I am currently making $100,000/year. I plan on working for 20 more years, which is when I’ll be eligible to collect my pension. I’ll be 57.
12% of my gross pay goes towards my pension. Right now, my estimated monthly benefit is $6,000/month. That will go up as my pay goes up with years of service.
I put 3% towards a 457 deferred comp. I plan to bump that up once my kids are older.
My job puts $1,000/year into a retirement health savings account, and once I accrue over 300 hours sick time, the excess rolls over into that account as well (I cannot contribute actual money to the account.)
I do not plan on taking social security early. When I do take it at 67, the estimate is $3,000/month.
I am worried about the gap between 57 & 67.
I don’t know what other steps I should be taking to be financially prepared.
I am by myself, no house, but no significant debt. I have $20,000 in student loans that will hopefully be forgiven by the end of the year with PSLF.
Retirement planning – what is missing?
byu/fair-strawberry6709 inpersonalfinance
Posted by fair-strawberry6709
4 Comments
That 10 year gap is definitely the tricky part. You’ll probably want to beef up that 457 contribution way more than just bumping it up later – that’s gonna be your bridge money. Maybe look into a Roth IRA too since you’ll likely be in a lower tax bracket during those gap years
Also consider what your actual expenses will be at 57 vs now, might not need the full $9k/month if you’re debt free with no mortgage by then
so just to be clear….every paycheck your govt employer takes 12% pretax for your pension right.
You also put 3% into your 457b plan pretax as well.
Well thats 15%. I d bump that 457b amount as much as you can handle it.
Having some money in a brokerage account will help those early years.
> I am worried about the gap between 57 & 67.
Why? Do you expect to have expenses that exceed your estimated pension benefit of $6k/month? That seems like a comfortable retirement income to me, assuming you aren’t still paying the expenses of multiple teenage or college-aged children.