Find Financial Advisors for Oregon PERS Members: Q&A Insights from the Experts

Oregon PERS Members Get the Most From Their Benefits by Planning the Pension, IAP, and OSGP Together

Tier 1, Tier 2, and OPSRP members each follow their own rules for the PERS pension and the Individual Account Program (IAP), and many can also save in the Oregon Savings Growth Plan (OSGP) 457(b). Brenna Baucum, CFP®, says many clients struggle to see how these pieces interact, so she builds projections and tax planning around all three.

Requesting a Formal PERS Benefit Estimate Is the First Step Toward Retirement

A formal estimate prompts PERS to review your file, including salary reporting and years of service, so errors surface before you retire. From there, compare pension options such as Single Life, Joint and Survivor, and Lump Sum Settlement, and ask whether a service purchase like waiting time could raise your benefit.

Vet a PERS Financial Advisor on Education, Fee Structure, and Service Model

Look for experience with Oregon PERS and the CFP® designation, understand how fee-only, fee-based, and commission-based advisors are paid, and decide whether hourly, project-based, or ongoing wealth management fits your needs. Fee-only advisors generally present the least potential for conflicts of interest.

One common financial planning challenge unique to Oregon Public Employees is understanding the intricacies and maximizing the benefits of the Oregon Public Employees Retirement System (PERS). PERS members are either Tier 1, Tier 2, or OPSRP; each membership level comes with its own set of rules and benefits. Each one has a pension benefit and an Individual Account Program (IAP) they contribute during their working years. While employed, members receive an annual statement from their IAP account, but it can be difficult to infer relevant and helpful planning details. If you’ve had that issue in reviewing your annual statement, check out our blog, How to Read Your Oregon PERS Statement – A Step-by-Step Guide.

In addition, Oregon PERS members also have the option to participate in the Oregon Savings Growth Plan (OSGP) 457(b) plan for more tax-deferred savings. Many clients struggle to see how these elements interact with each other and the best strategies to maximize their retirement benefits. I work closely with my clients to educate them on their specific PERS tier, analyze their IAP and OSGP options, and develop a comprehensive retirement strategy tailored to their unique circumstances. This involves detailed projections, tax planning, and personalized investment advice to ensure they can achieve a comfortable and secure retirement.

When you show up to the Collective Wealth Planning site, you’ll see my services are uniquely tailored to meet the specific needs of Oregon Public Employees. With over a decade of experience advising Oregon PERS members, I have developed a deep understanding of the language and myriad of acronyms that can often be confusing. I offer expert guidance on service purchases, including waiting time, which can have a big impact on pension benefits. My thorough understanding of the various pension options available at each membership tier ensures that clients receive personalized, accurate advice. Additionally, I emphasize proactive tax planning within the various retirement accounts to ensure tax flexibility while working, and into retirement. This includes strategies to optimize withdrawals, manage tax liabilities, and balance tax-deferred growth with taxable investing.

For Oregon Public Employees approaching retirement age, a strategic and informed approach is crucial to ensure a smooth transition from living off a salary to relying on retirement income. The first step is to request a formal benefit estimate from PERS once you hit retirement eligibility. It’s the first time PERS is forced to dust off your file and ensure salary reporting, years of service, and other key elements are accurate. Check out our detailed guide on How to Read Your Oregon PERS Benefit Estimate to help make sense of what you see.

Carefully comparing the various pension options available is also vital to making the best decision for your unique situation. This includes understanding the implications of each option, such as Single Life, Joint and Survivor, and Lump Sum Settlement options. Our comprehensive blog post, Deciding Which Oregon PERS Pension Benefit is Right for You, provides valuable insights to help in this decision-making process.

Determining the most appropriate pension strategy is informed by a comprehensive financial plan. I work with clients to co-create a plan that integrates what they have with what they want to achieve and chart a path to get there. Income planning to replace the paycheck, proactive tax planning to ensure tax flexibility, and enough cushion to shift as life inevitably does. By simulating various retirement scenarios, I help clients visualize their financial future and make informed decisions to secure a comfortable, stable, and joyful retirement.

Transitioning from the accumulation phase to the decumulation or distribution phase can be an emotional experience, often bringing anxieties about outliving savings and adjusting to a new financial mindset. Understanding and addressing these emotional aspects is just as important as the financial planning itself. I discussed these topics in detail on a podcast, The Three Anxieties and Four Opportunities in Retirement, where I explore common concerns and strategies to embrace the opportunities that retirement brings. This holistic approach ensures that clients are financially prepared and emotionally confident as they enter this new chapter of their lives.

When considering hiring a financial advisor, Oregon Public Employees should vet potential advisors for three key aspects: education, fee structure, and service model.

Education: Look for advisors with experience navigating the Oregon PERS system and consider working with a Certified Financial Planner™ (CFP®). A CFP® designation indicates a high level of expertise and adherence to a rigorous code of ethics, which everyone wants when working with someone handling financials.

Fee Structure: Understand the different fee structures: fee-based, commission-based, and fee-only. Fee-based advisors may charge a combination of fees and commissions, commission-based advisors earn through the products they sell, and fee-only advisors charge solely for their services without earning commissions from product sales. Fee-only advisors generally present the least potential for conflicts of interest, as their compensation is tied directly to the advisory services they provide, ensuring their advice is unbiased and in your best interest.

Service Model: Assess the advisor’s service model to determine if it aligns with your needs. Advisors may offer services on an hourly basis, project-based engagements, or ongoing wealth management. Hourly and project-based services are suitable for specific advice or financial planning needs, while wealth management provides ongoing, holistic financial oversight.

Lastly, it is important to assess the qualitative skills of a potential advisor. Regardless of titles or the fee structure you decide is best for you, choosing a financial advisor may come down to finding one who believes in libertarian paternalism: they sincerely believe it is both possible and legitimate to positively impact your actions while respecting your freedom of choice. This includes your choice of whether to become their client and the countless choices you would face should you work together. (The concept of libertarian paternalism comes from behavioral economist Richard Thaler and legal scholar Cass Sunstein, authors of an excellent book called Nudge: Improving Decisions about Health, Wealth, and Happiness.)

You can pick up other tips on finding the right advisor for you by exploring our blog, How Do You Find a Financial Advisor.