Episode 89 – Retirement mindset: Jacob
Balancing student loans, saving for your child’s education and planning for retirement isn’t easy, but it’s a challenge many parents face. Jacob talks about navigating those competing priorities and the lessons he’s learned while trying to find the right financial balance. He also reflects on his new position as the Executive Director of The Law Enforcement Officers and Fire Fighters (LEOFF) Plan 2 Retirement Board.
Episode transcript:
[music intro]
Jenny
Welcome back to Fund Your Future with DRS. Today we’re going to continue our interview series of retirement mindset, where we’re interviewing folks about how they’re thinking about retirement and to help us with our interview, we’re welcoming back Christine as a co-host to help with this conversation. And today we’re joined by Jacob, who is the new Executive Director of the LEOFF Board or the Law Enforcement Officers and Fire Fighters.
I think it’s specifically the LEOFF Plan 2 board, and they are part of the larger public pension ecosystem in Washington. So, we’ll learn a little bit about what that means. We are looking forward to hearing about how it’s going for you in this new role and talking a little bit about your financial future.
Jacob
Thank you.
Christine
What brought you to work at the Law Enforcement and Fire Fighters’ Plan 2 retirement board?
Jacob
Well, I guess start with my state government career. After graduating from law school at Gonzaga, moved to Olympia, without a job. I figured it would probably work out, with state government here. And luckily it did. The first job was with the state Senate. They hire kind of a new crop of young, attorneys to work during the legislative session.
And then they maybe keep one of you on permanently. And so that I was not that one. So, I went to work for a state agency and then kind of worked my way up and continued to have an interest in working with the legislature, working in policy development, found that research and writing interesting. Didn’t go to law school because I’d like to argue and wanted to be in court.
And I went because I was an English major and, I didn’t want to be a teacher at that time. Looking back on it, maybe being a teacher would not have been that bad. So, I kind of worked at a few different agencies and then worked at Department of Retirement Systems that got hired to be the legal and legislative services manager.
I did that for a few years and then took a job at Department of Revenue, working for a former boss of mine who had become the deputy director there. And he hired me. And then after a little while, I realized I kind of missed pensions, that I had kind of struggled to build up all this knowledge in it. An opportunity, came up with the LEOFF 2 board.
They were hiring a research and policy manager. And so, when ahead and took that job and my job there was, I got a break from managing people and, got to really just focus on the, research and writing and, enjoyed that. And then I’ve been there for about eight years, and our executive, the original executive director from when the board was created over 20 years ago, just retired, and the board hired me to fill his position.
Christine
So, you’re only the second person to ever hold this role?
Jacob
I am, and I’ve been in it for five, six weeks.
Jenny
That is fascinating. That is quite the journey of career, of going to law school and then working in public government. And now being the head of a board.
Jacob
Yeah. And I didn’t like seek out retirement. It was actually. So, when I kind of left out when I graduated from law school, I met my future wife at law school, and we both moved here without jobs because in Spokane there’s like 100 new, fresh graduates from Gonzaga every year. So the job market’s not great. And her first job, was actually at Department of Retirement Systems.
And so she worked here first. Kind of helped at least spark, if not an interest, at least some knowledge about pensions. You know, some guilt trip about like I need to save in DCP. I need to start doing that now. I remember pushing back on that like, “but I have a lot of student loans, I’d like to pay those off first,” but then she left here and kind of random how I got the job opportunity here.
I was working at Liquor Control Board after the state had legalized marijuana, and I figured that was kind of a once in a lifetime opportunity to work there. And so, I was the got hired as a risk manager there when they were going through the initial implementation of, legalizing marijuana. And I got to give a presentation to Governor Inslee, and the former director of DRS was there, and she talked to me and encouraged me to apply to this job at retirement.
And, and then she had known my wife in the past. Yeah. So, kind of how I ended up in retirement. And then I just found myself enjoying it. I think it’s different than a lot of what a lot of other state agencies do. I worked in a lot of agencies that are around kind of licensing and then enforcement of licensing.
