Is Your PERSI Pension Enough? How to Fill the Retirement Income Gap

February 26, 2026

Key Takeaways


  • PERSI provides guaranteed lifetime income, with most retirees recovering their entire contribution within 3.5 years of retirement.


  • PERSI by itself usually isn't enough. The most secure retirement comes from combining your pension with Social Security, IRAs, and your own savings.


  • Your distribution option choice is permanent and irrevocable — choosing the right survivor benefit can protect your spouse or maximize your monthly payment.


If you’re a teacher, first responder, or public employee in Idaho, you’ve heard about PERSI, the Public Employee Retirement System of Idaho. You contribute to it with every paycheck, often before you even notice the money is gone.


But do you actually understand how it works and what it means for your retirement?


You're not alone if the answer is "not really." Most public employees know they have PERSI, but they're fuzzy on the details. How much will you actually get? When can you retire? What's this "Rule of 90" everyone mentions? And most importantly, how does your PERSI pension fit together with your 401(k), IRA, and Social Security?


Let's break it down so you can make informed decisions about your retirement future.


What is PERSI?


PERSI is Idaho's defined benefit pension plan for public employees. If you work 20 hours or more per week for a qualifying public employer — school districts, fire departments, state agencies, and more — you're automatically enrolled in the PERSI Base Plan.


What makes it different from your 401(k) or IRA is that it is a defined benefit plan (pension), not just a retirement savings account. This difference is important.


With a 401(k) or IRA, you contribute money, it grows (or doesn't, depending on the market), and eventually you withdraw it. You bear all the investment risk, and you're responsible for making your money last through retirement.


With PERSI, you're earning a guaranteed monthly payment for life once you retire. The state invests your contributions and your employer's contributions, manages the investment risk, and promises you a specific benefit based on a formula tied to your salary and years of service.


You can think of it as a mix between the old pension plans your grandparents may have had and today’s 401(k) system. You contribute, unlike traditional pensions, where only the employer paid in, but you also get guaranteed lifetime income, unlike 401(k)s, where you might outlive your savings.


PERSI Contribution Rates


With every paycheck, a portion of your gross salary automatically goes to your PERSI Base Plan. You don't get a choice about this. It’s required if you qualify for PERSI. Your employer also adds a percentage of your salary.

 

The current contribution rates are:


  Public Safety School Employee General Member


Employee rate 10.83%                             8.08%                                          7.18%


Employer rate 14.65%                            13.48%                                        11.96%



Let's say you earn $60,000 a year as a teacher. You're contributing $4,848 annually to PERSI, and your district is adding another $8,088. That's $12,936 going into the system on your behalf every single year. 


Unlike a 401(k), where you choose your investments, PERSI puts these contributions into a professionally managed fund. You do not pick stocks or bonds. Investment professionals handle that to make sure the fund can meet its future promises to retirees.


Using the PERSI Retirement Calculator


The PERSI retirement calculator, available at persi.idaho.gov, lets you model different retirement scenarios based on your age, salary, and years of service.


The calculator shows what your monthly benefit would be if you retire at different ages. It's worth spending 15 minutes playing with the numbers. You might be surprised at how much your monthly payment changes based on when you retire.


Many public employees in their 50s are surprised when they use the calculator and see their pension might be smaller than expected, or sometimes better than they feared. Either way, it is better to find out now than just a few years before you want to retire.


The Retirement Age Rules You Need to Know About


PERSI has very specific rules on retirement age. You must understand these rules because they determine when you can retire.


Option 1: Age 65 (Age 60 for Public Safety)


You can retire with full PERSI benefits at age 65 (or age 60 for public safety employees), regardless of how long you've worked. Even if you have only 5 years of credited service, you're eligible at 65.


Option 2: The Rule of 90/80


This is the rule most public employees bank on for early retirement. To qualify, you need to meet all three of these requirements:


  1. You're at least 55 years old (50 for public safety employees)

  2. You have at least 60 months (5 years) of credited service

  3. Your age plus years of service equals 90 or more (80 for public safety employees)

If you retire before meeting the service age requirement or the Rule of 90/80, your retirement benefit will be reduced.


