Planning for Retirement

 

that alone should provide sufficient incentive to request the questionnaire!"

"It's clear that Social Security alone is not enough— strike that, not nearly enough—to fund our retirements. But Tom and I, like millions of others, are also members of pension plans. Between those two sources of income, we should be covered or close to it, right?"

"Perhaps, but not necessarily, Dave," Roy replied. "In-deed, it's unlikely. But it brings up an important point, and that is knowing whether your pension benefits are 'integrated' with your Social Security benefits. Basically, that means your pension benefits and Social Security benefits, together, may not exceed a certain monthly amount. So your actual pension may be quite a bit less than you expected—there have been a few articles recently about retirees who have been surprised by this.

"I have several friends who have worked at the same plant as Tom, and they'll be the first to tell you that, al-though their employer-sponsored retirement plan is better than nothing, it, even combined with Social Security, is not enough to get by on. In fact, the amount they receive monthly is set at a maximum, I believe around eighteen hundred a month, including their Social Security benefits. I don't deny that's an excellent start, but it's tough living on twenty thousand dollars a year when you've been accustomed to much more.

"Dave, your teachers' plan is a good one—better than Tom's, frankly. Like many retirement plans, it's a de-fined-benefit plan, meaning that when you retire, assuming you meet certain criteria, you will receive a monthly check based on a number of variables, the most important being your salary history and the number of years you were on the