And I think it’s a little easier with retirement to connect to the people you serve and to see how you help them and how you can really help public employees.
Seth
So, you said you’ve worked in pensions for over a decade, around a decade, and you start off maybe a little bit skeptical of saving for retirement. Most, 20 and 30 year olds are. But how has it shaped your thinking or how has you’re thinking about pensions in retirement evolved over time?
Jacob
Yeah, it’s just been a real kind of slow growth as far as how I mean, I think there was that awareness that it was something I should be doing, but it was hard to see yourself at that age. I think when you’re 25, it’s just hard to project out that far. It’s hard to project out your career. Am I going to work in state government for my whole career?
It’s just hard to imagine. At least it was for me that anything would go, you know, that far out. But I think starting to save a little bit in the DCP. And my wife guilted me into putting at least a couple percentage, you know, in their, of my pay, early on and then kind of getting and tried to just not really look at it, leave it alone.
But then you start to see it build up. And I think there’s just a little bit of that competitiveness and she was saving way more than me and is, I think, still way ahead of me.
Seth
Well, she’s older.
Jacob
Yeah. Oh, that’s true. That’s true.
Seth
Make sure you get that in.
Jacob
Yeah. I’m glad that’s in the podcast. We’ll find out if she listens. Yeah. As far as personal savings. But then you start to find out just more what you can do with that money. I think that’s something that, I’m not someone who wants to think a lot about money. And I think that’s been a driver for me.
Which maybe doesn’t sound like someone who would be drawn to working in pensions, but I’m not drawn to. I don’t want to be someone who’s following the stock market closely and worrying about that. And I think part of taking a public employee job is you or you just know, as much as people sometimes don’t have the nicest things to say about government workers, you know, that government workers have good benefits, or at least that’s the story you hear and kind of common knowledge, and then just realizing how the pensions are one of those big benefits that maybe you give up some other you could potentially
make more money or pursue other things. But the pensions are really, especially nowadays, a kind of remaining great benefit that public employees tend to have. But then learning more about some of the other benefits, the one that I’m most excited about, and I try to talk to people about, is being able to purchase an additional annuity that when you save that money in your 457 or DCP plan, then you can convert that to more pension when you retire.
And then for me, my dad is, retired recently as a PERS employee. And so, it kind of went through that process of telling him about this benefit and trying to convince him that that might be a good idea for him, and kind of doing the sales pitch to him of what I see the benefits. For me personally, of like, you know, do you want to be worried about the stock market?
Do you want to be glued to what’s going on in the national or international news and [be] stressed about that? And have you thought about how you’re going to spend down that money you saved? And I think just kind of in that sale, you know, talking to him about it kind of made me believe in it more and more. You know, that’s one area, I think, where my thinking of pensions and retirement has changed.
Seth
Yeah. It’s interesting what you said about as a public employee not knowing that you’re going to do this for the rest of your life. And I think for a lot of the customers we serve, there’s a wide variety I think of, like the folks you work directly with in police and fire. Oftentimes that is a career and sometimes it’s a second career.
They were in the military or did something else first, but oftentimes it’s folks who start working in their 20s or 30s and then think like, oh, I’m going to do this until I’m 50 or 60. And kind of and I think similarly with teachers, folks who work in schools oftentimes think like, oh, this is my career when I get started.
And that might make retirement more real, or it might make it less real. You don’t have to think about it because it’s going to be there at the end when I get done. But I think oftentimes people in local governments or cities and counties, they don’t have that plan from the start.
Jacob
Yeah, I think a lot of times, you know, my experience, my wife’s experience, it wasn’t like it was like, oh, we got our this has been our dream job. That first government job was our dream job. And that’s my career. And it’s more you kind of feel yourself. There’s some level of interest. That’s why you apply to it.
You’re excited when you get it, but you don’t really know what future opportunities there are. I think with police and fire especially, they do such a better job of talking about retirement and pensions and their benefits, like from the get go. And I think that’s part of what I found this podcast interesting. We were talking beforehand about the listening to the episodes where there’s individuals you talk to about what their plans are.