Here are some examples:


Jennifer is a teacher and is 58 years old. She has 32 years of service.


58 + 32 = 90 → full retirement


Martin is a firefighter with 30 years of service. He is 50 years old.


50 + 30 = 80 → full retirement


Both Jennifer and Martin are eligible for full retirement based on the Rule of 90/80.


If you meet the Rule of 90/80, you may be able to retire earlier than age 65 or 60. This can have a big impact on:


  • Your lifetime benefit


  • Your bridge strategy to Social Security


  • How much you need to draw from other accounts


How Your PERSI Benefit Is Calculated


Your monthly PERSI payment isn't a guess. It's based on a specific formula:


Average Monthly Salary × 2% (2.3% for public safety) × Months of Credited Service


Let's break down each piece:


Average Monthly Salary: PERSI looks at your highest consecutive 42 months of salary (that's 3.5 years). This is usually your final years of work when you're earning the most. If your highest 42 months averaged $5,000 per month, that's the number used in the formula.


The 2% (or 2.3%) Multiplier: This is fixed. For each month of service, you earn 2% (or 2.3%) of your average monthly salary.


Months of Credited Service: Every month you work and contribute to PERSI counts. Thirty years equals 360 months. If you took a few years off and came back to public service, only the months you actually contributed count.


Now let’s look at a real example:


Let's say you're a teacher whose highest 42 months averaged $6,250 per month, and you have 30 years (360 months) of service:


$6,250 × 0.02 × 360 = $45,000 per year, or $3,750 per month


That's your guaranteed monthly payment for life, starting when you retire. It will also receive cost-of-living adjustments (COLAs) over time to help keep pace with inflation.


Here's an interesting fact: based on historical data, most retirees make back every dollar they personally contributed to PERSI within approximately 3.5 years of receiving benefits. After that, all payments come from the investment returns on contributions and your employer's contributions.


If you retire at 60 and live to 90, you will get 30 years of monthly payments. Even if you only contributed for 25 years, you would still receive benefits for more than 30 years. This shows the value of a defined benefit pension.


PERSI Distribution Options: A Critical Decision


When you retire, you'll need to choose how to receive your PERSI benefit. This decision is permanent and irrevocable, so you need to understand your options:


Regular Retirement (Full Benefit)


You receive the full monthly benefit under the formula discussed above, and payments continue for your lifetime. When you die, payments stop. Nothing goes to a spouse or beneficiary.


This option gives you the highest monthly payment, but it offers no protection for your spouse if you die first.


Option 1: 100% Survivor Benefit


You receive a reduced monthly benefit, but when you die, your contingent annuitant (usually your spouse) continues receiving 100% of that same reduced benefit for the rest of their life.


This option typically reduces your benefit by about 10-15% from the full amount, but provides maximum protection for your spouse.


Example: Instead of $4,000 per month under Regular Retirement, you might receive $3,400 per month. If you die, your spouse continues receiving $3,400 per month for life.


Option 2: 50% Survivor Benefit


You receive a smaller reduction to your monthly benefit, and when you die, your contingent annuitant receives 50% of your reduced benefit for their lifetime.


This is a middle option. It reduces your payment less than Option 1, but also gives your spouse less protection.


Example: Instead of $4,000 per month, you might receive $3,640 per month. If you die, your spouse receives $1,832 per month for life.


Lump Sum Distribution


You can take all of your employee contributions plus interest as a lump sum and forgo the monthly pension entirely.


This is almost always a bad idea. You would lose the employer contributions, which are usually 60% or more of the total, and the guaranteed lifetime income. Most financial advisors would tell you to avoid this option unless you have a very unusual situation.


Which Option Is Right for You?


This depends heavily on your personal situation:


  • Are you married? If so, you should seriously consider Option 1 or Option 2 to protect your spouse. If you're single with no dependents, Regular Retirement makes sense.


