Retirement insights from a Colorado PERA perspective

A distant view shows a mountainous landscape with sloping peaks, green trees in the foreground, and a cloudy sky above.

October is National Retirement Security Month, providing a great opportunity as the year winds down to take a look at one’s finances, goals, and plans for retirement.



With recent research showing that many of us <a href="https://www.usatoday.com/story/money/2023/10/12/how-long-does-retirement-last/71074947007/" target="_blank" rel="noreferrer noopener">greatly underestimate how long we’ll live</a>, it’s important to plan ahead and make sure you’re on track to reach your retirement goals.



If you’re a member of the PERA Defined Benefit Plan, you’re already set for lifetime income in retirement. But if you’d like to do more to ensure your retirement security, there are steps you can take.



PERA has been sharing tips throughout October on <a href="https://www.facebook.com/ColoradoPERA" target="_blank" rel="noreferrer noopener" class="broken_link">Facebook</a> and <a href="https://twitter.com/ColoradoPERA" target="_blank" rel="noreferrer noopener">Twitter</a>, and we’re wrapping up National Retirement Security Month with some more helpful information here.



Consider some of the items below if you’re taking stock of your financial health this month:



<ul>
<li>Save additional money in a PERAPlus plan: PERA offers a voluntary <a href="https://www.copera.org/peraplus-401-k-457-plans" target="_blank" rel="noreferrer noopener">PERAPlus 401(k) Plan</a> to all members, and some PERA employers also offer the <a href="https://www.copera.org/peraplus-401-k-457-plans" target="_blank" rel="noreferrer noopener">PERAPlus 457 Plan</a>. Both plans allow you set aside additional pre-tax dollars (there’s also a Roth option) on top of what you contribute to your PERA Defined Benefit Plan or PERA Defined Contribution Plan account.</li>



<li>Make a savings plan: A recent survey found that a surprising number of Americans <a href="https://content.copera.org/national-retirement-security-month-highlights-importance-of-planning-for-future/" target="_blank" rel="noreferrer noopener">have no savings account at all</a>. Saving money is easier said than done, but making a plan to save even a little bit at a time can make a huge difference (not to mention you can take advantage of historically high rates on savings accounts right now).</li>



<li>Take full advantage of your HSA, if you have one: If you have a high-deductible health plan with a health savings account (HSA), you might not be aware of its retirement-planning benefits. In addition to setting aside pre-tax dollars for health care expenses (one of the biggest expenses in retirement), your HSA balance is available to spend on other needs once you reach age 65. Your HSA is also exempt from required minimum distributions (RMDs).</li>



<li>Don’t forget estate planning: Estate planning isn’t just for the wealthy, and it’s not just for deciding who inherits your assets. Good estate planning can also make sure your loved ones <a href="https://www.kiplinger.com/retirement/overlooked-benefits-of-estate-planning" target="_blank" rel="noreferrer noopener">know what to do if you’re no longer able to care for yourself</a>.</li>



<li>Download the new PERA mobile app: The <a href="https://www.copera.org/pera-mobile-app" target="_blank" rel="noreferrer noopener">PERA app</a> allows members to access important information like account balance, projected monthly benefit, and service credit history, as well as fill out forms (and even apply for retirement) from their mobile phone.</li>
</ul>



Regardless of where our members are in their public service career, we have a lot of helpful resources on PERA benefits available online, including:



<ul>
<li><a href="https://www.copera.org/pera-frequently-asked-questions" target="_blank" rel="noreferrer noopener">Frequently asked questions (FAQs)</a></li>



<li><a href="https://www.copera.org/quick-tip-videos" target="_blank" rel="noreferrer noopener">Quick Tip videos</a></li>



<li><a href="https://www.copera.org/webinars" target="_blank" rel="noreferrer noopener">On-demand and live webinars</a></li>



<li><a href="https://www.copera.org/financial-wellness-library" target="_blank" rel="noreferrer noopener">Financial wellness articles</a></li>
</ul>

National Retirement Security Month Highlights Importance of Planning for Future

This is the second in a series of articles for National Retirement Security Month exploring how Colorado PERA provides retirement security to public employees.



