Retirement Accounts



RETIREMENT ACCOUNTS UPDATE - 2026

It has been a very long time since I updated this page!

When I originally started tracking my retirement accounts on this blog more than a decade ago, retirement still seemed pretty far away. At the time, I was primarily tracking three accounts: my CalPERS pension, 457 deferred compensation plan, and Roth IRA accounts.

A lot has changed since then—both financially and personally.

Today, retirement is no longer some distant goal. If everything continues according to plan, I am currently targeting retirement in approximately four years. As that date gets closer, these accounts have become an increasingly important part of my overall Financial Independence strategy.

My retirement plan today is primarily built around three components:

• My CalPERS defined-benefit pension
• My 457 deferred compensation account
• My Roth IRA

I also maintain my taxable investment portfolio, including my dividend stocks, which provides another potential source of income and flexibility in retirement.

The numbers have certainly gotten larger since I last updated this page, but the basic philosophy remains the same: continue saving, continue investing, and build multiple sources of retirement income rather than relying entirely on any one source.

MY RETIREMENT BASKETS

CalPERS DEFINED-BENEFIT PENSION

My CalPERS pension continues to be an important part of my overall retirement plan.

Unlike a traditional investment account, a defined-benefit pension is ultimately designed to provide a lifetime retirement benefit based on a formula rather than simply an accumulated investment balance. There are a number of factors that will eventually determine the actual retirement benefit.

For purposes of this blog, however, I have chosen to keep things simple and track only the reported value of my pension. I won't be publishing estimates of my future monthly retirement benefit or the various assumptions that go into calculating it.

Pension Value

2014 – $210,287
2015 – $234,175
2016 – $259,665
2026 – $646,633

The reported value of my pension has increased by $386,968 since 2016 and has more than doubled over the past decade.

While the reported value doesn't tell the entire story of a defined-benefit pension, it provides a simple and consistent number for documenting my progress over time.

As I move closer to retirement, the pension remains the foundation of a broader retirement strategy that also includes my 457 deferred compensation plan, Roth IRA, taxable investments, and other assets.

457 DEFERRED COMPENSATION PLAN

My 457 account has experienced tremendous growth since I last regularly updated this page. Back in 2016, the account balance was approximately $129,000

457 Account Value

2014 – $118,660

2015 – $119,961
2016 – $128,946
2026 – $495,340

My 457 balance has increased by $366,494 since 2016 and is now approaching the half-million-dollar mark. 

One of the advantages of working in local government is having access to a governmental 457(b) deferred compensation plan. Similar to a 401(k), it allows employees to save and invest for retirement on a tax-advantaged basis

One particularly valuable feature of a governmental 457(b) is that distributions generally are not subject to the 10% federal early withdrawal penalty after separation from service, even when distributions begin before age 59 1/2. That flexibility could become particularly useful if I retire before reaching the traditional retirement age associated with many other retirement accounts.

Earlier in my career, I contributed aggressively to this account. As my income increased and my financial situation evolved, I continued increasing my retirement savings. 

Today, the 457 represents a significant second layer of retirement security beyond my pension. 

Rather than drawing heavily from this account immediately after retirement, my preference would be to allow as much of it as possible to remain invested and continue compounding. However, having access to these funds provides considerable flexibility for travel, larger expenses, investment opportunities, or simply supplementing my other retirement income when necessary. 

ROTH IRA

My Roth IRA remains another important component of my retirement portfolio.
Roth IRA Balance

Roth IRA Value

2014 – $17,925

2015 – $18,377
2016 – $22,398
2026 – $78,987

That tax diversification could become increasingly valuable.

My Rother IRA balance has increased by $56,589 since 2016

The Roth IRA serves a somewhat different purpose than my pension and traditional retirement savings because qualified withdrawals can ultimately provide tax-free income.

As I approach retirement, I also plan to explore gradually converting some of my traditional retirement assets to Roth assets. Depending on my income and tax situation at the time, Roth conversions may provide an opportunity to manage my taxable income and create additional tax flexibility later in retirement.

Rather than having all of my retirement income from taxable sources, having assets spread among traditional tax-deferred, Roth, taxable, and pension buckets should give me greater flexibility in deciding where to draw money from each year.   