  • What's your spouse's financial situation? If they have their own substantial pension or retirement savings, they may not need 100% of your benefit. If they'll depend on your pension as their primary income source, Option 1 is crucial.


  • What's your health status? If you have serious health issues and don't expect to live long in retirement, that changes the calculation. But be careful about betting against yourself living longer than expected.


  • Do you have life insurance? Some retirees take the full benefit (Regular Retirement) and use a portion of it to pay for life insurance that would provide a death benefit to their spouse. This can work, but requires careful analysis.


This decision is complex enough that it's worth sitting down with a financial advisor who understands pension planning. The right choice could mean tens or even hundreds of thousands of dollars difference over your combined lifetimes.


How PERSI Fits Into Your Complete Retirement Picture


PERSI alone probably won't fund the retirement you're dreaming about.


According to retirement research, the average retiree's income comes from multiple sources: Social Security, pension income, and personal savings (401(k)s, IRAs, and other investments). Very few people retire comfortably on a single income source.


Your Retirement Income Streams


Think of retirement income as a three- or four-legged stool:


Leg 1: PERSI Pension – Your guaranteed monthly payment for life based on your years of service and salary.


Leg 2: Social Security – Another guaranteed monthly payment based on your lifetime earnings. Most teachers and public employees also earn Social Security credits unless they're in a position that doesn't pay into Social Security.


Leg 3: Personal Savings – Your PERSI Choice 401(k), traditional IRA, Roth IRA, or other retirement accounts you've funded over the years.


Leg 4: Other Assets – Rental properties, taxable brokerage accounts, a business you might sell, or other investments.


The best retirement plans have at least three of these sources, and ideally all four. PERSI gives you a strong base, but it shouldn't be your only plan.


Why You Still Need to Save Outside of PERSI


Let's say your PERSI benefit will be $4,000 per month, and your Social Security will add another $2,500. That's $6,500 per month, or $78,000 per year.


Is that enough? Maybe. But:


  • What if you want to travel extensively in your early retirement years?


  • What about healthcare costs before Medicare kicks in at 65?


  • What if you need long-term care later in life?


  • What about leaving something to your children or grandchildren?


  • What if inflation erodes your purchasing power more than the COLAs can keep up with?


This is why financial advisors suggest having personal savings in addition to your pension. Even if your PERSI benefit is generous, having $500,000 or $1 million in a 401(k) or IRA gives you more flexibility and security than a pension alone.


The PERSI Choice 401(k): Should You Contribute?


In addition to the mandatory PERSI Base Plan, you have access to the PERSI Choice 401(k) — a voluntary defined contribution plan where you can contribute additional money for retirement.


For 2026, you can contribute up to $24,500 annually ($32,500 if you're 50 or older with catch-up contributions). These contributions are tax-deferred, meaning they reduce your taxable income now and grow tax-free until withdrawal.


Should You Use It?


The PERSI Choice 401(k) can be valuable:


Pros:


  • Higher contribution limits than an IRA ($24,500 vs. $7,500 for 2026)


  • Automatic payroll deduction makes saving easier


  • Tax-deferred growth


  • Loans may be available if you need emergency access


  • Keeps your retirement savings in one place alongside your pension


Cons:


  • No employer match


  • Limited investment options compared to an IRA


  • Fees may be higher than low-cost IRA options


  • Early withdrawal penalties before age 59½


Traditional IRA vs. Roth IRA: Which Is Better for PERSI Members?


Beyond your PERSI plans, you should consider opening an IRA to supplement your retirement savings. The choice between traditional and Roth depends on your situation.


Traditional IRA


  • Contributions may be tax-deductible (depending on your income)


  • Money grows tax-deferred


  • Withdrawals in retirement are taxed as ordinary income


  • 2026 contribution limit: $7,500 ($8,600 if 50+)


  • Required Minimum Distributions (RMDs) start at age 73


Roth IRA


  • Contributions are made with after-tax dollars (no deduction)


  • Money grows tax-free


  • Withdrawals in retirement are completely tax-free


  • 2026 contribution limit: $7,500 ($8,600 if 50+)


  • No RMDs during your lifetime


  • Income limits apply (phase-out begins at $153,000 for single filers, $242,000 for married filing jointly in 2026)


Which Makes Sense for You?


