Most folks know we almost exclusively work with folk over 65 and their families. We have found that folks about to retire are generally concerned with retirement income rather than making huge gains. Which makes sense. When you're retired, it's time for your money to work for you instead of you working for your money. But, of course, you also want to ensure you don't outlive your assets.
Your Pension Options May Have Changed
Some folks are lucky enough to have a pension from work. Even better if it's a cash balance pension. This is a pension where you have several income options as well as a cash-out option. In the past, we would go ahead and do research to see if we could get our clients a larger income than the pension plan, but we were seldom successful in beating the pension's payout. However, that has started to change. Recently, we have been able to roll a cash value pension plan into a newly created IRA (no tax consequences) and get a better income for our clients. So it's always a good idea to check this option.
Most pensions will also offer choices for the retiree to take full benefit for life, a lower benefit that will also include the life of the retiree's spouse as well as a specific period of time to pay out to the spouse (Period Certain). Sometimes a great play is to take the full benefit with nothing for the spouse and buy a life insurance policy with a portion of the difference in the income amount. This way, the surviving spouse gets a tax-free lump sum that may be even better than the continued income. We call this Pension Max. Sometimes a combination of the two concepts works well.
Creating Your Own Pension Alternative
The main thing to remember is that you have choices. You don't have to go it alone. We are always happy to assist, of course, at no charge. If you don't have a pension, we can look at what you have and create a pension of sorts. In other words, our Retirement Income Planning mimics a pension, but with one huge difference. What we build is adjustable. As life throws you curveballs, we can increase and decrease your income according to your needs and wants. You can pull out chunks of money for whatever you want. Of course, we will always let you know how it will affect your financial wellness as you age.
The moral of this article is that there is usually more than one way to approach retirement income. We help folks by exploring all of them and coming up with the most appropriate and beneficial way for your specific needs. We look forward to seeing you soon.
By Marc Frye
Marc Frye provides financial analysis and market commentary for the ARA newsletter, translating complex economic trends into actionable insights for retirees.
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Easy Eddie's Take
Marc's point about pension strategies being more flexible now is spot-on. Let's take a look at this together. In 2026, with interest rates higher than we've seen in years, rolling a lump sum pension distribution into a Traditional IRA or Roth IRA conversion can often generate more monthly income than the original pension payout. The key is running the numbers on your specific situation.
A lot of people ask me, "Should I take my pension as monthly payments or as a lump sum?" Here's the thing: it depends on your age, health, spouse's situation, and what other retirement accounts you have like 401k plans or Social Security benefits. The Pension Max strategy Marc mentions works especially well if you're in good health and can qualify for life insurance. Most people are surprised when they learn this, but a $500,000 life insurance policy might cost less per month than the income reduction from adding spousal benefits to your pension.
Think of it this way: whether you have a traditional defined benefit pension, a cash balance plan, or you're building retirement income from scratch using IRAs and 401k rollovers, the goal is the same. You want predictable monthly income that covers your expenses, plus flexibility for the unexpected. A little preparation today can make a big difference tomorrow.