Those conversations happen a lot more, with fire and police, especially fire. I think just the nature of their job of being around each other at the firehouse, having more of these discussions. You hear a lot about them. When they hire someone new, like they’re immediately told you’re, you know, this is your 457 plan. You are saving money in it.
Fill out the paperwork here in front of me. You know, you need this too, fill it out. And then there’s just more open conversation about finances and what you’re going to do, than I think occurs in a lot of other jobs.
Jenny
I love that. What if we could do that with other employers of different kinds where it’s like, here’s this little group of people that are like 457 cheerleaders and they’re like, okay, we’re going to take the new people under our wing, and we’re going to be like, hey, here’s where you need to save.
Jacob
Yeah. And you think about it, you’re kind of left alone a lot with, or at least I kind of felt that way of like, here’s your pile of paperwork as a new government employee. And I’m at that point fresh out of college. I’ve never had, like a real job. And then, yeah, pile of paperwork, all the trainings you have to do and learn your new job and you’re just kind of left at your desk to do it.
And maybe the person next to you can you can ask them for help, but you don’t really know them and know whether their advice is going to be the best advice.
Christine
Did you make an active choice or were you a default?
Jacob
I made an active choice and I I’m learning to not regret it. So, I did Plan 3. My wife, she did Plan 2. So, at the time I think I it’s hard to remember exactly why. But I think I bought into the: this is a better option if you’re not going to work in state government your whole career. And I didn’t really see myself doing that at the, you know, the first job. I didn’t know.
Christine
I love Plan 3. I defaulted, though maybe we’ll need to talk about why it might be the better plan, even if you stay with service for a long time.
Jacob
Well, and it has been interesting to, just in my job. I work a lot with Seth on getting data for policy proposals and then also just hearing, you know, about what he’s looking into and gathering data on and just kind of the look at Plan 3 versus Plan 2 and how there’s not really much of a difference in the end of where you’re at.
But I think I’ve become, much more fiscally conservative, with my own personal finances as I’ve gotten older. And definitely part of why the annuity appeals to me, kind of the set and forget, like, you know, you can in retirement, just count on a paycheck. And it feels like much less of a transition. You’ve been earning a paycheck your whole adult life, and that can just continue into retirement instead of now being faced with these new decisions that you have to make.
Jenny
Since you mentioned personal finance, that’s a great jumping board for our next topic. Can you talk a little bit about your own personal journey? You obviously have several children and how you’ve balanced paying off student loans, saving for kids education with your spouse, and maybe start with how old your children are right now.
Jacob
Yeah, yes. I’ve had two kids, a 13 year old and a ten year old. So the college thing is getting a lot more real. Like, you know, when they’re in elementary school, preschool, like, you know, we opened, GET accounts for them or, when they were born, started putting a little bit of money in there and congratulating ourselves for doing a good job of doing that.
But then you start looking at it more closely of like, oh, man, you know, when my son was about done with elementary school, okay, where are we at? How close are we? How much are those credits? Yeah. So, I as far as, like, balancing those different parts of it. I remember when I started working at retirement, having conversations, with Seth at that time because I was still paying off my student loans, had bought my first house, had one kid, and then shortly after that, the second, you know, asking Seth for the answer of what should I pay off first?
Which is the better one to do? And then him being frustrating and not just telling me the correct answer. And, I learned more and I understand that, as far as it’s all a balancing act. There is no correct answer. I think the kind of the correct answer is that you’re thinking about it, you’re concerned about it, you’re making an effort on those things.
The kind of order I went in is I tried to always save a little bit into DCP that did fluctuate. As you know, one kid was born, second kid was born, and then my wife took time off from her career to be home with the kids. And so, you know, the amount I was putting into DCP went lower.
When I got the job at DRS, I made a real effort to pay off my student loans. I just wanted those done with. Yeah, tried to tackle that one first and then focused on making sure I continue to put something into my DCP. And then really in the last 4 or 5 years, started really ramping up the college savings.
