By Douglas Goldstein, CFPâ

My grandmother used to tell me that when she was dating my grandfather, she was particularly impressed with him because, “Grandpa had a government job with a pension.”  While I’m absolutely sure that she didn’t marry him for his pension, this got me thinking.  How much is a pension really worth?

Calculating whether your pension will adequately meet your retirement needs is very difficult. Often, the amount of monthly income that you will receive is based on a complex formula taking into account the number of years you’ve worked, your average wages, your retirement age and other factors.

Will your future pension suffice once you take inflation and unexpected expenditures into account? Whether you are relying on a corporate pension or on a government pension, be aware that you may or may not have sufficient financial backing until the end of your days. It’s up to you now to review your employment retirement benefits, evaluate your personal financial holdings, and do some calculations on your own. In considering the question of whether we can really count on someone else to take care of all our monetary worries, the answer, unfortunately, is no. 

Take responsibility for your own future

What can you do?  Create a financial plan, begin keeping a budget; save systematically, invest for growth and diversify.  Keep in mind that when you review your pension benefits, the figures might or might not portray what you will actually receive in your retirement years. Furthermore, a reasonable sounding sum quoted in today’s shekels might be a paltry amount when you retire, after being adjusted for inflation.

Although pension plans are an important component of your total retirement program, they are only one facet of your nest egg.  Don’t think that the new Israeli law requiring employees to give pensions to workers is the cure-all for your retirement woes.  Acquiring personal savings and investments that safeguard the real value of your money is a crucial aspect of your overall picture.  Remember, a comfortable retirement does not come easily.  To prepare for yours, you must plan carefully and set up a strategy that will work for you.

Douglas Goldstein, CFPâ, is the director of Profile Investment Services. He is a licensed financial professional both in the U.S. and Israel. He offers securities through Portfolio Resources Group, Inc. Member FINRA (formerly NASD), SIPC, MSRB, SIFMA. Accounts carried by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company. His book, Building Wealth in Israel: A Guide to International Investments and Financial Planning, (with a guest chapter on taxation by Leon Harris, International Tax Partner, Ernst & Young) is available in bookstores, on the web, or can be ordered at:www.profile-financial.com, (02) 624-2788 or (03) 524-0942. Building Wealth in Israel, ISBN: 193268784X 308 pages