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Choosing the Best TPMG Pension (Plan 1) Option for Your Retirement

As you approach retirement with TPMG, you’re faced with a pretty big decision—how you want to receive your pension benefits. It’s a significant choice, and we want to make sure you have all the info you need to make a decision that feels right for you. 

How Your Pension Adds Up 

Let’s break down how your pension is calculated. It’s pretty straightforward: for the first 20 years of service, you receive 2% of your highest average pay. If you’ve been with TPMG more than 20 years, you’ll get an additional 1% for every year beyond that. So, if you’ve clocked in 30 years, you’re looking at a pension that’s 50% of your highest average pay, delivered to you in monthly installments for the rest of your life. This is based on what is called a Single Life Annuity, ensuring you a steady income for life with no continuation for beneficiaries after you’re gone. 

Your Pension Options Explained 

TPMG offers several pension options, each tailored to different needs and situations. In general, the more protections and guarantees you opt for the lower the payments: 

Single Life Annuity

  • Enjoy consistent monthly payments for life. 
  • Note: No payments are made to beneficiaries after your death. 

Joint Retirement Income Annuity

  • Payments continue for you and your partner. 
  • If one passes, the survivor gets a reduced amount (50%, 66-2/3%, or 75%) for their remaining lifetime.  

100% Joint Retirement Income Annuity with 15-Year Guaranteed Period and Pop-up

  • Ensures both you and your partner receive monthly payments for life. 
  • If one of you passes, the other continues to receive full payments. If both pass within 15 years, a beneficiary receives payments until that period ends. 
  • If your partner passes before you, your payments pop back up to the full rate. 

Certain and Life Annuity

  • A fixed monthly payment for life. 
  • Should you pass within a chosen period (5, 10, 15, or 20 years), your beneficiary continues receiving payments until that time is up. 

Installment Annuity

  • Choose a period (5, 10, 15, or 20 years) for monthly payments. 
  • If you pass within this time, payments continue to your beneficiary until the end of the chosen period. 

Which Option Is Best for You?

Choosing the right option depends on your unique financial and personal circumstances: 

  • Best for Maximizing Current Income: Single Life Annuity is an option if you’re looking for the highest monthly income and don’t need to provide for dependents after your death. 
  • Best for Quick Access to Funds: The 5-Year Installment Annuity might be your pick if you prefer accessing your funds sooner for investment or large expenses. 
  • Best Security for a Spouse: The Joint Retirement Income Annuity with 50% Survivor Benefit is popular for couples, offering ongoing support without reducing the monthly benefits. 
  • Best Comprehensive Coverage: The 100% Joint Annuity with 15-Year Guaranteed and Pop-up provides the most protection, ideal if securing financial stability for a surviving spouse is a priority. 

Things to Consider 

  • Inflation Impact: Remember, fixed payments might lose buying power over time due to inflation. There is no TPMG plan 1 pension option includes annual cost of living adjustments (COLA). 
  • Health and Longevity: Consider your health and family medical history. Longer lifespans may benefit more from prolonged income options. 

Please Note: TPMG Plan 1 doesn’t include a lump-sum option. Many find the 5-year installment plan a handy alternative for direct fund management. Lump sums are only offered in select cases where a physician retires on disability status.

Making this Choice is a Big Step

Making this choice is a big step, and we’re here every step of the way to help you plan a retirement that is as rewarding as your career has been! We recommend chatting with a Capital Advantage financial advisor to tailor your pension choice to your overall retirement plan. 

How We Help Kaiser/TPMG Employees

At Capital Advantage, many of our clients are current and former Kaiser/TPMG (The Permanente Medical Group) employees.

We specialize in helping you navigate the intricacies of the rich, and often complex, Kaiser/TPMG benefit plans. Capital Advantage has been designing personalized financial plans and investment strategies for Kaiser hospital/health plan employees and TPMG physicians for decades. Learn more.

Author Profile

Ian Castille

The Author: Ian Castille

Ian is a Principal and Senior Financial Advisor at Capital Advantage, as well as a CERTIFIED FINANCIAL PLANNER™ (CFP®) and an Investment Advisor Representative. He is part of the investment committee, and is responsible for developing and maintaining client relationships, designing financial plans, and managing investment portfolios. Ian specializes in helping his clients navigate the financial transition to retirement. His work includes personalized strategies to reduce taxes, make smarter investment decisions, and optimize income streams. As an advisor, Ian believes his job is to bring peace of mind by providing financial clarity for his clients.