Here's our thinking for PERSI members specifically:


Consider a Roth IRA if:


  • You're earlier in your career and currently in a lower tax bracket


  • You expect your pension + Social Security to push you into a higher bracket in retirement


  • You want tax-free income to supplement your taxable pension payments


  • You want flexibility (Roth contributions can be withdrawn anytime without penalty)


Consider a Traditional IRA if:


  • You want the tax deduction now to reduce current taxes


  • You expect to be in a lower tax bracket in retirement


  • You're maxing out other retirement accounts and want additional tax-deferred space


For many teachers and public employees, a Roth IRA is a smart choice because their PERSI pension already gives them a base of taxable income. Having tax-free money in a Roth IRA gives you more control over your taxes in retirement.


Imagine being able to take $20,000 from your Roth IRA for a special trip without bumping yourself into a higher tax bracket or triggering taxation on more of your Social Security benefits. That's the power of tax diversification.


How Five Pine Wealth Management Helps


PERSI is a valuable benefit and is often one of the best parts of working in public service in Idaho. The guaranteed lifetime income it provides is becoming rare in today’s retirement world.


But PERSI by itself is not a complete retirement plan. It is a critical foundation, but still just one part of the bigger picture.


Understanding how PERSI works, when you can retire, how your benefit is calculated, and what distribution option makes sense for your family puts you in control of your retirement future. Combining your PERSI pension with smart use of Social Security, continued savings in IRAs and 401(k)s, and strategic planning around taxes and healthcare gives you the best chance of living the retirement you've earned.


You've spent 20, 30, or more years serving your community as a teacher, first responder, or public employee. You've earned this retirement. Take the time now to understand your benefits, make informed decisions, and build a plan that works for you and your family.


At Five Pine Wealth Management, we specialize in helping Idaho public employees navigate their retirement planning, including understanding how PERSI fits into your complete financial picture.


You've put in the years. Now let's make sure your retirement plan reflects that. If you have questions about your PERSI options, want to run the numbers together, or just want a second set of eyes on your plan, we'd love to chat. Reach out at info@fivepinewealth.com or give us a call at 877.333.1015.


Frequently Asked Questions (FAQs)


Q: Can I rely on PERSI alone for retirement?


A: PERSI provides a strong lifetime income, but most retirees still need other savings to cover taxes, inflation, and discretionary spending.


Q: What’s the difference between the PERSI Base Plan and the PERSI Choice 401(k)?


A: The Base Plan is a pension that pays income for life, while the Choice 401(k) is an optional account you control and invest yourself.


Q: What happens to my PERSI if I change jobs within Idaho public service?



A: Nothing. Your service credit automatically carries over between PERSI employers as long as you don’t withdraw your funds.


