My dad worked for the railroad and retired on a pension. I didn’t know how lucky he was until I planned my own retirement.

The author, Rebecca Chamaa.

My dad was employed by the railroad all his working years and paid into the Railroad Retirement Program. His participation in the RRP meant he received a pension each month after his retirement that lasted the rest of his life with a survivor’s benefit that went to his wife after his death.

My dad’s pension was enough to cover his cost of living for the 20-plus years he lived after retiring. His pension meant that retirement concerns were off his mind and out of his hands. He wasn’t worried about outliving his funds. He wasn’t concerned with risky investments, stock market plunges, or interest rates.

As far as I can tell, he did zero financial planning beyond saving some of his income, but it worked well for him. That sounds like a fantasy scenario to me and those like me.

I’ve had to learn about endless financial topics to feel prepared

That strategy isn’t available to my partner and me, and it also means that I never got the chance to learn from my dad’s successes, failures, or missteps. He couldn’t teach me through example what to focus on or what to avoid.

For the past three decades, my partner and I have focused on learning more about investing, life insurance, 401(k)s, high-yield savings accounts, CDs, and emergency funds, all by ourselves. That is a lot of products to educate yourself on when starting with zero input from the generation that raised you.

We have been going with a three-legged stool approach. One leg of the stool is the small pension my partner will receive from his latest job (a fraction of what my dad received and not at all intended to replace a paycheck); the second leg is our Social Security checks; and the third leg is our 401(k) accounts combined with any other investments we have built up.

Retirement puts a lot of risk on people who can’t afford it

With fewer and fewer people receiving pensions every year (or having them shrink to a small portion of a former salary), it is difficult to follow that approach. Some people can replace the pension with more savings or more significant contributions to their 401(k)s, but not everyone can.

All this means that financial literacy is more important than ever, but it isn’t always straightforward. Even working with a financial planner requires educating yourself on the products they recommend and knowing your risk tolerance, especially when yours differs from your partner’s; I have a very low threshold for risk, while my partner has a much higher one.

This system puts a lot of risk on the shoulders of people who can’t afford a trial-and-error approach. You only get one chance once you stop working. The money is there, or it isn’t.