Maybe somewhere deep down I'm a pessimist, but most of the time I'm a woman who thinks the glass is half-full. But when it came to financial planning and retirement, I covered all the bases.
I am one of the lucky ones who retired with a state teacher's pension. This is touted as "safe" and provides an annual 2% COLA. Participants in this pension system are not eligible for Social Security, however.
But being ever so wary of what could go wrong, and always wanting to be prepared for left curves life throws at us, I also did the following:
1) Contributed annually to my 403b accounts and also to Roth IRAs when I was eligible. So far, I have not had to touch this money;
2) Invested in the stock market. The "star" of my portfolio is AAPL which I bought at ~$6 a share in 1996. I stopped investing in stocks years ago, but I have fun tracking this asset. I don't know if I will ever sell any of it, but it's there if I need it;
3) I also have a stash of cash... some in CDs, some in ING, and some barely earning any interest elsewhere. It would help me survive for several years if my pension dried up.
4) I have avoided debt like the plague, except for a small mortgage.
So, why I am writing about this? Well, yesterday a good friend...also an educator... called and lamented she may have to work until she's 64 or 65. You see, her teacher's pension just won't be enough for living in retirement if she retires any sooner. And even when she does retire, she'll have to make "drastic cuts" to her lifestyle (like no more travel).
Don't feel too sorry for her. Most Americans have to work until 66 or 67, but many teachers we know like to retire around 60 or 62. My friend, though, never saved for retirement because she figured her pension would be enough. And in reality, it should/could be. And it is "safe." But what if...