Join Our Newsletter


Plan smarter with our monthly financial tips + insights

When Saving Money Starts Getting in the Way of Living

May 21, 2026
Key Takeaways Saving money is important, but constantly postponing meaningful experiences can leave you financially secure and personally unfulfilled. Fear, habit, and identity often play a bigger role in spending decisions than numbers do. A healthy financial plan should support both your future security and your ability to enjoy life along the way. Imagine you’ve saved diligently for decades. You have a healthy income, growing retirement accounts, manageable debt, and investment balances that continue climbing year after year. Yet, somewhere in the back of your mind, a voice keeps saying, “Not enough.” So you hold off on the vacation or skip the kitchen renovation. You tell yourself you will spend more freely later, once things feel more certain. You keep asking yourself the same question, “Can we really afford this?” Sometimes the answer is yes by every objective financial measure, but emotionally, it still feels uncomfortable. For years, personal finance advice has focused heavily on the dangers of overspending. Save more. Spend less. Delay gratification. Avoid lifestyle creep. That advice absolutely matters. Many people would benefit from stronger saving habits. But there is another side of the equation that does not get discussed enough. Some people become so good at saving that they forget what the money was for in the first place. Am I Saving Too Much?  This question sounds almost absurd, and many people feel uncomfortable asking it. In our culture, saving is viewed as responsible and disciplined. Spending often gets framed as careless or indulgent. So when someone continues accumulating wealth year after year, nobody really raises concerns. But over-saving can create its own problems. We have worked with people who consistently save large percentages of their income while postponing almost everything meaningful to them. They delay vacations. Put hobbies on hold. Continue working in stressful jobs long after they financially need to. They keep waiting for some future point where they will finally feel safe enough to enjoy what they built. The challenge is that “enough” can become a moving target. As portfolios grow, lifestyles usually grow too. Concerns about inflation, healthcare costs, market volatility, taxes, and longevity all start competing for attention. Even financially successful people can develop a persistent fear that one wrong decision could jeopardize everything. That fear is often emotional rather than mathematical. In many cases, the numbers support far more flexibility than the person believes. The Psychology of Saving Money Saving behavior is deeply tied to emotion, identity, and the stories we tell ourselves about security. Understanding why you save the way you do is the first step toward making more intentional choices. Fear of running out is one of the most powerful drivers. Even people with substantial assets can feel that their wealth is fragile, particularly if they grew up without financial stability or lived through a major market downturn. The brain tends to overweigh dramatic losses compared to equivalent gains, which means the emotional pain of imagining a depleted account is often disproportionate to the actual probability of it happening. Habit reinforcement plays a significant role as well. If you spent 30 years in accumulation mode, consistently saving and reinvesting and growing, your financial behaviors became deeply ingrained. Transitioning from saving to spending, even intentionally, and when the numbers support it, can feel wrong at a gut level. The habits that built your wealth can work against you when the time comes to use it. Societal pressure adds another layer. High-earning professionals are often surrounded by messages that equate financial discipline with virtue. Spending on yourself can feel indulgent or even irresponsible, even when it’s neither. There is a difference between careless spending and deliberate investment in your own well-being, but the cultural script often blurs that line. For business owners and dual-income households, there is also the identity piece. When so much of your sense of self is tied to building, growing, and accumulating, shifting toward enjoyment requires a genuine psychological reorientation, not just a new budget line. Values-Based Spending Over-saving isn't fixed by