF, and that's a big IF, the pay and benefit package were lucrative enough it may be worth considering.
In the private sector your boss can change. With a change you must prove yourself to a new boss. If he doesn't care for your performance you can find yourself out on the street.
Another factor to consider is the retirement AGE. What is your retirement age if you stay in the fire service? I would really think twice before leaving the fire service.
I own a company (20 full time employees). While private industry can be lucrative, there is great security in knowing that a paycheck comes in on the first and the fifteenth. Good luck with your decision.

[upallday]

Man....that's a tough one.

Like the poster above me said, leaving the fire service is huge. As appealing as something may look right now, it could change fast.

Besides a financial advisor of some sort, I'd talk to someone that has left the fire service to pursue something else. We have quite a few guys that have left to do other stuff and come running back in a few months. Often times these guys are making more in the private industry but they quickly realize it isn't all about the money.

Life changing decision.
Research it. Think about it and do what is best for you.

Good luck.

[FiremedicMike]

I appreciate everyone's input. I am fully aware of the gravity of this decision and the fact that it goes beyond dollars and cents. As a matter of fact, I'd be taking a pay cut to leave, but as my family and I discuss, and as been stated here; "pay isn't everything".

[Want2BAFF.]

FireMedicMike,

Thats a tough choice- I wish you and your family the best in your decision. I am not a FF yet, but I hear what you're saying about pay not being everything. I am determined to be a FF but I have had a couple of good offers lately. My former employer reached out to me recently, and I loved that job. Also, I have been reached out to by another company wanting to hire me and the pay is twice as high as what I'd start out as a FF. I would be getting insurance, 401K, etc at the two other jobs and a defined pension working for the fire dept.

As a FF where I am in NC, the pay and pension would not add up to what I could earn, particularly at one job I was offered, but I want to be a FF, so I kind of know what you're going through. Wish you luck!

[Here and there]

If you are in your 30s, I wouldn't worry about Social Security except for the chance of work ending injury (disability). You only need 40 quarters (10 years) to qualify, and while benefits are based on lifetime earnings the new job will presumably have you working into your 60s, so all you have really lost is a few years of adult employment and 10-15 years of low paying young adult jobs (for the average person, not neccessarily you). If you were in your 40s or 50s it could be an issue.

As to the benefits, I'll leave that to you, but agree with those suggesting a finacial advisor.

[DeputyChiefGonzo]

Just remember that the grass isn't necessarily greener on the other side of the fence...

[FiremedicMike]

Just remember that the grass isn't necessarily greener on the other side of the fence...

Yep, I appreciate that.

I'm also trying to force myself to realize that I'm in the honeymoon phase with this new job (I've been doing it on my off days) and that I need to give it at least a year to see where I'm at.