<h4 class="wp-block-heading">Stability amid uncertainty</h4>



At a time when many people have struggled to save for retirement on their own, PERA has continued to pay retirement benefits that support retirees and Colorado’s economy.



When the COVID-19 pandemic began in early 2020, businesses shut their doors, stock markets dropped, and many people found themselves facing the loss of income and savings. That economic disruption was especially painful for older Americans who rely on their savings for income in retirement: <a href="https://www.commonwealthfund.org/publications/surveys/2021/sep/impact-covid-19-older-adults" class="broken_link">A recent survey by The Commonwealth Fund</a> found that in the United States, 19 percent of adults 65 and older used up all or most of their savings or lost a source of income during the pandemic. That’s a higher percentage than other high-income countries included in the survey.



For public sector employees who participate in a defined benefit pension plan like what PERA offers, benefit payments have offered some financial stability during otherwise uncertain times.



<h4 class="wp-block-heading">The value of reliable income</h4>



Retirees who rely on retirement plans like 401(k)s or their personal savings have to carefully track their withdrawals during retirement to make sure they don’t overspend and deplete their accounts. But in a defined benefit retirement plan, retirees receive a monthly payment that isn’t determined by their account balance, and a retiree cannot outlive their benefit.



While the COVID-19 pandemic and its effects have been felt far and wide, PERA continued to pay monthly benefits to the thousands of retirees in Colorado who rely on them.



In 2020, PERA paid more than $4.2 billion in pension benefits to more than 107,000 retirees living in Colorado, with an average monthly benefit of $3,204. Those benefit payments translate to billions of dollars in spending, supporting local businesses and jobs. In 2019, <a href="https://content.copera.org/pera-benefits-provide-economic-stability-during-uncertain-times/">a report by Boulder-based Pacey Economics</a> calculated that retiree spending in Colorado supported more than 32,000 jobs.



The stabilizing effect of PERA benefits is especially important in Colorado’s rural areas, where retiree income makes up a greater share of area payroll. In 26 Colorado counties (nearly all rural), these distributions represent at least 10 percent of the county’s total payroll.



In addition, PERA had more than $808 million invested in Colorado-based companies, partnerships, and assets as of the end of 2020. Those investments include equity of companies headquartered in Colorado and real estate investments. PERA also employs investment managers with operations and employees in the state.



Together, PERA benefits and investments strengthen Colorado’s economy and help provide stability during periods of uncertainty. And although changes to PERA — including increased contributions and a decreased Annual Increase — have been difficult for everyone, they have resulted in a more resilient plan that is able to continue to pay monthly lifetime benefits while meeting its funding goal.

PERA Benefits Provide Economic Stability During Uncertain Times

This is the first in a series of articles for National Retirement Security Month exploring how Colorado PERA provides retirement security to public employees. 



October is National Retirement Security Month, and the events of the past year and a half have made clear the importance of planning for the future.



<h4 class="wp-block-heading">The value of a defined benefit pension</h4>



Retirement security is a major concern to many Americans right now. A recent survey by the National Institute on Retirement Security found Millennials and members of Generation X <a href="https://peraontheissues.com/survey-millennials-gen-x-especially-pessimistic-about-retirement-prospects/" target="_blank" rel="noreferrer noopener">are especially worried about saving for retirement</a> and are more likely to be concerned about how the COVID-19 pandemic might have affected their retirement plans.



According to the survey, members of all age groups agree that the average worker cannot save enough money for retirement on their own and it’s important to provide for retirees. To that end, the generations agree on the importance of defined benefit retirement plans — also known as pensions — like what Colorado PERA offers. With a pension, retirees receive a lifetime benefit they can’t outlive.



Earlier this year, we surveyed retired PERA On The Issues readers and asked them what the security of a PERA benefit means to them. Continue reading for their perspectives and their advice for preparing for the future.



<h4 class="wp-block-heading">What does your PERA benefit mean to you?</h4>



For many retirees, the value of a defined benefit is the reliable income.



Allen W., a PERA retiree now living in Wisconsin, said: “[PERA] provides regular monthly income along with Social Security, and my personal investments,” he said. “Without PERA I would have to reduce my standard of living.”



