As a school employee, you enjoy the benefit of a guaranteed lifetime income through your pension plan that many people don’t have access to. Did you know that most pension plans do not provide enough coverage alone for most retirees? Only 21% of workers are very confident about having enough money for a comfortable retirement.
The good news is you have access to other ways to supplement your pension check to plan for a comfortable retirement.
- Understanding Social Security options
The Social Security Administration (SSA) uses your earnings and work history to determine your eligibility for retirement benefits. You can check your online Social Security Statement to see estimates of your future benefits and the SSA also has calculators you can use for testing scenarios and retirement ages. Unfortunately, your pension plan and social security combined may not be enough to meet your expected retirement goals. According to the SSA, Social Security replaces only about 40 percent of preretirement income for the average worker. But, there are still more ways for you to take control and add on to your nest egg.
- Take advantage of a 403(b) plan
You likely have access to a 403(b) savings plan to allow you to save money on a tax-advantaged basis for retirement. These are voluntary plans that you can easily contribute to with each paycheck with pre-tax money. This means you can take more control over meeting your goals and retirement date by choosing to add to a 403(b) plan. There are many investment options available within these plans so you can decide if you want to use mutual funds, annuities, or a combination of both.
- Planning, Planning, Planning
Rather than leaving your retirement to chance, take time to meet with a financial professional to discuss the best path to reaching your goals. An advisor can give you a clearer overview of how your pension, Social Security and other savings can work together for you. Once you have a realistic view of how much savings you will need to achieve your ideal retirement, you can work on a plan of action. Utilizing an advisor can help you stay on track with regular contributions, keep focused on your long-term goals, and make adjustments due to unexpected life events.
Contact your advisor today to discuss your unique goals and learn more about your retirement plan options.