Ten years from now, I will be eligible to receive a pension from my current employer. Given that I am risk-averse, value security, and don’t currently have another plan to bring in cash, I figure that working towards a pension is the way to go.

That means I’m done with my retirement planning then, right? Um, not so much.

First, I know that many people need money over the amount of their pensions to live how they want to in retirement.

Secondly, though, pensions aren’t always as secure as you want them to be.

Hence, the need for contingency plans. I realized this in a big way after learning more about what my pension depends on…

First, the  state in which I live could change the pension plan. A few years ago, our  governor tried to change the retirement plan in a way that was not favorable to state employees. Thank goodness the state ruled it unconstitutional (the state employee retirement plan is protected in the state constitution). Within 10 years, though, some sort of change–favorable or unfavorable–could still happen.

Second, I won’t find out what % of my salary I’ll receive in retirement for 6 more years. Yup, it’s a rule that I can’t have my retirement meeting –I can’t meet with a professional at my retirement company–until I am 4 years away from possible retirement.I have been given an actual date of when I can schedule my meeting:  12/01/2024

When I do attend that meeting, they will do some calculations and figure out which of a few options will be most beneficial to me.

Until then I can use a nifty calculator that says I will receive 69% of my salary for retirement. There’s a huge disclaimer on the calculator, though, so 69% is not guaranteed.I could receive anywhere from 40-80% of my ending salary. This is a huge range!

So there are some pretty big “what ifs” just within the pension plan without even considering my health, my family’s health and circumstances, what pay increases I may or may not get over the years, etc.

Now that I see these risks, I am motivated to start working harder on those plans. Here’s what I have so far:

Plan A: My current plan is to work for my employer for 10 more years (9 if I can save enough “sick time” to put towards my years of service), at which time I will have 30 years into the retirement system and thus will have the opportunity to retire. I should have the house paid off by then and would pull a pension to contribute to my family’s finances.

Plan B: If at my retirement counseling appointment in 6 years, I find out that I need to work longer for a significant increase in my pension, I may do that. It depends on  how my career is going at that time, what my financial situation is like and what Mr. POAI is doing at the time. (Our kids should be out of college then, so we won’t be tied down location-wise).

Plans C, D and E are not full-fledged plans, but options I can add to plan A or B.

Plan C: Work with my financial planner to figure out what I need to contribute to my 403B, and other retirement plans so that I am the most secure possible–even if I do lose or let go of my current job. I’ll need to figure out what funds to allot where.

Plan D:  Beef up my side hustle. As it is now, I would have to hustle like crazy to make any significant amount of cash in my current side hustle. I would have to imagine a new model for making money and/or create more side hustles.

Plan E: Keep up my skills and keep exploring what I want to do with my life. I am learning a lot through blogging–I’m learning more about writing, about technology, and about becoming engaged in online communities. If I continue working on this blog or another, I will learn more, which may be useful to an employer. By exploring, I mean learning more about myself and what I want to do. If I get a feel for what my purpose is, or how I want to contribute to the world, that will likely lead me in the right direction.

Some other options I don’t want to spend a lot of time thinking about now are: 1. getting a different job and 2. depending on Mr. POAI to fully support us. I currently have no inclination that I’d like to do something other than what I am doing now especially if it means working for someone else. I would likely consider freelancing or creating my own business before seeking another job if given the opportunity. In terms of relying on Mr. POAI, I have not depended on someone else to support my in my whole adult life; I can’t imagine that would be very comfortable for me. In short as long as I have skills, opportunity, and drive, it’s likely I will work.

What about you? Do you have contingency plans? If so, how seriously do you think of them? Do you have them written down or are they in your  head?  Is it useful or a waste of time to have contingency plans?

Let’s talk in the comments below.  


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