Retirement & Pension: A Guide to Planning with Guaranteed Income

How A Pension Shapes Your Retirement Plan:
00:00 Pensions & Retirement Planning
01:01 Guaranteed Income Stream
02:05 Reduced Savings & Greater Flexibility
03:49 Protections
05:19 Longevity Risk Mitigation
05:49 Calculating A Pensions Value
07:06 Incorporating Pension Into Net Worth
07:34 Employer Stability

Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.

Thanks for watching, I appreciate you!

[mikegb]

I retired from the U.S. Army in 2016, after 20 years of service. During that 20 years, I saved and invested like crazy, sometimes putting close to half of my pay into index funds. In the 8 years since I retired, I still haven't made any withdrawals from my investments, and my net worth is increasing at a rate much faster than when I was working! (I also have the benefit of living (as a full-time caregiver) with my dad in his house, which I will inherit.) I'm 55 years old with a net worth of about $2M, almost all in index funds. My pension lets me be aggressive with my investments. Even if the market crashes, my pension lets me stay cool and wait for the recovery.

[markdavis]

I retired 3 yrs ago at 58 with a $2500 month pension.
Started collecting $16k per year survivor social security at 60.
I will collect my SS at 70, est $3k per month.
Modest 401k, house is paid for cars are paid for.
The key to a successful retirement?
Be debt free.

[khadijasajid]

I've been diligently saving and contributing to my 401k, aiming for early retirement and financial freedom. However, since the COVID outbreak, my portfolio has underperformed. Should I keep contributing or explore alternative sectors to achieve my goals?

[DLTJR]

We retired 12/31/22 with a state pension. With no debt, we have a stress free retirement. It is a blessing that we do not take for granted.

[Erginartesia]

Yes .. retired with government pension. It is working just like the “3 legged stool” system, as it was intended to do. I absolutely agree that it reduces stress. I use the 401k fund for non-regular expenses, and to fund my own long-term care.

I STRONGLY recommend that having a pension, you should still put 10% to 15% into your 401k. Having that funds bucket is equally as important to having confidence in retirement.

[ScottUnderwood-qq]

Thanks for the video!! My wife and I worked very hard for many years (military, GS, and teacher) and will have 3 pensions and 100% VA disability. With my social security at 62 we will earn between 13-14K per month. My wife will wait to 67 to draw her SS and we will not touch our 401k and TSP until we hit the age requirement. Government service doesn’t pay great in the early years, but makes for a great retirement.

[-HourTravels]

I’m a 28 year UAW worker with a pension. I also take advantage of the 401K with other investments as well. I’ve been patiently waiting for this video. Thank you, Great job.

[kevo]

these are some great points, I’m still about 10 years away from early retirement but I have a solid 401k and will be getting about $105k per year from a defined pension plan. It’s definitely been super helpful to have both and not as much pressure to save. Planning to move somewhere with lower cost of living and live a good life.

[mikebridges]

Erin, I retired in 2013 early at 55 with a traditional, non-adjusting pension. Full retirement was at age 60, so I took about a 40% cut in monthly benefit, but that early retirement date allowed us to return home while our parents were still alive. Early in our careers my wife and I decided that we were going to assume pensions weren't going to be around, nor social security (this is in the early 80s, so that mind set is nothing new). Investing in our company's 401k over 30 years, plus pension and SS, we're in good shape.

[Moneymalzy]

I have a pension. I put 7 percent and they put 7 percent. Every year I get 1.75 percent towards retirement. Meaning if I made a 100k a year. And I worked for 20 years. That's 35 thousand. But i have a 457b. And I max it out. And an HSA plan. I max that out. But the company puts 246 in a month. So that's free money invested. So I invest 31k a year. Just started a year and half ago. But I love these videos. I also changed from a target fund to vanguard stock. I wanted low fees. The great part is I invested my HSA. Only 3 people at work out of 100 have an HSA. It's only 6 grand after a year. But it will add up. I'll play the slow game

[JamesCaballero-qr]

Some pension plans, like mine, offer the option to take a lump sum. I opted to take the lump sum, rolled over into an IRA, which I invested in S&P 500 and high dividend stock ETFs. This has worked out well for me when applying a 4% rule.