RETIREMENT ACCOUNT PROGRESS

Looking back at the old numbers provides some perspective on just how much progress has been made.

2016

Pension Value: $259,665
457 Balance: $128,846
Roth IRA Balance: $22,398

Combined Value: $410,909

2026

Pension Value: $646,633
457 Balance: $495,340
Roth IRA Balance: $78,987

Combined Value: $1,220,960

Put another way, the combined value is now nearly three times what it was when I last regularly updated this page.

Of course, this isn't a perfect apples-to-apples comparison. A defined-benefit pension is fundamentally different from an investment account such as a 457 or Roth IRA, and its reported value shouldn't necessarily be viewed the same way as money sitting in an investment account.

Nevertheless, tracking the three together gives me a simple way to document the progress I've made over the years.

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ESTIMATE AT RETIREMENT (IN 4-YEARS - 2030)

CalPERS Pension Value at Target Retirement: $931,442

457 Balance: $848,861

Roth IRA Balance: $130,766

Combined Pension Value + 457 + Roth IRA: $1,911,069

These are obviously just estimates. Investment returns, future contributions, salary changes, pension calculations, and my actual retirement date could all significantly affect the final numbers.

Still, it's interesting to look at the trajectory. If these accounts were to continue growing at anything close to their historical pace, their combined reported value could approach $2 million by the time I reach my current retirement target.

MULTIPLE SOURCES OF RETIREMENT INCOME

One thing that has not changed since I first created this page is my desire to avoid relying entirely on a single source of retirement income. Back then, I viewed my dividend portfolio and other investments primarily as a safety net in case something happened to my pension.

Today, I look at things somewhat differently. My pension remains the foundation of my retirement plan, but the other assets I've accumulated provide additional flexibility, security, and independence. My retirement income could eventually come from several different sources:

• CalPERS Pension – The foundation and primary source of my retirement income.
• 457 Deferred Compensation Plan – A substantial pool of tax-advantaged retirement assets that can supplement my pension when necessary.
• Roth IRA – A source of potentially tax-free retirement income and additional flexibility when managing taxes.
• Dividend Portfolio – A taxable investment portfolio capable of generating another stream of income while providing the potential for continued long-term growth.
• Social Security – I have enough Social Security-covered work history to potentially qualify for benefits. With the repeal of the Windfall Elimination Provision (WEP), Social Security may provide another meaningful source of retirement income. Depending on the rules and my circumstances when I become eligible, divorced-spouse benefits could also factor into my Social Security strategy.

Having these different sources of retirement income should give me greater flexibility when deciding where to draw money from, how to manage taxes, and how to pay for larger expenses. More importantly, I won't have to rely entirely on any single source of income to fund the retirement I want.

FOUR MORE YEARS...OR MAYBE TWO?

Perhaps the biggest difference between when I originally wrote this page and today is that retirement finally feels real. In 2016, I wrote that I still had approximately 11 years before reaching age 55. Today, I'm only a little more than a year away from that milestone.

My current target is to retire in approximately four years, around the time both of my kids have finished high school. Working those additional years would allow me to:

• Continue increasing the value of my pension
• Grow my 457 and Roth IRA
• Continue building my dividend portfolio
• Pay down more of my mortgage
• Put myself in an even stronger financial position before retirement

That said, I would be lying if I said I haven't started thinking about leaving sooner. I'm currently toying with the idea of retiring in approximately two years, when my daughter graduates from high school. Whether I actually do that will depend largely on where I stand financially at the time and whether I'm comfortable giving up the additional financial benefits that would come from working another couple of years.

For now, four years remains the target.

My goal between now and then is pretty straightforward: continue saving, investing, reducing debt, and strengthening each part of my financial picture. I want to reach the point where retirement isn't something I have to postpone for financial reasons, but rather a decision I can make when the time feels right.

After more than a decade of documenting this journey, the finish line finally doesn't seem so far away. I'm already thinking about what I want the next chapter to look like—staying active, traveling, exploring new experiences, and simply enjoying the freedom of having greater control over my time.

Multiple sources. Greater flexibility. Financial freedom.