spending more randomly. What actually helps is spending with intention — putting money toward things that genuinely matter to you. This is what we mean by values-based spending : aligning how money flows with what you care about. The exercise starts with a conversation about what you want your life to look like. Not the life you think you should want, and not the life your parents had or your colleagues' project, but the experiences, relationships, contributions, and comforts that would make your days feel meaningful and full. From there, a good financial plan becomes a permission structure. When your advisor can show you, concretely, that your goals are funded and your risks are managed, spending stops feeling like a threat to your security. It starts feeling like money doing what money is supposed to do. Values-based spending also helps you stop spending on things that don’t matter to you. Many high earners discover that their default expenditures have drifted away from their priorities over time. Redirecting those dollars toward what genuinely matters often feels better than a raw increase in spending. Signs You May Be Under-Living Financially A few patterns tend to show up repeatedly among chronic oversavers: You feel guilty spending money even after careful planning. Your savings goals continue increasing without a clear reason. You postpone experiences you deeply want because you “might” need the money someday. You struggle to define what financial freedom would look like for you. Your net worth keeps growing, but your day-to-day life feels largely unchanged. You continue working at a pace that negatively impacts your health or relationships, despite already being financially secure. None of these automatically means you are saving too much. But they are often signals worth examining more closely. Practical Steps to Align Your Money With Your Life Making the shift from over-saving to purposeful living does not require a dramatic overhaul. It starts with a few honest conversations and a willingness to examine some long-held assumptions. Start by revisiting your retirement projections with a financial advisor. Ask specifically what your models say about your ability to spend, not just your ability to accumulate. Many clients are surprised to find that their plan supports significantly more lifestyle spending than they had assumed. Build a "permission budget" for discretionary spending. This is not a ceiling on enjoyment but a deliberate allocation toward experiences and priorities you have identified as meaningful. Giving yourself explicit permission to spend in certain areas, backed by a sound financial plan, reduces the guilt that often accompanies even well-deserved expenditures. Consider what you are waiting for. If the answer is a number that keeps moving, or a level of certainty that financial markets will never provide, it’s worth exploring whether the hesitation is financial or psychological. A good advisor can help you separate the two. A Healthy Financial Plan Should Support Your Life A strong financial plan should create confidence, not permanent deprivation. Saving diligently is important, but there is also value in recognizing when enough may already be enough. The goal is for your spending to reflect your values, your priorities, and where you are in life right now. Because eventually, there has to be a point where the money begins serving you instead of the other way around. If you’ve been wondering whether your saving habits still align with the life you want to live, we’d love to help you think through it. At Five Pine Wealth Management , we help clients build financial plans that support both long-term security and meaningful living today. Call us at 877.333.1015 or email us at info@fivepinewealth.com to start the conversation. Frequently Asked Questions (FAQs) Q: Why do I feel anxious spending money even when I can afford it? A: Spending anxiety is often tied to the psychology of saving money. Past financial stress, market downturns, family experiences, and years of disciplined saving can condition people to associate spending with risk, even when their financial plan supports it. Q: Can over-saving negatively affect your quality of life? A: Yes. Constantly delaying travel, hobbies, family experiences, or personal goals in pursuit of “more” can lead to burnout, stress, and missed opportunities. Financial security matters, but so does enjoying the life your money was meant to support.