[archoplites]

Thanks for addressing how a pension fits in with how we (folks with pensions) now save/plan for retirement. And yes, I'm one in the minority now with a pension as my primary source of retirement income. Although I know what my state defined benefit pension will provide me once I retire, It's been difficult figuring out how much my pension is "worth" and how to use this in such calculations such as my net worth. Another valuable equation to use to figure out what a pension is worth is described in a 2018 paper by Blanchett and Finke - your pension viewers should find this helpful too.

[ghggp]

I am 70, retired after 30 years at a major automotive company. I then worked at a small marketing agency where they offered a buyout. My home is paid off as well as my used car. No credit card debit! I can live comfortably with my pension and social security benefits. I feel very blessed to be able to pay for any repairs on my home. Having an IRA gives additional peace of mind.
Thank you for making this video! Exceptionally well done and informative.

[someoneelse]

I have a pension, 401k, 457b, SEP IRA, Roth as well as 529’s for my kids educations. This year my net worth in increase by $425k, while over the last 5 years it has increased (on average) by $291k each year. I’ve been collecting my pension for 12 years. By the time I can start taking social security, my net worth will be a bit over $5 million. I still don’t feel rich, but comfortable. I am ramping up my travel now as it’s something I really enjoy. I’ve been to 22 countries and have lived in 5 so far. My secret is retirement investing, early and often. Also, no consumer debt beyond a mortgage (now paid off). I started investing in stocks at 24 years old and I hold them. I’ve had Google, Amazon, Apple etc for 27+ years.

[HopkinsCoinLaundrySupercenterI]

My pension was frozen after 39 yrs of service. Have pension, 401k, a small business, plus a few other investments. I'm getting close to the finish line. I'll be 62 in a few months. Nice to see light @ the end of the tunnel & it's not a freight train.

[kennedyrice]

Very informative video. For me, I retired from the military back in 2001 and then started working for the county government which will be my 2nd pension when I plan to retire from it next year. Those plus SSI and other investments and I should be good. Not married and no debt except for my home. I'm thankful.

[BlueLineGroovy]

I’m approaching this pension subject with a lot of apprehension. I’ve earned a defined pension but haven’t started it yet. .. trying to get as much knowledge as I can. Thank you for this video. You have made it a little clearer for me.

[cashflow]

Excellent video. I fully retired at 55 with a 2K monthly pension & wife's SS at 63. No debt but using my dividends to supplement my retirement. I have another year before I apply for my max SS at 70. Thank you for the informative video and congratulations on your upcoming 70k. You've come a long way.

[paulseidel]

I didn't fully appreciate my pensions until I started receiving this year. Military reserve pension plus tricare has huge value, and the pension from a government job, I have more assets than I need need, so I am figuring out how to take fancy vacations, do estate planning, and help others.

[Scott]

First off, I am a subscriber and enjoy Erin's material a great deal and I believe her correct, largely, about most pensions getting COLAs, but this is because they are either government (who often don't get Social Security) or longer established private pensions where it's been fought for. I, too, assumed, pensions naturally got COLAs, typically.

Another YouTuber I watch, and respect, however said that while government pensions do, MOST modern, private, pensions do not get COLAs. They're fixed.

I will say that a financial planner my wife and I visited assumed my wife's private pension got COLAs in her analysis. After watching this guy's video however, I had my wife ask her HR and I found out she didn't.

Again, government pensions generally do, but if you have not heard your HR person say so or otherwise have it in writing, don't assume. ASK if your pension gets a COLA. The last thing you want is to base your retirement on a pretty big assumption like that.