A pension plan is not a retirement plan

Having a job that offers a defined benefit plan doesn’t free you from the responsibility of planning for your retirement. It seems everyone wants a government job these days. And I bet the defined benefit plan is a big reason why and less about serving the public.

It’s not okay to do a job you don’t like simply because it offers a defined benefit plan. Perhaps it’s just me but 30 years seems oddly long to do something you don’t like because of a pension income.

I get it, though. It’s a tough world out there and there are some many changes occurring that most of us are not even sure where to begin. Real estate prices are going through the roof, wages are staying stagnant, and the stock market seems too risky. Finding a job with a defined pension plan seems like a pretty safe plan in a world that’s increasingly more complex and uncertain.

But at 30 years, does the benefit outweigh the cost? Perhaps. But one thing I think everyone should avoid doing is hanging around a job they hate for 30 years. It’s bad for the individual, other employees, and the organization. Hate is a strong emotion to have about anything and if you have that about your work, you should look to switch for both your health as well as ensure the health of others around you who enjoy the work you hate. At the same time, I’m also not a fan of those who say you should only work at a job you’re ridiculously passionate about. For me, life is about balance and the right job is somewhere in between those two extremes for most of us.

You should do something you like and feel your work contributes to the organization’s success and perhaps, more importantly, someone is willing to pay you a reasonable wage in exchange for your time.

Back to the pension thing. I hear a lot of young people who are hunting for pension jobs. I’m not against it, I just think for some this is more about shifting responsibilities to someone else. For me, I pay no attention to my pension plan my employer is offering. Why? 30 years is a long time and honestly, I can’t tell you where my employer will be in 30 years or even if I will be with the employer in 30 years. Putting your retirement plan on your employer can entrap you and sometimes cause you to not take up new opportunities because your employer offers a pension plan.

If you have a pension plan, great. If you like what you’re doing, even better. But that doesn’t excuse or free you from planning for your retirement. Ensure you’ve set up and enrolled in the pension plan and once you’ve done that review it annual and pay it no other attention. Go about your life and still put money away towards your own pension plan as though you didn’t have a pension plan. Do not factor in your employer’s pension plan and certainly, do not let anyone tell you that you do not need to plan for retirement because you’ve got a defined pension plan.

In fact, if anyone offers you such an advice, please run..very fast! This is your life and you shouldn’t be passing on the responsibility to someone else. You can factor in your employer’s pension plan when you’re 5 years from retirement. I anticipate, you’re likely to stay at a job you hate if it’s only 5 years before you hit a big jackpot.

Focus on finding something you like and not a pension job. Continue to plan for your retirement on your own. By doing that, you will provide yourself far greater flexibility and ensure you are the master of your own future. Put more bluntly, you avoid being that employee that hates their job but feels obligated to share that every day with other co-workers who enjoy what they do.

Don’t strive for that when you’re young or ever. Plan for your financial future because no one else will care about your money as much as you.