What's Inside Your 457? (And Why It Matters More Than You Think)

April 30, 2026
Key Takeaways Your 457 should work alongside your pension to support your overall retirement income plan. Many 457 plans are set on autopilot, but your investments shouldn’t stay that way as you near retirement. Understanding what you're invested in helps you make better decisions when markets move. Turning 50 is your signal to review your 457 more closely so you can check your contributions, risk level, and how it fits with your pension before retirement gets too close. Like many first responders in Washington and Idaho, you probably have a pretty solid grasp of your "Plan A." Between the WA LEOFF Plan 2 or ID PERSI, you’ve spent your career earning a guaranteed monthly pension. It’s the foundation of your retirement — the steady paycheck that arrives regardless of what the stock market does. But then there’s that "other" account. The one you’ve been tucking money into every pay period through deferred compensation. In Washington, it’s usually the Washington State Deferred Compensation Program (WSDCP); in Idaho, it’s often the State of Idaho 457(b) Plan. When we sit down with firefighters and police officers who are within 10 years of their "end of watch" date, they usually know two things about this account: how much is in it and that they’re glad they started it. But when we ask, 'What is that money actually doing?' — that question usually gets a pause. If you’re 50 or older, it’s time to move past the "set it and forget it" mentality. Let’s take a look at how your 457 works and how to make sure it’s working for you. 457 Plan Investment Options  Unlike your pension, which is managed by the state, your 457 is a “defined contribution” plan. That means the outcome depends entirely on how much you put in and how those funds are invested. A 457 plan is just a container. Think of it like a toolbox. What matters is what’s inside the box. Your account isn’t sitting in cash (at least it shouldn’t be). It’s invested in a mix of underlying funds, usually including: Stock funds (equities): These are your growth engines. They tend to go up over time, but they can be volatile. These could be U.S. stock funds or international funds. Bond funds (fixed income): These provide stability and income, but with historically reduced long-term returns. Stable value or cash equivalents: Lower risk, but also lower growth. Most public service 457 plans in the Northwest offer a menu of these options. Some people choose to build their own mix, while others choose a single “all-in-one” fund and let it do the work. This brings us to the most common choice we see… What is a Target-Date Fund? A Target-Date Fund (TDF) is designed to be a one-stop shop. The “date” in the name is the year the fund assumes you will retire. If you plan to hang up the uniform in 2030, you’d likely be in a 2030 fund. A TDF automatically shifts its risk level as you get closer to that date. This is called the glide path . When you are 20 years away from retirement, the fund is aggressive. It buys mostly stocks because you have time to recover from market crashes. As you get closer to the target year, the fund manager automatically “glides” the investments away from risky stocks and into “safer” bonds and cash. TDFs are built for the “average” American worker who relies solely on Social Security and a 401(k), but you aren’t the average worker. You have a LEOFF or PERSI pension. Because your pension acts like a “super bond” (stable, guaranteed income), being too conservative in your 457 might hinder your growth. Conversely, if you’re planning to retire at 53 (common for LEOFF 2) but your fund is target age 65, you might be taking way more risk than you realize. It’s also important to note that two funds with the same year, for example, 2035, can have very different levels of risk depending on the provider. One may still hold 60% in stocks near retirement, while another might be closer to 40%. How Risk Changes as Retirement Approaches In your 20s, 30s, and even early 40s, “risk” is your friend. Risk is what grows a $50,000 account into a $500,000 account. However, as you approach the age of 50, the definition of risk changes. That’s because you’re entering what we call the “retirement red zone,” roughly five years before and five years after your retirement date. This is when: Your portfolio is at its largest You have less time to recover from downturns You may soon rely on the money for income We look at two specific types of risk for our clients: Sequence of Returns Risk: The risk that a market crash occurs just as you start taking withdrawals. If the market drops 20% the year you retire, and you start pulling money out to travel or pay off the mortgage, your account may never recover. Inflation Risk: If you get scared and move everything into the “Fixed Account” or “Stable Value Fund,” you might not lose money, but you’ll lose purchasing power. If your account earns 2% but the cost of living goes up by 4%, you’re technically getting poorer every year. Finding the “Goldilocks” zone — not too hot, not too cold — is the primary job of a pre-retiree. The Age 50 Checklist Once you’re in your 50s, it’s time to stop running on autopilot and take a closer look at your 457. Check Your “Catch-Up” Options In 2026, the standard 457 contribution limit is $24,500; however, once you’re 50, you can add an extra $8,000 in “Age 50 Catch Up” contributions. Even better, if you're within three years of your normal retirement age and haven’t maxed out your contributions in previous years, you may be able to contribute up to double the normal limit ($49,000). This is a massive boost for your savings. Diversify Your Tax Buckets Most first responders have their money in a Traditional 457, meaning you get a tax break now but pay taxes when you take the money out. Both Washington and Idaho offer Roth 457 options. With a Roth, you pay the tax today, but the money grows and comes out tax-free. For high-earners who expect their pension to keep them in a higher tax bracket during retirement, having a “tax-free” bucket of money can be helpful. Coordinate With Your Pension If your LEOFF or PERSI pension covers 70% of your needed income, your 457 can afford to be a bit more aggressive in fighting inflation. If you plan to use your 457 to bridge the gap until you collect Social Security, that money needs to be protected differently. Let’s Take a Look Together At Five Pine Wealth Management, we work with first responders in Washington and Idaho who are approaching retirement and want clarity around their financial picture. We understand how LEOFF Plan 2 and PERSI fit into the bigger picture, and how your 457 can support the retirement you’ve worked hard to build. If you’d like help understanding what you’re invested in, we’d be happy to take a look with you. You can email or call us at 877.333.1015 to schedule. We’d welcome the conversation. You’ve spent your career looking out for the community; let us help you look out for your future. Frequently Asked Questions (FAQs) Q: Is a Target-Date Fund enough for my 457 plan? A: For many people, it is, but as you get closer to retirement, it’s important to review whether the fund’s risk level matches your timeline and overall financial picture. Q: Is there a penalty for taking money out before age 59½? A: No. Unlike a 401(k), the 457 plan has no 10% early withdrawal penalty if you leave your employer, making it an ideal tool for first responders retiring in their early 50s. Q: Should I choose a Target-Date Fund or build my own portfolio in a 457? A: Target-date funds offer simplicity, but building your own portfolio allows for more customization. If you have a pension that already provides a stable income, building your own could be a good option.