Preparing for a Purposeful Retirement

This article was originally published in the Fall 2023 issue of Bridge Magazine.

Did you know? According to Social Security Administration calculations, on average, American men and women retire in their mid-60s. However, many Americans do not realize that at age 60, men may live another 20 years, and women could live another 24 years.*

We are already living longer in retirement, and as science and technology continue to evolve, it’s safe to assume that life expectancy is yet to increase. In fact, according to a recent report, longer life expectancy can have a greater impact than record-high inflation in terms of how long your retirement savings will last.**

At Pension Fund, we want our members to enjoy a strong, smart, and secure retirement and to understand the importance of planning for the future. Whether you are in your early 20s, just starting your career, or nearing retirement, now more than ever, it is important to have a plan in motion to secure a healthy retirement. Let’s review a few actionable items to consider when preparing for a healthy and purposeful retirement.

Participate in Employer-Sponsored Products

First, are you participating in an employer-sponsored product through your job? If your employer offers retirement products, it is important to take advantage of them. Some employers choose to offer an employee match on these products, meaning they provide additional contributions to your accounts up to a certain percentage. If your employer offers a match, you should try to meet the maximum percentage to ensure that you are not leaving any money toward your retirement on the table.

Even if your job does not offer a match, it is still beneficial to participate in employer-sponsored products if they are offered. Products such as 403(b)s have higher contribution limits than individual products such as IRAs, and pre-tax contributions made via payroll deductions are not subject to federal income tax. These facts alone represent more savings for you. Some employers also offer Pension Fund’s Pension Plan, a defined benefit plan, that provides a monthly payment for life upon retirement. This plan gives our members peace of mind - knowing they won’t outlive their money and can continue to see their pension grow, even in retirement.

Maximize Your Individual Accounts

Once you have reached your contribution limits in your employer-sponsored accounts, or if your employer doesn’t offer retirement products yet, consider maximizing your participation in an individual account. At Pension Fund, we offer individual retirement accounts (IRAs) as well as a high-yield savings account called the Benefit Accumulation Account (BAA). Both accounts serve as additional savings vehicles available to our members and their spouses. IRAs are offered on a pre-tax and Roth (after-tax) basis and can be used to set aside retirement income. As a savings account, the BAA offers a competitive interest rate while allowing your savings to remain liquid (meaning you can take out funds anytime). It is a great tool to build an emergency savings fund that can provide a cushion in times of need and help prevent you from needing to tap into your retirement savings.

Assess Your Preparedness for a Purposeful Retirement

As you near the age of 50, it is wise to contact Your Money Line, a free financial wellness tool provided to all Pension Fund members, is here to assist you and run a financial assessment. Your Money Line’s Financial Guides can walk you through key things to know before you retire. For instance, when you reach age 50, the IRS allows you to increase your contributions into retirement plans such as the TDRA 403(b)/Roth 403(b) and IRAs. This is a great time to assess whether you should take advantage of those higher contribution limits. Additionally, using resources like Pension Fund’s retirement estimate tool on the Member Portal to determine your monthly pension benefit or viewing your potential Social Security income via the Social Security Administration are great ways to help you answer one important question: Am I ready to retire? 

Get Ready to Retire 

Once you’ve set a desired retirement date, be sure to contact Pension Fund 60-90 days prior to that date to complete the necessary paperwork and provide all documentation. This is also a great time to review the beneficiaries listed on your accounts and make any changes needed. If you have external retirement accounts, consider a rollover or transfer to a Pension Fund product so you can manage fewer accounts; save money (avoid investment or management fees); and have peace of mind, knowing that Pension Fund assumes the market risk for you. 

Finally, remember to be intentional with your retirement planning, and do not be afraid to ask questions. It’s never too late or too early to start planning for your retirement.