The Pension Pays for the Life. So What Is the 403(b) For?
This one is for the hospital people. Central Ohio is full of nurses, physicians, and thirty year hospital lifers who did everything right: took the pension, fed the 403(b) every paycheck, and arrived at the edge of retirement with a seven figure account. And when I open that account with them, I keep finding the same thing inside. Not a mistake. Fear, dressed up as an investment strategy.
WHY A SEVEN FIGURE ACCOUNT SITS SCARED
The fear is reasonable, so let me say that first. Markets are not linear, nobody handed these folks a course in portfolio construction, and the transition underneath it all is genuinely unsettling: simply going from a paycheck to retirement income is scary. Rates of return, inflation, taxes, all of it swirls together into one big unknown, and the natural response to an unknown is to grab the safest looking dial and turn it all the way down. So the account that took thirty years to build spends its retirement in the most timid setting the menu offers. Not because anyone decided that. Because nobody felt safe deciding anything else.
THE ARITHMETIC THAT CALMS THE ROOM
Here is what actually breaks the fear, and it is not a pep talk. It is a withdrawal rate. For a lot of hospital retirees, the pension and Social Security already cover the planned expenses, sometimes all of them, sometimes all but a small gap. So we do the division. If the life needs $24,000 a year from a $1,200,000 account, that is 2 percent. Then I show what 2 percent looks like next to what the rulebooks consider sustainable, and you can watch the shoulders come down. When people start to understand how little 2 percent is, the whole conversation changes, because the account is clearly not the grocery money. The pension is the grocery money. Which raises the better question: what is this account actually for?
THE FORK AFTER THE FEAR
Once that question lands, people go one of two directions, and I have seen both a hundred times. Some want to leave something for their kids. Some want to maximize their lifestyle while their knees still agree to the itinerary. And plenty want both, which is where the warm hands and cold hands conversation comes back, because it is a constant balancing act between giving later and living now. My usual answer refuses to pick a winner. Maximize the thing you want most. Then, in any year the spending comes in low, there is automatically room for the second and third goals: gifting while you are alive to see it, the charitable giving you always meant to get to. The plan funds the first goal on purpose and the next ones with the leftovers, and the leftovers show up more often than people expect.
A SIMPLE EXAMPLE
Diane is 63, a nurse with three decades at a Columbus hospital system. Her pension plus Social Security will cover the $8,000 a month her life actually costs. Her 403(b) holds $1,200,000, and it has been parked in the most conservative options on the menu since a scary stretch a few years back. We ran the plan with conservative growth assumptions and her real spending: the life funds, the travel funds, everything funds, and the account is asked for about $24,000 a year. Two percent. Seeing that number did what no amount of reassurance could. The account stopped being her security blanket and became a question, and her answers came quickly: 529 money for the grandkids with warm hands, a bigger travel line while her mom is still up for riding along, and the rest positioned for the long timeline the plan showed it actually has. Nobody pushed anything on her. The arithmetic did the talking, and the plan let her see the larger picture before she had to decide anything.
THE WHOLE IDEA
An account should get its settings from its job description. When the pension pays for the life, the 403(b) is not income protection anymore, and treating it like the grocery money costs real goals: the gifts you would have made with warm hands, the trips you would have taken, the plans your family never gets to hear about. Last week I wrote that every dollar above your sleep well at night number needs a purpose. This is the same idea one floor up. Fear is a default. Purpose is a decision. Seven figure accounts deserve decisions.
STILL WORKING? FILE THIS AWAY
If you work for a hospital or another nonprofit, check whether your employer offers a 457(b) alongside the 403(b), because many do and the limits stack. In 2026 you can defer $24,500 into each, which is $49,000 of room before catch-up contributions even enter the conversation. Now the honest part: most people do not use both accounts, and it is usually not ignorance. It is lifestyle balance, and balancing your life is a legitimate use of money. The double bucket is for the seasons when the life is funded and there is still income left over. If that is you, few savings opportunities in the entire tax code are bigger, and it is sitting in the same benefits portal you already log into.
WORTH A READ
403(b) contribution limits (IRS.gov)
IRC 457(b) deferred compensation plans (IRS.gov)
401(k) limit increases to $24,500 for 2026 (IRS.gov)
If your pension will carry the life and your account is still parked in its most nervous setting, reply anytime. Happy to run the arithmetic that shows what the account is actually being asked to do.
Curious what working together looks like? There is more at jcsretirementtaxadvisors.com, and if a conversation sounds easier, you can grab 30 minutes on my calendar whenever it suits you. No pressure, just a conversation.
Know someone who should be reading this? Forward it along, that is how most people find me. And if this was forwarded to you, one subscription at buckeyeretirementbrief.beehiiv.com gets you both briefs: retirement on Mondays, equity comp on Thursdays.
Jesse Stacy MTAX, CFP®, EA
JCS Retirement Tax Advisors
This newsletter is for education only and is not tax, legal, or investment advice for your situation. The example is illustrative, pension and Social Security specifics vary by employer and person, and how any account should be invested depends on your full plan, not on a newsletter.