Employer Retirement Plans & How to Supplement

The Retirement Anxiety of Middle Age: Are You Really Prepared?

Middle age often sparks a quiet but persistent anxiety: Am I financially prepared for retirement? You look at your employer’s retirement plan, maybe a 401(k), CalPERS pension, or a RAF IRA, and wonder if it’s enough. You hear about Roth IRAs, Traditional IRAs, index funds, and annuities—but much of the information seems contradictory and confusing. The fear of outliving your savings looms large, and you’re left questioning how much money is “enough.”

The truth is, for most people, relying solely on what an employer provides is like relying on Medicare for health care in retirement—it helps, but it doesn’t cover everything. That’s where supplemental retirement planning becomes not just smart, but essential.

Employers across the U.S. typically provide one of several retirement benefits:

• 401(k) or 403(b) Plans – Employees contribute pre-tax dollars, often with an employer match.
• Pension Systems Like CalPERS – State and public employees may qualify for defined benefit plans.
• RAF IRA and Other Specialized Accounts – Certain sectors provide unique retirement arrangements with tax advantages.
• Traditional IRA Options – In some cases, employers allow payroll contributions to individual accounts.

These plans provide a foundation, but they are designed with limits: contribution caps, limited investment choices, and dependency on market performance or employer solvency.

Think of these plans like Medicare—they’re incredibly valuable, but they don’t cover all your needs. Just as Medicare doesn’t pay for every health expense, employer retirement benefits don’t fully guarantee long-term financial security.

Key limitations include:

• Contribution Limits (e.g., $23,000 max in 401(k) for 2025 if under 50).
• Lack of Flexibility — many plans limit your investment options.
• Market Risk — your nest egg fluctuates with the economy.
• Longevity Risk — you may outlive the income your plan generates.

That’s why supplemental planning—through Roth IRAs, Traditional IRAs, annuities, or index strategies—is so crucial.

(For more on the basics of IRAs, see our Retirement Planning Guide.)

Meet Linda. She worked for 35 years at a Fortune 500 company, diligently contributing to her 401(k). By the time she retired, she had $700,000 saved. It seemed like plenty—until she started withdrawing for living expenses.

• Taxes ate into her withdrawals.
• Market downturns reduced her account value.
• Inflation eroded her purchasing power.

Within 12 years, Linda’s savings were stretched thin. She had no supplemental income streams to fall back on.

Now compare this with Mark. Like Linda, he contributed to his employer’s plan—but he also opened a Roth IRA, funded an Indexed Universal Life (IUL) policy, and purchased a fixed annuity. When market downturns hit, his annuity and Roth IRA provided stable, tax-advantaged income. His IUL cash value gave him flexibility. Instead of anxiety, Mark had confidence.

Employer plans are the starting line, not the finish line. To retire comfortably, you need supplemental products that provide:

• Tax diversification (Roth IRA vs. Traditional IRA).
• Income guarantees (annuities).
• Protection from market loss (index strategies).
• Flexibility and liquidity (life insurance with cash value).

(See how tax-free income streams can work in our Tax Diversification Strategies article.)

Retirement planning is like building a house—you need different tools and materials for different jobs. Employer plans lay the foundation, but you need walls, a roof, and insulation to protect your future. Here’s how to marry different products together:

1. Employer Plan (401k, CalPERS, RAF IRA): Contribute at least enough to get the full employer match. This is free money.
2. Roth IRA: Add tax-free growth and withdrawals in retirement, balancing the taxable nature of employer accounts.
3. Traditional IRA: Use if you expect to be in a lower tax bracket later.
4. Indexed Strategies (IULs, Fixed Index Annuities): Protect principal from market downturns while participating in growth.
5. Guaranteed Income Products (Annuities): Provide a pension-like stream you can’t outlive.

• Annuities: These offer guaranteed income, helping solve the “outliving your money” problem.
• Life Insurance with Living Benefits: Protects your family while also giving you access to funds for emergencies.
• Tax-Advantaged Investments: Products like Roth IRAs and the Rockefeller Method reduce your exposure to future tax hikes.

The major takeaway is this: employer plans are necessary but not sufficient. Just as Medicare doesn’t cover all health costs, your 401(k), CalPERS pension, or RAF IRA won’t cover all your retirement needs. The solution is proactive, supplemental planning that balances risk, growth, and tax efficiency.

When you integrate products like Roth IRAs, annuities, and index strategies, you take control of your financial destiny instead of leaving it to chance.

The best way to compare plans is through analysis. At Russell Financial Solutions, we provide a free retirement review that looks at:

• Your Current Projections
• Your Risk Profile
• Portfolio Strengths and Weaknesses
• Gaps in Your Income Strategy

Don’t leave your retirement to chance. Schedule your free review today, and let’s build a retirement plan that works for you.

👉  Schedule Your Free Retirement Review