Jeff Pabst, CRC
For many of us, retirement planning is something we are attempting to accomplish, but many of us fear whether or not we will have enough funds to make it through retirement. We worry about picking the correct mutual fund, saving the correct amount, or making the right projections of how much we think we will need.
If you have spoken to a financial advisor or read any retirement planning articles, you have likely heard that we will need to replace approximately 80% of our pre-retirement income to be comfortable in retirement. But, how does that translate into how much we need to save now to accomplish that goal? Unfortunately, I don’t have any quick answers. It will take you projecting your pre-retirement income level, estimating of your expenses in retirement, estimating your life expectancy, projecting the total funds needed through that projected life expectancy, and other calculations. All of these calculations require us to make some assumptions about our retirement expectations.
But, as a LAGERS member, you have a retirement plan that steadily accrues a percentage of your income for every year you work. It is constant and predictable.
For example, if you have the 1% multiplier and work 30 years, you will receive 30% of your pre-retirement income from LAGERS in a guaranteed lifetime benefit (1% x 30). That is 30% of your pre-retirement income that you do not have to replace through saving.
As the multiplier increases, so does the percentage replaced. The larger the percentage replaced by LAGERS, the less that needs to be planned for through your retirement savings.
LAGERS’ predictable secure retirement benefit is designed to take away some of the stress and fear about planning your secure retirement. It is designed to help take some of the guesswork out of retirement planning. As I illustrated previously, LAGERS members can easily calculate what to expect from their LAGERS retirement plan. Hopefully, the predictability of the system will bring you peace of mind in knowing that you won’t have to save as much to meet your financial goals. See, you don’t have to be scared of planning retirement when you have the security of a LAGERS benefit.
Jeff Pabst, CRC
Education & Outreach Coordinator
