As of exactly one week ago, I’m vested in my pension.
From what I understand, this means that, if I were to quit my job today, I could draw $2,284 per month, every month, for the rest of my life, once I reach retirement age – for me, this is age 52. Actually, at this point, my monthly allowance will be more than that amount. I’m relying on last year’s benefits statement because this year’s hasn’t arrived yet. Also, my pension provides for an annual 3% cost of living “raise,” so my monthly allowance should basically keep pace with inflation.
The great thing about being vested is that this is money that I can rely on for the rest of my life. I don’t have to worry about it running out the way I would if it were my own savings. Obviously, every year that I put in with my current employer increases my monthly allowance substantially, but even that small amount that I’ve earned so far gives me a sense of security.
Don’t worry, I don’t plan on relying solely on my pension for funding my retirement. I know that pension funds can go bust and that inflation might rise substantially above 3% and significantly eat into my monthly benefits. But teaching is a grossly underpaid profession, and I often grumble about how much more money I could be making if I’d gone into another field. Sometimes I forget about some of the financial advantages it does provide, so I like to take a moment to be thankful for those benefits.
Do you have a pension? How does it factor into the financial plans you’re making for retirement?