How Should People With a Pension Think About Retirement?

How Should People With a Pension Think About Retirement?

Let’s make sure you’re on the path to financial success - then help you stay there!
The Money Guy Show takes the edge off of personal finance. We’re financial advisors that believe anyone can be wealthy! First, LEARN smart financial principles. Next, APPLY those principles! Then watch your finances GROW!

We can’t wait to see you accomplish your goals and reach financial freedom! New shows every week on YouTube and your favorite podcast app. Thanks for coming along on the journey with us.

[Hannahbenowitz]

People are going through a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.

[RepuBlicOfChaD]

My pension matches 2.25 to 1. It's equivalent to 22% of my paycheck. I also invest in a 457b and Roth IRA maxing out both. Started late at 35 with the 457 and IRA but, the pension is what will save me in retirement.

[suemurphy]

People also need to know that having a pension can greatly effect their ss benefits, assuming they worked the required quarters. My husband and I both worked public safety jobs with excellent pension benefits. We also worked 'regular' jobs (12 & 16 yrs), providing us with Medicare - but our monthly SS income was GREATLY reduced because of WEP.

[lilrog]

Well my life changed I'm medically Military Retired on 90%. I'm getting almost $3k a month + I'm a GS-12. I'm contributing Heavily to my government TSP.

[russellbaker]

The second portion of the video, where the guy on the right talks about how much risk a person with a pension should be willing to take on in their retirement investments, is worth a much longer discussion with far more detail. I, for one, think my pension represents all of my low risk retirement investments. So, my entire 401(k) is in equities. I weathered 2008 and 2020 just fine - no panic selling. I just kept buying my index and broadly diversified equities. The county I work for is in excellent financial condition, and has been for decades. I think people with a pension should consider being more aggressive in their 401(k) or other investments for these reasons.

[steelcastle]

To expand on a military pension, you can get more than 50% of your final pay rate (you can get up to 75%) as a lifetime pension.
Additionally, you get lifetime medical/medicine/dental coverage for you and your spouse for free (or a small fee) which saves lots of $$.
You also can get a tax-free monthly VA disability payment based on your rating (up to a little more than 4k if at 100%).
A military retirement can take lot's of stress out of retirement planning.

[saulflores]

Absolutely correct on supplementing your pensions. My wife and I both have pensions as a firefighter and as a Registered Nurse. We both participated in both of our employers 457/ 401 K options. We are very fortunate to have retired this year at 55 years old. Having lifetime medical is huge and are very fortunate for that. Both of our pensions have a 3% COLA which is huge as well. Fortunately once we reach social security age we will determine when will be ideal to start receiving that to supplement our pensions.

[CheJoffre]

Thank you for talking about this. It would be great if you could have an episode focused on Military/Federal Employees, pensions as a retirement planning factor being one of the main differences from what I can see. I invested in the TSP (govt. equivalent of the 401k) when I was in, but would have benefited from information like your "This $1 beer cost me $88" concept and should have invested more back then :) Especially as a young man in my early 20's at the time. I appreciate all the information you put out and am taking your advice to heart in my own planning.

[bkinouye]

A pension plus social security forms a solid foundation for retirement. But it's important to determine if you need a 401k/IRA to supplement that income. Having all three is a win-win scenario.

[fremontpathfinder]

I will have a teacher pension and social security with the windfall but it will still be decent. I will also have fully paid health benefits in retirement that will become secondary to Medicare so I will have no medical bills. I don't have a 403B and just a tiny IRA. Because we got a huge raise I decided to keep working for two more years. I do own a modest house. Even though I had very stressful years in teaching, I am so grateful for my pension and benefits. I love teaching and the pension kept me going through the 3 tough years I had.

[travis]

I would also suggest going 100% Roth for future retirement contributions if you are expecting a pension to cover a lot of your expenses in retirement. The pension will be taxable income, so you don't want more of that.

[kelvinwilliam]

I realized that the secret to making a million is making better investment. I always tell myself you don't need that new Car or that vacation just yet and that mindset helps me make more money invest:ng. For example last year I invested 70k in blue chip stocks and crypt0 s (with the help of my advisor of course) and made about 380k, but guess what? I put it back and traded with her again and now I'm rounding up close to a million. Delayed gratification always pays off

[michaelthomas]

I have a decent military pension coming at 60. It will cover more then my basic living expenses, housing, utilities, transportation, and food. My retirement investments are heavily weighted towards equities, much higher then standard wisdom for a person my age. When I hit 60, unless we're in a big dip, i'll reallocate to less risk but still probably more then the average retiree.

I look at that pension like a giant annuity. That's the fixed investment portion of my portfolio.

[DWilliam]

I have an old school pension and will be retiring next year at 59. I put about $40K into it and will get $86K a year, transferable to my wife. I also ended up working for the union toward the end of my career and will collect $14K a year from them. I’m ending up with $550K in 403b which spins a 7% fixed rate of return lifetime and a traditional 401K with $200K. I also will have zero premium lifetime healthcare with a prescription drug rider that costs me $900 per year. I have a paid off retirement condo and am now looking to purchase a place in the Caribbean. Life is good.

[neilmettheworld]

I think this is the tip of the topic. I would love a show that discussed defined benefits: annuities, social security, and pensions. You can go over contribution rates, vesting, where it falls in the 25%, counting it toward the net worth, and how pensions can negate some social security benefits.

[jose]

I have a government matching 401k plus a pension plus we pay into Social Security so it's a 3 legged stool that have for retirement. I am maxing out the contributions every year and hope to have at least 500k-700k when I retire. The best part is we get to keep our health benefits in retirement which will be a large savings because as we age we use our healthcare alot more.

[RickWatson-xugw]

I already own Shares of Tattooed Chefs, Apple and Amazon I will add TSLA shortly too. But I will appreciate a video on short term profitable investment that could generate up to $1M in passive income for retirement

[jowpopper]

The biggest benefit to a government pension for most is the paid healthcare associated with the pension. Majority of my co-workers that didn't have a pension from previous work weren't even thinking about retiring. Even though they had very good portfolios they couldn't weather the cost of health care.

[F.L.I.K]

I would love to see a Money Guy 1hr Break down of a Military 20 year retirement high 3 vs the New military Blended Retirement System with the TSP 5% match. Make it happen guys!

[kellyyork]

I have a pension, and I’m spending it on my grandchildren because when I’m dead, so is my pension. ; )