The Wyoming Retirement System (WRS) pension is an impressive retirement plan, offering guaranteed income to thousands of Wyoming employees across hundreds of employers.
Among its many features, a cost of living adjustment, or COLA, is available at varying amounts. This feature helps your benefit keep pace with inflation, but it reduces your payment initially. When does opting for COLA make sense, at what levels, and what is the financial impact?
The financial shock of soaring inflation in 2022 caught everyone off guard. Within a matter of months, the price of rent, fuel, and countless consumer goods went through the roof. Having been in a period of relatively low, calm inflation for decades led us not to worry about this financial expense, until things went really wrong.
While inflation is now trending downward, inflation is historically always present, and there’s still a threat that unusually high inflation can rear its ugly head once again, especially given that most retirees expect to live another 20 to 30 years once they leave the workforce.
The WRS Public Employee Pension Plan serves more than 450 employers across the state “including state agencies, school districts, counties, cities and towns and other government organizations.” By Wyoming standards, it’s a big pension.
I’ve had the pleasure of helping several employees navigate some of the ins and outs of this pension plan, so it felt timely to do an overview of how the plan works, giving detailed focus to the benefit areas that have carried the most importance for my clients. The complete WRS pension handbook can be found at retirement.wyo.gov in the “Pension Handbooks” subsection under “Members.”
While the days of big, plump retirement pensions are dwindling, I still have regular conversations with individuals who have pensions through their workplace. This is a tremendous benefit generally providing a guaranteed stream of monthly payments (an annuity), and may include payments for a spouse or beneficiary.
But in some cases, receiving an annuity payment may not be the best option. In this article I’d like to explore the pros and cons of annuitizing your pension, versus another option that’s typically available as well: the lump-sum payment.