When evaluating their individual retirement plan in the Retirement Security Report, public workers should look to see whether their plan is expected to work for them in general. Then it is worth thinking about what this might mean for the unique financial aspects of their own household.
What are the overall scores of your public retirement plan?
Workers should focus on the duration of employment category that fits them the best in their own minds — e.g. Short-Term, Medium-Term, or Full Career Worker.
Equable has provided its own assessment of whether or not the plan is working well for workers in those categories based on the scores each plan has earned, but any one individual may have different thresholds for what is good or bad. So it is worth also looking at the overall score and the scores for subcategories to consider what might be most relevant for each person.
For example, is a public worker relatively new on the job? Do they plan to work more than 10 years? Are they currently between 10 and 20 years, thinking about whether or not to stay? All of these questions can lead to different points of view on the data being provided.
For individuals who are thinking about taking a job in the public sector, like teaching or public safety, they should think about what kind of career they expect to have and look at the Retirement Benefit Scores for each plan available to them in each service duration. Those aiming for a full career might want a different option than those who think they’ll work under 20 years.
What should public workers do after they have this information?
Public workers can use the benefit calculator on the RSR website for a general sense of the value of their own retirement benefit.
Individuals using this tool should also factor in any unique household finance situations—do they have high healthcare costs? Do they have children who can take care of them in old age, or will they fend for themselves? Will mortgage payments be a factor after retirement? A lot of factors can change how well a retirement plan meets personal situations.
Public workers should also check to see if there is a benefit calculator offered by the retirement system managing their benefit. There are often quality tools available to get very specific benefit estimate data, even if they require making a phone call or submitting a form.
Another thing public workers should do is consider how much longer they are going to spend in their job, and look at whether their retirement benefits will work for them at that time — or if benefits might start working for them at that time if they are not already.
For example, someone in a plan that’s not working for them after five years may see that, after another five years, their benefit will improve relative to a retirement income adequacy standard—and if not, they should financially plan for that.
Alternatively, someone with 15 years of experience debating whether or not to stay in their profession might find that their plan won’t work well for them if they leave, but if they stay another 10 to 15 years it will benefit them to stay.
Contact us with questions
Public workers can contact us to ask questions and get clarification on any issues. They can, and should, also contact their state legislators to share any concerns about the need for better benefits.