Just with getting this new promotion. I took the money, I got from getting a raise and just split that in my kids GET accounts to just finish paying that off as quick as possible so that, so we get the benefit of that and then we’ll see if they choose, private schools and, blow up all that savings.
But everyone I work with, their kids seem to go out of state private schools. So, yeah, we’ll see if, in-state public schools are a good pick.
Jenny
We talked a lot about how you’ve saved. Is there a particular financial habit that you’re proud of or one that you’re still working on?
Jacob
Yeah, I think trying to live beneath my means. Actually, when I graduated law school, there was a speaker, and I didn’t even hear her say this, but my dad, like, immediately told me about it afterwards, about how that was such a great thing that she said. And then he reminded me of it many times. I think it spoke to him because I think he wished he had lived more like this, which was she really tried to focus on living beneath your means, that not it’s not living within your means.
Live beneath your means. And I think my wife and I have tried to do that, and not because the graduation speaker said it, but I think it just appeals to me from someone who doesn’t like stress. I don’t want to add stress. I don’t want to feel like a jerk. I have enough money to have the things that I value, and I don’t want to put myself in a position where I am unnecessarily stressed out because of wanting more.
And I think there’s been moments in life where you kind of are really confronted with whether you’re going to be like that or not. Like, I remember we bought our first house, the bank, wanting to ask, do you want to know what you’d be approved for? No, I don’t want to know that this this, you know, this three bedroom, two bathroom is great.
And then other moment, you know, when you want to car. And then there’s smaller moments, but I think there’s, you know, moments like that where you have to really see if that’s the way you’re going to be or not. And I think I’m proud that my wife and I have made decisions that have allowed us to have the lifestyle that we want to have, and then there’s always examples of people who are better, you know, and save more. But, you know, try to find a balance that fits you.
Jenny
I love that. Yeah. It’s not really about being better. It’s just about the kind of lifestyle that you want really.
Jacob
Yeah. And I think when I talk to firefighters and police officers, it is interesting to hear they get to retire at such a younger age. So, they have, you know, different goals and different expectations of what they want. I wish we had data on this, but like how much the average firefighter and police officer has in their 457 accounts on top of their pension, but I imagine it’s much higher than the average worker because they are very aware of a shorter shelf life on that career.
And while they often want to pursue something else after retirement or have ideas about how they can make some additional income or work a little longer, most of the ones I talked to, you don’t want another full-time job. When they’re done, they’re looking forward to retiring and maybe working a little bit, supplementing their retirement income.
Jenny
I could imagine how working around law enforcement and firefighters would give you very good perspective on retirement.
Jacob
Yes. Yeah. And then just how hard it is on their bodies, you know, and another and there’s other public employees like that too that are more physical and it’s a difficult job to do into your 50s and 60s.
Seth
It’s one of the things I feel like I’ve heard frequently over the last few years. Most people end up stopping work before they want to, I think more obvious with physical situations like that, but sometimes there are accidents that happen. Or are you going to take care of family members? Or, something comes up. And the idea of, “well, I can always just work longer,” is oftentimes people’s default retirement plan, but that’s not always the case.
And more often than not, it’s not the case, where you actually do end up having to stop work before you would intend to.
Jacob
Yeah. And that kind of connects to what I was talking about. I don’t want to put myself in a financial situation where, you know, life’s good right now. Everyone’s healthy, you know, not to be morbid, but you can’t count on that. And you have to, you know, I’m someone who stockpiles my sick leave.
Yeah, I don’t want to have to put myself in a position to stress about those types of things. And, and it’s nice that your pension and then other benefits you can get through the state with around pensions can help with that. Yeah. And I keep talking about DCP for whatever reason, but just that the automatic savings of it I and that really I think it’s something I find interesting with pensions and policy is the behavioral stuff where you can take advantage of kind of innate human behavior to help people save more and do a thing they want to do.
It’s not like you’re tricking them, but you’re kind of helping them trick themselves into doing the thing they know they should do. And I find that part fascinating.
