Real Stories

Similar Careers. Different Retirement Paths.

Kate and Maria spent their careers teaching. They earned similar salaries, retired with comparable pension benefits, and expected similar living expenses.

One important difference shaped their retirement choices: Maria also contributed to a 403(b).

See How Their Retirement Incomes Compare

Two Teachers. Similar Careers. One Important Difference.

Kate and Maria represent two hypothetical teachers approaching retirement with many of the same financial circumstances.

Both completed successful careers in education. Both finished with an average salary of $63,000. Each expects a pension equal to approximately 71% of that salary.

Their pension benefits are nearly identical. Their retirement-income resources are not.

Portrait representing Kate, a retired teacher in the hypothetical comparison.
KatePension income
Portrait representing Maria, a retired teacher in the hypothetical comparison.
MariaPension income + 403(b)

Kate, age 62, relied primarily on her pension and did not establish a 403(b). Maria, approximately age 61, also built 403(b) retirement savings.

Maria began around age 29 with $150 per month, gradually increasing her contribution to approximately $1,500 per month. After approximately 32 years, her hypothetical account reached approximately $700,000, using a hypothetical average annual return of approximately 6%.

Both receive annual pension income of $44,730—approximately $3,728 per month.

Kate and Maria are hypothetical composite examples created for educational purposes and informed by common real-world situations advisors encounter. The individuals shown are models and do not depict actual clients. These examples are not testimonials.

The Retirement Income Gap

Kate and Maria ended their careers with the same hypothetical $63,000 salary and similar pension benefits. The difference appears after retirement: Kate relies on pension income alone, while Maria also has an illustrative source of income from her 403(b).

From working income to retirement income
Annual working salary, pension income, and pension plus illustrative 403(b) income All three columns use the same vertical scale from zero to $80,000 annually. Working salary is $63,000. Pension income is $44,730, leaving an $18,270 gap relative to former working income for Kate. Maria’s illustrative 403(b) income adds $27,996 to the same pension, for combined retirement income of $72,726, which is $9,726 above former working salary. This is hypothetical, not guaranteed salary replacement. Pre-Retirement Working Income $63,000 Income Gap $18,270 annually $63,000 $44,730 $44,730 Illustrative 403(b) Income +$27,996 Combined Retirement Income $72,726 annually Working Salary Pension Income Pension + 403(b) Annual income · common vertical scale
  1. Working Salary$63,000 annually
  2. Pension Income$44,730 annually
  3. Income Gap$18,270 annuallyRelative to former working income
  4. Illustrative 403(b) Income Added+$27,996 annually
  5. Combined Retirement Income$72,726 annuallyPension + illustrative 403(b) income

Kate

Pension income only

Gap relative to former working income: $18,270 annually.

Maria

In this hypothetical example, the additional 403(b) income closes the difference between pension income and former working income.

Illustrative combined income above former working salary: $9,726 annually.

Pre-retirement salary and retirement-income figures are hypothetical and shown for educational comparison only. Former salary is an income reference, not an estimate of retirement expenses.

Kate

Pension income
Approximately $3,728/month
Illustrative 403(b) income
$0
Total monthly income
Approximately $3,728
Estimated monthly living costs
$5,000
Monthly amount below expenses
Approximately −$1,272

Maria

Pension income
Approximately $3,728/month
Illustrative 403(b) income
Approximately $2,333/month
Total monthly income
Approximately $6,061
Estimated monthly living costs
$5,000
Monthly amount above expenses
Approximately +$1,061

Income figures are shown before applicable income taxes and benefit deductions. Estimated living costs do not include income taxes.

More Than Monthly Income

Retirement can include irregular or changing expenses that may not fit neatly within a fixed monthly pension.

Maria’s 403(b) does not mean she plans to spend more. In this hypothetical example, she enters retirement with another source of assets that may provide additional income and financial flexibility—not a guarantee that every expense will be covered.

A Major Home Repair

An air-conditioning system, roof, water heater, or major appliance may need replacement. A fixed monthly pension does not automatically increase when the repair bill arrives.

A Vehicle Expense

A major repair or vehicle replacement can require thousands of dollars beyond normal monthly transportation costs.

Medical and Insurance Costs

Dental care, vision expenses, hearing services, prescriptions, insurance premiums, and other healthcare needs may increase with age.

Helping Family

Retirees may want to assist children, grandchildren, aging parents, or another family member without disrupting their own monthly finances.

Travel and Experiences

A short trip, family visit, or occasional vacation may be manageable when retirement income includes room for discretionary spending.

An Emergency Reserve

Access to retirement assets can provide another resource when an expense cannot be delayed or absorbed by monthly pension income.

The Same Lifestyle May Cost More Over Time

Kate and Maria may enter retirement with similar living expenses, but those expenses may not remain the same throughout retirement. Even if their lifestyle does not change, the cost of maintaining it may rise over time.

Hypothetical 3% annual inflation

  1. Retirement$5,000/month
  2. 10 years laterApproximately$6,720/month
  3. 20 years laterApproximately$9,031/month

A fixed monthly pension may continue to provide important income, while the cost of maintaining the same lifestyle may change over time. Having another pool of retirement assets may provide additional flexibility as expenses change.

The 3% annual inflation rate is hypothetical, not a prediction. Actual expenses and inflation rates will vary. Healthcare, insurance, home repairs, and vehicle costs may increase differently from general living expenses.

Your Retirement Path

What Could a 403(b) Add to Your Retirement Path?

Your retirement path will be different from Kate’s and Maria’s. Your salary, pension, savings, expenses, and retirement goals all help shape the picture.

A conversation can help you understand what you already have, identify a potential retirement-income gap, and consider how a 403(b) may fit alongside your pension.

Bring your questions. We’ll help you focus on the information worth reviewing before deciding what comes next.

Take the Next Step