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Roth 403b vs Traditional with a Pension

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  • Roth 403b vs Traditional with a Pension

    Hello everyone - first time poster and newbie, so forgive me if this has been discussed before. I am an ED doc working for a large health care provider who still offers a pension. This could be fairly sizable if I stay with the company ~Gross 10k/month. I plan on retiring around age 60 - about 22 years from now. I would defer payments from the pension until age 65, as waiting yields the maximum pay out.

    I know typically a tax deferred retirement plan is recommended at my current earning bracket - as my tax rate will be alot lower in retirement. However, does the presence of this potential pension give anyone pause to change the strategy and start leaning more towards a Roth 403B - which is offered by my employer as well?

    I guess the key word is "potential" for me - because this pension is anything but guaranteed. Hard to plan if I would still be with the company in 20 years or if this perk will even be a reality in 20 years for the company. But I was curious if the presence of the pension would change anything for the more financially minded of the group.

    Thanks so much for your thoughts.

  • #2
    Personally, I think you should look at the pension as just gravy. You are correct in assuming that it may not be around when you retire and that YOU may not be around when you retire (that is, at your current job). Planning, at least in our office, typically assumes that, in the absence of other compelling info, the present situation that you are experiencing will continue, but I would hedge my bets with a pension, especially when you are 22 years out.

    So, imho, assume there is no pension and make your decision likewise. Again, this is an exception to the "general" rule and if it does work out for you, consider that you will have the option to retire even earlier, have a 2nd career if so desired, provide a premium to your surviving spouse if you unexpectedly kick the bucket, etc.
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