Tuesday, August 4, 2009

This Explains A Lot

Barry Ritholtz posts today about a New Jersey firefighter stuck as the only tenant in a Florida high-rise condo. Although Ritholtz focused on the real estate aspect of the story, a few of the commenters on the story itself wondered how exactly a firefighter could afford the $430,000 vacation home. The answer is simple: he works in New Jersey.

According to a public salary database at the Asbury Park Press, the firefighter made $152,210 last year ($117,612 from the fire department plus $34,598 from the town). Even better, the firefighter, now 45 years old, plans to retire in four years. Assuming the standard 25 years of service, he'll pull down 65% of that salary -- or $98,936.5 per year -- in retirement, plus of cost-of-living adjustments (and likely full medical benefits, too).

Obviously, firefighters are putting their lives on the line, so I'm not complaining about them specifically. But when you expand these sort of salaries and benefits to policemen, teachers, and every other state and local employee, it adds up. It's no wonder that, according to the Tax Foundation, New Jersey ranks first out of all 50 states in terms of individual state and local tax burdens, while also having the worst tax climate for businesses in the country.

UPDATED: Included salary breakdown.


Ritholtz said...

Most dangerous jobs -- Fire Departments and Police Departments -- have a very generous retirement plan.

After 20-25 year service, you usually see a 65-75% retirement pay.

Jack said...

Yes, I don't care about paying firefighters so much in particular, it's more that these sort of benefits are available to all state and local employees. New Jersey's unfunded pension liability is about $130 billion, according to this post: