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Ask Dave

Forced To Contribute

Brian works for the police department and has a stable pension, but should he put all his savings there?

QUESTION: Brian is required to contribute to 9% of his paycheck for pension. Once he is debt free, should he take another 6% and put it toward retirement to make his 15%? Dave shares some magic numbers.

ANSWER: That would be fine. I might even do a little more. Your pension is probably pretty stable if you work for the police department. If it didn’t feel stable, I’d push you to go more than 6%. You can count that pension contribution as part of your 15%. For the remainder, go with a Roth IRA invested in good growth stock mutual funds with a long track record.