Jenny
That’s great. Thank you for sharing. And so now to kind of switch more to the non-financial side when you picture your own retirement. Not that it may be that close or when you do get there. What does that look like?
Jacob
I always feel bad with this question. Like I’m going to have like a world trip I want to do or something, and I just don’t think of it that way. I try to do the things I want to do now and like I said, think about retirement as I want to put myself in a position that I have flexibility, I have options.
If I try to think about what I’m doing, the future, I think about my kids, but I think about what kind of adults my kids are going to be and, you know, get to spend time with them. I also don’t want to be someone who, like, just is dying to be done working. You know, I’ve got a lot of years left.
I want to enjoy what I do, with my career and not be someone who’s just really, really hyper focused on, like, life will be better when I retire. I think for me, like retirement is, I want flexibility to do what I want to do. You know, not that my wife and I don’t talk about it like, you know, would we move?
Would we stay here? Would we go to a city? Would we live out in the middle of nowhere? Would we, you know, follow our kids wherever they end up? I think just having that flexibility and then taking care of yourself health wise as best you can to also kind of ties into that to put you in that position.
Christine
Yeah. Do you want to retire? It’s a strange question, but in 2026, there’s a lot of flexibility in the world with how we work versus when we’re all entering the workforce. Many years ago.
Jacob
Yeah. I hadn’t thought about that. I do know, like, I could see myself being someone if the right opportunities are out there. Like, I definitely want to retire, but I do get people who want to continue to do something where they feel like they’re providing that service. You know, it’s not just ego. There’s like a value you get from yourself in the job you do and finding some way to still have that.
I know I’ve watched relatives, who kind of did that. And then they backed off real quick and were like, no, no, I was ready to be retired. No, that was a mistake. I was I’m done. So, it’s a little hard to predict. But I could see having some interest in, doing that, but I don’t know.
I think for me, it would probably be more I don’t think about working in retirement. I think more about, hobbies and doing things, you know, doing stuff outdoors. Like I said, not planning a world trip or anything, but just having more time to travel a bit, get outside, do things.
Christine
What’s the number one hobby you think you’d spend more time on if you didn’t have to work every day?
Jacob
Well, I definitely, I think, read and write more of those are things like I like doing former English major. Every former English major has, the great novel that they have not got around to writing. And I do not want to put that off till retirement. I know that’s… And especially now my son is quite the cartoonist.
He draws, he makes comics and I am so proud and jealous of him. I think it’s like just his work ethic is just. The kid just plugs away at it. He sticks to his schedule every day. He does a little bit of work, and then over the course of the year, he knocks out a couple of comics and they just keep getting better and better. And that’s what a future artist looks like. That’s how you do it.
Christine
You’ll have to follow a schedule for your novel.
Jacob
Absolutely. And he gives me a bad time. He knows I wish I had his work ethic with that, that it’s not some innate talent. It’s just, if you really like something that you just have to.. Crazy, you practice it, you get better at it. Who would’ve thought?
Christine
Well, depending on the subject and the genre, I look forward to reading a future novel of yours.
Seth
It is one of the things. I mean, I think that can be scary about retirement, though, like the lack of structure or the lack of constraints and how important constraints are for our creativity. People need deadlines. Right? Like if you have infinite time to do something, you’ll never get it done.
Jacob
Yeah, absolutely. That’s what I loved about, journalism and newspapers is you have tight deadlines and you just got to do your best, and it is what it is. And then you get to move on to something else next week. Not to get totally off topic, but that was just something a lot of us dealt with Covid and work from home.
And then like, my whole schedule’s thrown off. There was all these pluses of I got to spend way more time with my kids and be home around them more and more time with my wife. But still, I think still with that work from home, there is just I’m someone who likes to be organized and have structure and, and then I’ve kind of got to watch my parents do that.
