From Yahoo Finance: 2025-06-11 11:33:00

The writer is a part of a defined-benefit state retirement plan that guarantees a lifetime monthly payment of $3,600 with a 50% survivorship option for their spouse. They question how this affects their retirement savings calculation, given their current net worth of $500,000 to $600,000, including $180,000 in an investment fund at age 55. Retirement is considered around 60 to 62 years old.

Retirement savings calculations vary based on income sources. Even with savings of $1 million or more, predicting retirement income is complex due to inflation, investment returns, and unexpected expenses. Spending down savings in retirement, known as decumulation, can be daunting. Pensions offer relief by providing steady income, but the need for personal savings remains crucial.

Assessing retirement expenses and income is crucial. For retirees without pensions, monthly expenses must be covered by personal savings and Social Security. In contrast, pension recipients have a portion covered by the pension, reducing the pressure on personal savings. However, non-inflation-adjusted pensions may lose value over time due to rising costs.

While pensions provide security, retirees must still plan for healthcare costs, especially if retiree health insurance is not offered. Long-term financial planning is essential even with a pension, ensuring financial freedom and security for retirement.



Read more at Yahoo Finance: I’m 55 with a state pension in my future. Do I have to save as much as other people?