Retirement Planning With a Defined Benefit Pension: EDU #2610

The Retirement and IRA Show

Jim Saulnier, CFP® & Chris Stein, CFP®

Business, Investing

4.3 • 729 Ratings

🗓️ 11 March 2026

⏱️ 54 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Chris’s Summary
With Jim at the T3 conference in New Orleans, I am joined by Jake Turner to cover how to factor a defined benefit pension into retirement planning, using the situation of a 45-year-old law enforcement officer with a non-covered pension as the backdrop. We walk through evaluating his savings rate against the 15–20% rule of thumb, the lump sum equivalent value of his pension income, why the presence or absence of a COLA matters significantly, and how pension income fits into covering essential expenses over a long retirement.

Jim’s “Pithy” Summary
While I’m at the T3 conference in New Orleans, Chris and Jake use a listener’s situation to dig into retirement planning with a defined benefit pension. The listener is a 45-year-old law enforcement officer who has been contributing to his pension since day one but only started building outside accounts five years ago. He wants to know where he actually stands — and the answer is more nuanced than a simple savings rate comparison can capture.

A big part of that nuance is whether the pension is a non-covered one, meaning it replaces Social Security rather than sitting alongside it. That single distinction changes how you benchmark the savings rate entirely, and it’s the kind of thing that gets glossed over when people just throw out rules of thumb without knowing what’s underneath them. Chris and Jake also get into how pension income fits against the Minimum Dignity Floor — and why a pension that looks rock solid at retirement can tell a very different story decades later if there’s no cost-of-living adjustment attached to it.

There’s also a conversation worth hearing about lump sum options — what they’re actually worth, how to think about comparing them to the lifetime income stream, and why the big number isn’t always the better answer. If you have a defined benefit pension and you’ve been wondering how it fits into the bigger retirement picture, or whether you’re ahead or behind where you should be, this episode covers the framework for thinking it through.

The post Retirement Planning With a Defined Benefit Pension: EDU #2610 appeared first on The Retirement and IRA Show.

Transcript

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0:00.0	The retirement and IRA show represents the words and views of the show hosts exclusively and should not be construed as investment legal or tax advice. All information is believed to be from reliable sources. However, we make no representation as to its completeness or accuracy. All economic and performance information is historical in nature and is not indicative of any future results. Any indices mentioned on the show are unmanaged and cannot be invested indirectly. Diversification and asset allocation strategies do not assure profit or protect against loss.
0:23.8	Never make any investment or financial decisions based on information offered on this show
0:26.9	without first consulting your financial legal or tax advisor.
0:29.7	Financial planning services offered through Jim Solnior and Associates LLC, a registered investment advisor.
0:47.2	This is the retirement and IRA show coming to you from beautiful Northern Colorado.
0:52.8	Join us as certified financial planner Jim Sonier, as well as Colorado State University Finance Instructor and Certified Financial
0:55.1	Planner Chris Stein teach you about IRAs, borrow-en-case, annuities, Social Security,
1:01.2	pension plans, and estate planning in a fun and enjoyable show. Whether you are listening live
1:06.7	in Colorado or streaming from their website or iTunes podcast, Jim and Chris want you to know that they're
1:12.6	available to help you plan for your retirement. Just visit their website at JimHelps.com. That's Jim H-E-L-P-S.com,
1:21.9	and click the Meet the Team button on the homepage. Now here's Jim and Chris with today's show.
1:31.0	Well, hello, hello everybody and welcome to the Retirement and IRA show, EDU edition. So on today's show, if you've been
1:37.8	listening to the shows immediately prior to this, Jim will not be joining us. My name is Chris.
1:47.9	I'm going to have Jake from the office assist me today.
1:54.4	And so we're kind of doing a one-off, a spinoff topic, if you will.
2:05.3	On today's EDU show, we're going to talk about how does one factor in to their retirement planning considerations,
2:14.0	a defined benefit pension. And as you'll see, we'll talk a bit about kind of in the preparing for retirement stage, sometimes called the accumulation phase where you're
2:19.9	shoveling money away, how would you view the defined benefit pension as part of that journey,
2:25.9	the contributions you and your employer might be making to that. And then also how does a defined
2:31.9	benefit plan fit into the overall retirement?
2:37.9	Cash flow coverage, if you will.
2:40.7	So we'll kind of attack it from both directions there.
	...

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