Advisor to First Responders Says Pensions Can Pose Planning Challenges

Few financial advisors have clients on the drug and gang task force, the joint terrorism task force and police precinct homicide squads.

Meet Craig Ferrantino, founder and president of Craig James Financial Services, who specializes in serving such workers and other first responders.

He helps them grow their retirement savings, and importantly, keeps their retirement assets — which include a pension and full Social Security benefits — from excessive taxation.

“As an advisor, you have to be very aware of first responders’ taxation in future years because they could end up being tax-toxic when all their sources of income are added together. This could throw them into the next tax bracket,” he cautions.

A volunteer fire police officer and volunteer certified advanced emergency medical technician himself, Ferrantino is driven by a dedication to look after his first responder clients’ financial and retirement planning needs.

“I feel like … I’m a first responder to the first responders,” he says in the interview.

The greatest challenge is getting in-person meetings because of first responders’ high-stress, demanding jobs, long work hours — sometimes stretching into the early hours of the morning — and their family responsibilities.

Therefore, regrettably, first responders have scant time to devote to retirement planning.

But since they’re familiar with work protocols, Ferrantino, a certified financial fiduciary, has created a list of “Retirement Protocols” for them — steps they need to take in pre-retirement, which he discusses in the interview.

Before going independent in 2007, he was with several large firms: JPMorgan Chase, Smith Barney and A.G. Edwards. He began as an advisor in 1997.

Eventually, “I got a little frustrated with the wirehouse thing,” he remarks, and opted to go on his own.

Based in Melville, New York, on Long Island, he serves first responder clients throughout New York state. He is fee-based and in addition, has a small commission business.

Assets under management total just under $300 million.

ThinkAdvisor recently interviewed Ferrantino, who was speaking by phone from Melville.

Emphasizing the value of avoiding the toxic-tax pitfall, he maintains that with first responders, “taxation tends to be a high priority. You have to pay attention to it.”

Here are highlights of our interview:

THINKADVISOR: You specialize in serving first responders — police officers, firefighters, EMS workers — throughout New York state. What has driven you to focus on this clientele?

CRAIG FERRANTINO: I feel like I’m helping people out, like I’m a first responder to the first responders. I want to take care of them.

I don’t see this as a job. I see it as a vocation.

What’s different about retirement planning for first responders?

No. 1 is that they have pensions, at least in my territory they do. Pensions are rare [nowadays].

No. 2 is that they usually have high job stress and work crazy hours. They see the importance of retirement planning but don’t have the time for it.

Having a sit-down meeting with them will usually take place in the evening.

Do first responders receive full Social Security benefits as well as a pension?

Yes. And they also have to take required minimum distributions [income from retirement accounts].

How does all that affect a first responder’s tax liability?

As an advisor, you have to be very aware of first responders’ taxation in future years because they could end up being tax toxic when all their sources of income are added together.

That could throw them into the next tax bracket at an older age.

So is this a challenge that’s posed in receiving a pension?

When you have a pension, the taxation tends to be a high priority. So with first responders, you have to pay attention to it.