Do Pensions Make a Difference in Retirement?

With fewer retirees having pensions, it begs the question: how much of a difference does a pension make in retirement?

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The Pension Gamble - FRONTLINE

Timestamps
0:00 - Do pensions make a difference in retirement?
1:03 - Pension data for the U.S.
1:44 - Our assumptions
3:01 - Current retirement savings
3:28 - Total savings needed for retirement
5:00 - How much do they need to save?
6:51 - Having a pension can make a difference

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--- About Patrick King CFP® ---
Patrick King is a fee-only financial advisor in Atlanta and the Founder of Prana Wealth. Over his career, Patrick has helped CEOs, all-star athletes, Grammy-winning artists, and many others build their wealth, retire sooner, and create a legacy. Patrick enjoys yoga, mountain biking, golf, travel photography, and Clemson football.

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[blockmasterscott]

Oh yes, pensions matter. I got hurt at work at the very end of my 20 years in a school district and had to retire, and luckily for me, I have that 20 year pension to support me.

I had relatives look down on me because I was a custodian with no college education, but I'm not even 60 years old yet, retired with that pension, and enjoying life. The same people that put me down 20 years ago are stuck working. Go me! Sometimes in life you have to pat yourself on the back and tell yourself "well done".

[kenjones]

I’m a law enforcement officer in NC. We receive a law enforcement supplement to our pension which makes our pension 100% of our top 4 year income. Also have $350k in my 401k which the state contributes. Also we have the state Heath care for life at the whole group rate which is $50 a month. With 6 years left, I currently make 83k a year. I’ve had people look “down” on me for my job and the fact that I do not have a college education. I think I made out ok…

[erikmartin]

He takes 7 minutes to get to what everyone already knows. Having a pension is the best way to go. That’s why all the companies got rid of them.

[GillerHeston]

Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.

[gerardmorris]

Pensions are huge! My military retirement and VA disability totals $7000/month and I am 6 years away from collecting social security. After collecting social security, my total retirement income will be a little over $10, 500/month.

[patriciacarlos]

We experienced the pinnacle of our era, but it is now gone. Like what happened to Rome, the corrupt administration will bring this nation to an end. My condolences go out to anyone who is close to retiring and may be worried about whether their pension will be enough to pay the rising cost of living. Insane fiscal policy, poor regulatory policy, poor energy policy, and poor foreign policy

[AMJDG]

I retired from the USAF at the age of 44 and have received a pension ever since. Yes, pensions make a difference. Mine has allowed me to own a home and maintain the standard of living I had all of the years I served. My father also retired from the USAF and though he died much earlier than he should have, his pension permitted my mother to keep their home and live fairly well for almost 20 years until she passed away.
Not every job provides the opportunity for a 401k or other type of retirement account. I had served for almost 15 years when the military finally began offering a type of retirement account, so I missed out on it - but the future generation have it and are still able to retire at 20 years of service if they wish.

[mattl]

Thx for sharing. I’m fortunate enough to have a pension in the private sector. I’m 22 yrs into a 32 yr pension program at 44 yrs old. Everyday I’m thankful for this. If there are any young people reading this, please try to pay attention to retirement benefits at work. It may not matter to you now, but one day you’ll wake up and realize you’re half way there. Good luck to everyone in retirement

[easterlake]

My USPS pension is only about $1800 a month but my health care follows me in retirement. My biggest asset is the 1.2 million that I've grown in my TSP.

[judynewsom]

I have been retired for five years now. Although I've been adhering to the 4% rule, things are challenging as I did not anticipated. I have another $460K to put into st0cks. How can I profit from the market's resurgence.

[mariahhayes]

Investing in the stock market is the best option to make a passive income. Virtually all the markets are crazy, most people pay more attention to the shiniest position on the graph, I’m keeping a diversified portfolio.

[CliveBirse]

How do people manage in retirement since 401ks are nothing to write home about? Inflation has skyrocketed My 600k turned to 350k in no time. Im 61, won't one work till they die at this pace?

[ClementRusso]

Retirees facing financial challenges often couldn't save enough during their working years. Retirement decisions play a pivotal role. Despite my parents having similar years in civil service, my mom invested with a wealth manager, while my dad relied on his 401(k). As a result, my mom retired with approximately 3.7 million, whereas my dad retired with around 1.4 million

[annabellswint]

My husband retired with 4 pensions at age 63. Financial advisor was shocked. I'm still in the working as an office nurse. Blessed for sure.

[dawannwilliams]

Agreed 34 years ago everyone said l was making a mistake taking a federal government job vs going to college. I wanted to work so went to college in the evenings, worked my way up the ranks and on track to retire in 3-4 years at 56-57 with a pension, a supplemental payment and tsp account. Because no one is paying pension today everyone wants to work for the federal government and you can’t get through the door 🚪 without a minimum 4 years of college. I am grateful l made the decision.

[ootenyafoo]

I've been retired for almost nine years now on a State pension combined with SS for me and my wife - I'm in my mid 60's.  I believe that the key to a successful retirement is first and foremost be debt free at retirement time.  Keep your expectations realistic - there is no "care free" retirement as long as you are still alive, life will always give you new "challenges" to deal with.  It's great not having to deal with the BS of the office anymore as well as stupid things like annual performance reviews with "goals for the next year" crap forced on you.  Keep a rainy day fund of at least three years worth of expenses just in case.- life has an ironic sense of humor.   So far so good!

[TreesOnTheBeach]

As a software developer, I accepted lower pay for a job in 2000, but it had a pension. I was able to retire in 2022 thanks to that pension. Unfortunately, due to the low pay, I wasn't able to save much over that time, but I'm about to pay off my house and still have a meager pension to live on. I'm glad to get out of the rat race, at least a little bit.

[mickydee]

I retired four years ago after almost 33 years with a large law enforcement agency in Southern California. I was 56 when I retired and my pension is currently 145K a year. My retirement will also pass on to my wife at the same level once I pass away. Defined benefit pensions are the best deal out there for workers, but they are rapidly going away for new hires. Pension Pete definitely has things better than Average Joe.

[timesupgr.]

I have both military and FERS pensions. I made every mistake a person could make in preparation for retirement. Because I have defined benefit pensions, I can retire in comfort. No one has their 401k money at the end.

[mikechance]

I paid 7% monthly into my pension over 32 years with a county. It earned 8% annually and upon retirement (I was 53 years old) the county matched my contributions and interest at 225%. My current pension nearly matches my net salary (take home). I have additional investments, a Roth IRA and savings. My point is that not all pensions are the same.