For Mike M., a retired educator from Westminster, quality of life is key: “A PERA retirement plan has allowed me to do the things I never had the time to do while working,” he said. “Travel and recreation and enjoying time with friends and family have been a big part of my life during retirement. A secure retirement plan provides me with the financial resources to do the things I always wanted to do.”



Walter R. of Colorado Springs said he appreciates the peace of mind that comes from knowing his loved ones will be taken care of: “The retirement plan truly helps us,” he said. “In addition, I elected Option 3 which will ensure my spouse continues to receive our retirement pension when I pass.”



<h4 class="wp-block-heading">What advice would you give to others?</h4>



PERA retirees said they’ve learned some important lessons on their journey toward retirement. Mark J., a retiree from Colorado Springs, said his advice for younger workers is to learn as much as they can about their benefits.



“Learn all of the PERA plan details and attend all PERA briefings long before you plan to retire,” he said.



Rob W. of Salida said he learned the importance of saving additional money for retirement: “Enroll in the PERA Defined Benefit plan and start saving in a 401(k) or 457 plan the first month of your employment,” he said.



For others, the advice is simple: Stay the course.



“If you are a working PERA member, stay in PERA if you are in a job you enjoy doing,” Mike M. said. “A retirement plan such as PERA can provide you with retirement security at a time when you need it in later years.”



We’d love to hear from you — if you’d like to share your story about what your PERA benefit means to you, <a href="mailto:POTImail@copera.org" target="_blank" rel="noreferrer noopener">click here</a>.

What ‘Retirement Security’ Means to PERA Members

October is National Retirement Security Month. The aim: to increase understanding and emphasize the importance of planning for retirement, particularly for public employees. 



Learn about the history behind this campaign, details and resources available this year, and more below.



<ul><li>The National Association of Government Defined Contribution Administrators (NAGDCA) has been raising awareness of retirement preparedness since 2006. Originally conceived of as National Retirement Security Week, the campaign grew this year and now spans the entire month of October.</li><li>The United States Senate unanimously approved a <a href="https://www.nagdca.org/wp-content/uploads/2020/10/SRes743-NRSM-2020.pdf" target="_blank" rel="noreferrer noopener">resolution</a> acknowledging National Retirement Security Month. The resolution comes “with the goal of increasing the retirement savings and personal financial literacy of all people in the United States and enhancing the retirement security of the people of the United States.”</li><li>Anyone can register for <a href="https://icmarc.secure.force.com/events?SiteId=a0l3a00000Hw8XhAAJ" target="_blank" rel="noreferrer noopener">webinars</a> covering a variety of retirement-planning topics. ICMA-RC, an organization founded in 1972 to help public sector employees build retirement security, is hosting.</li><li>In addition to webinars, ICMA-RC created some of the most visually interesting <a href="https://www.icmarc.org/retirementmonth/for-participants/interactive-calculators.html" target="_blank" rel="noreferrer noopener">retirement calculators</a> you’re likely to come across.</li></ul>



Retirement planning is a year-round activity at PERA, as these stats from 2019 show.



<ul><li>The number of times PERA members logged into their <a href="https://www.copera.org/how-to-balance-saving-for-retirement-with-other-savings-goals" target="_blank" rel="noreferrer noopener">PERA account </a>topped 1.6 million.</li><li>Members were busy projecting future income as they planned their retirement budget. They ran more than 323,000 calculations using the monthly retirement benefit calculator on copera.org.</li><li>More than 29,000 attended a <a href="https://www.copera.org/members/webinars" target="_blank" rel="noreferrer noopener">presentation</a> led by PERA’s Field Education team.</li><li>PERA’s benefit counsellors held 4,560 <a href="https://content.copera.org/are-public-sector-workers-satisfied/" target="_blank" rel="noreferrer noopener">individual appointments</a> with members, most of whom are nearing retirement.</li></ul>

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National Retirement Security Month Highlights Importance of Planning for Future

PERA Benefits Provide Economic Stability During Uncertain Times

What ‘Retirement Security’ Means to PERA Members

Retirement Planning in the Spotlight this October

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