They’ve been retired now for two years, watch them try to develop their routine. Glad there’s been lots of healthy habits that, you know, in the Wenatchee area. Lots of, good hikes and walks to go on. And I think to believe you’re just going to completely change who you are in retirement is probably not going to happen. So, you know, developing those habits and not putting those things off till retirement is important.
Christine
I’m going to need to take that in, because that’s my big fear is the lack of structure and deadlines. I’m motivated by anxiety. That’s what fuels me.
Jacob
Maybe I shouldn’t admit that that’s my… that’s why I like the LEOFF 2 board. One of the things is we have monthly board meetings. I know when my deadlines are. It structures my month. I know if I put something off then I’m going to have a busy weekend. But there is comfort in that.
I know when I have to have something done by help with not having so many choices and decisions to make.
Seth
Your answer, I think, ties into our final question for you and tying back to your actual day job, and what you’re doing with the LEOFF 2 board. So are there things that you’re excited about or interested in, or hopes that you have for the work that the LEOFF 2 board is doing over the next 5 to 10 years? Maybe even sooner than that?
Jacob
Yeah. No. I think it’s an exciting time to be starting this new role with the board. Like I said, just the second, person to hold this position and it’s becoming a more mature plan. There’s been some major benefit improvements passed that were endorsed by the board and passed around disability benefits, death benefits, death benefits being for, survivors of members killed in the line of duty.
That was a major benefit for the board that they had really worked on, had done work for 20 years to put themselves in position to pass. And that increased the, multiplier, for certain years of service for firefighters and police officers. Which was a, you know, a really big deal to them. And the board had made a lot of, I would say, conservative financial decisions over those 20 years to put themselves in a position to prefund this significant benefit improvement.
And I got to work on that and write that bill. And so that was exciting. But with all of those major accomplishments the board has had, I really view the next phase of the board that I’m excited about. I don’t think government is always the best at bragging and advertising about the cool things it’s created, where the private sector kind of fills that space, and government does a lot of cool things that are great for employees.
And I think around pensions, both the LEOFF 2 board, DRS, the legislature, you know, with help from the actuaries and the investment Board, have created some of these benefits. And so one of my goals is to work to educate our members on those. And just to go back to the example I keep talking about, the purchase of additional annuity benefit, I worked with Seth to get some data on how what the usage of that is, and only 10% of our members use that.
And I think a lot more than 10% would benefit from it. And so right now we’re working on a communications campaign, and then we’re going to work on gathering additional data from employers and members to just get a better picture of where our members are at, what they have at the local employers versus what they have at the state level and what their needs are.
Kinda get out there and talk to members more. Been a little inspired by your guys’ podcast, and we’re not going to copy the podcast. So, we’re going to take the video route. We’re going the other direction. We’re trying to when we go to conferences, we’re doing, short videos with firefighters and police officers to ask them similar questions to what you’ve asked me.
But very quick, we’re not we’re not, you know, keeping them for an hour, but just I think it’d be really beneficial for our members to hear from their peers. It’s one thing to hear from people like us in this room. My hope is it would be fascinating for them to hear from other firefighters and police officers around the state about, you know, what they’re doing to save for their retirement, what their goals are.
Talk to retirees. You have these decision points you make at that time. You know, talk to them about what they’re happy they did, why they’re happy about it, what they regret choosing, what they wish they had chosen. Try to get some more of that information and get that in front of our members. So I think that’s part of what I’m excited about.
And then with the board, it’s just continuing to study other, benefit improvements. And then one of the other parts of what the board does is, we set contribution rates for the plan to ensure that the plan remains fully funded. I always like to tell our members, whenever I get in front of them, the plan is 102% funded as of today.
Or as of the last actuarial evaluation. There’s always a lot of misinformation. Once again, the news loves to highlight, you know, pension plans that aren’t doing well and bad things going on in government and not, not the good things going on in government. But, pensions in Washington state are an area that is going really well.
The plans are all well funded, something our members and public employees around the state can count on.
Jenny
Excellent. I think that’s a great way to wrap up. Yeah. Thank you Jacob.
Jacob
Thank you.
[music outro]
Disclaimer
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