Lisa Mey, Licensed Agent

 A significant percentage of Americans experience an income gap in retirement, meaning their retirement income falls short of their pre-retirement income needs. According to recent studies:

1. Income Replacement Rates: The general recommendation is for retirees to aim for about 70-80% of their pre-retirement income to maintain their standard of living. However, many fall short of this target.
2. Retirement Preparedness Studies:
   • The National Retirement Risk Index (NRRI) indicates that about 40-50% of households are at risk of having insufficient retirement income to cover essential expenses.
   • A Transamerica Center for Retirement Studies survey reported that 48% of workers expect to outlive their savings.

These figures suggest that nearly half of Americans face an income gap during retirement, emphasizing the importance of personalized financial planning.

 In Montana, educators and public employees participate in defined benefit pension plans designed to provide retirement income based on years of service and salary.

Montana Teachers' Retirement System (TRS):

• Average Annual Pension: Approximately $20,044 for retired teachers.
  Montana Teacher's Retirement System
• Income Replacement Rate: For teachers with 30 years of service, TRS aims to replace about 50% of their pre-retirement income.

Montana Public Employees' Retirement System (PERS):

• Average Annual Pension: In 2020, Montana residents received an average annual pension benefit of approximately $20,400 from state and local pension plans.
  Montana Teacher's Retirement System
• Income Replacement Rate: Similar to TRS, PERS provides a pension that may replace around 50% of an employee's pre-retirement income, depending on years of service and salary.

These figures indicate that both teachers and state employees in Montana might experience an income gap in retirement, as their pensions may not fully meet the recommended 70-80% income replacement rate for maintaining their standard of living.

Note: The above figures are based on available data and may vary depending on individual circumstances and the specific terms of each retirement plan.

 At Pension Puzzle Solutions, I specialize in helping educators and state employees understand their pensions and address potential income gaps in retirement. My services include:

• Comprehensive Pension Reviews: Gain clarity on your retirement benefits, including how much income your pension will provide and how it compares to your future needs.
• Personalized Gap Analysis: Identify any shortfall between your expected retirement income and your desired standard of living.
• Tailored Financial Strategies: Develop solutions to bridge the income gap, ensuring your retirement years are secure and stress-free.

Your pension is an essential piece of your financial puzzle. Let’s work together to ensure you have the complete picture for a fulfilling retirement.

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