Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington State public employees.

The moment the numbers finally work

There is a moment on a planning call I have learned to watch for.

We have gone through the DRS pension estimate. We have modeled the DCP withdrawals, the healthcare bridge to Medicare, the Social Security timing. The plan holds. I have been sharing my screen for twenty minutes, walking through the projection, and I say some version of, “You can do this.”

And what comes back is not relief. It is a long pause.

Not every time. But often enough that I have stopped being surprised.

Take Curt. He is 51, a fire captain with 27 years of service credit in LEOFF 2. His savings are solid. His plan works.

He is quiet for a few seconds. Then he says, “Okay. But what would I actually do?”

That question is the one most retirement plans never answer.

The fear is not about the money

Teresa Amabile, a Harvard Business School professor emerita, spent a decade studying how people move through retirement, drawing on more than 200 interviews with 120 professionals1.

Her finding is one I keep coming back to. When healthy, financially secure, accomplished people hear the word retirement, what surfaces is fear, uncertainty, and a sense of losing who they are2. Money is rarely the source of it.

So Curt’s pause makes sense. He is not scared of running out. He is scared of Tuesday.

Retiring is four tasks, not one date

Amabile’s research frames retiring as four pieces of work rather than a single event: deciding when and how to go, detaching from work practically and psychologically, building a first draft of a new life structure, and eventually settling into one that holds1.

Washington State public employees carry something extra through all four of those.

Twenty-seven years in one department does something to a person. The shift schedule that has organized your family’s life since your kids were small. The crew. The role you play at three in the morning when nobody else can.

You do not just turn in gear. You turn in a version of yourself.

Where the DRS calendar helps, and where it lies

Here is what I find useful about the DRS system. It gives you a date.

Under LEOFF 2, full retirement comes at age 53 with at least five years of service credit. You can go as early as 50 with 20 years, but the benefit is reduced by up to 3% for each year before 533. That is a smaller haircut than most plans impose. PERS 2, TRS 2, and SERS 2 members generally wait until 55 with 20 years, with steeper reductions before 654.

For Curt, that means he is already eligible. Right now. Two years from a full benefit, and eligible today at a reduction he can afford.

The date feels like an answer. It is not. It is a window opening.

Eligibility tells you when the pension math permits you to leave. It says nothing about whether you have anything to leave toward. I have watched people treat those as the same thing, and it usually surfaces about eight months in.

What actually helps, before the last shift

Separate the decision from the date. I ask clients to name their earliest eligible date, then deliberately set it aside for a session. If you would still want out on that date after the pension question is fully settled, that tells you something. If you would not, that tells you something too.

Detach in pieces. Amabile’s research found the psychological detachment from a long career is the hard part, and it rarely happens cleanly on a final Friday1. Curt starts teaching a fire science course at the community college two years before he plans to go. It is not a side gig. It is a rehearsal.

Expect the first version to be wrong. The third task is building a provisional life structure, and provisional is the operative word1. People try something, find it does not fit, and rebuild. That is the process working.

Fund the life you describe, not a generic one. Once Curt tells me he wants to teach part time and take two long steelhead trips a year, the plan changes shape. The teaching income shifts his Roth conversion window. The travel front-loads spending in exactly the years he is paying his own health premiums.

Those years have hard deadlines attached. PEBB must receive your retiree enrollment form no later than 60 days after your employer-paid or COBRA coverage ends, and you have to be vested and eligible to retire under a Washington State plan when that coverage ends5. Miss the window and you can lose the option.

The money follows the life. Not the other way around.

The question I ask

It is not “what are your goals for retirement.” Nobody can answer that.

I ask people to describe a Tuesday.

Not the first week, when everything still feels like vacation. A Tuesday in October of your second year. What time do you get up? Who do you talk to? What is on the calendar that you would be disappointed to miss?

Most people cannot answer at first. Curt got about as far as coffee.

That is fine. It is a diagnostic, not a test. The blankness after coffee is the work that is left, and it is far better to find it two years out than two months in.

Where to start

Pull your DRS benefit estimate and find your earliest eligible date. Write it down. Then stop looking at it.

Instead, try describing that Tuesday out loud to your spouse. Notice where you run out of things to say.

Bring that gap into your next planning conversation. It belongs there as much as the pension option election does.

The plan I build for Curt is not really a withdrawal strategy. It is a funding mechanism for an answer he has not finished writing.

That is the part worth getting right.

​Sources
1. Harvard Business School. “Retiring: Creating a Life That Works for You.” Amabile, Teresa M., Lotte Bailyn, Marcy Crary, Douglas T. Hall, and Kathy E. Kram. https://www.hbs.edu/faculty/Pages/item.aspx?num=66672
2. Amabile, Teresa M. “The Surprising Realities of Retirement.” Thought Sparks. April 2026. https://thoughtsparks.substack.com/p/the-surprising-realities-of-retirement
3. Washington State Department of Retirement Systems. “LEOFF Plan 2.” https://www.drs.wa.gov/plan/leoff2/
4. Washington State Department of Retirement Systems. “Twenty years might be your retirement milestone moment.” August 2025. https://www.drs.wa.gov/twenty-year-milestone-moment-newsfeed/
5. Washington State Health Care Authority. “Retiree eligibility.” https://www.hca.wa.gov/employee-retiree-benefits/retirees/retiree-eligibility

Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington State public employees.

A quiet moment on a Tuesday call

Marcus went quiet during a meeting recently.

He is 55, a facilities manager for the county, and he has 28 years in PERS 2. He and his wife have done everything right. They maxed the DCP for years. They saved outside of it too. On my screen, the plan looked healthy. More than healthy.

So I told him the truth. His plan could support a good deal more spending than he was doing now.

That is when he got quiet.

Then he said, “But what if something happens?”

I have heard some version of that sentence more times than I can count. And it almost always comes from the people who are in the best shape to retire.

The savers have the hardest time

Here is the part that surprised me when I first started paying attention to it.

The clients who struggle most with spending are usually the ones who saved the best. Decades of the same habit. Save, and then save a little more. That habit does not switch off the day you retire.

The numbers here are almost hard to believe. Following the well-known 4% rule, retirees finish with more than double their starting wealth in about two-thirds of historical scenarios, and they are more likely to end up with five times what they started with than to end up with less1.

Most diligent savers never come close to running out. They are far more likely to reach the end with plenty left over and a long list of things they never let themselves do.

Why this hits Washington public employees harder

If you are in PERS, SERS, TRS, LEOFF, or PSERS, you have something most private-sector savers do not. A pension.

Your Plan 2 or Plan 3 pension pays a guaranteed monthly benefit for the rest of your life2. That is a paycheck that shows up whether the market is up or down.

And that quietly changes the math. Research from the Employee Benefit Research Institute found that retirees with pension income held onto their assets far more tightly than those without one. Pensioners' assets fell only about 4 percent over 18 years, compared with 34 percent for everyone else3.

So the pension that gives you security can also make you too careful. Your bills are already covered by the pension and Social Security. Your savings just sit there. And for a lot of public employees, that money never gets used for the life it was meant for.

Why “enough” keeps moving

Brian Portnoy, a behavioral finance writer, draws a distinction I come back to often.

Being rich is the pursuit of more. Ask someone with a million dollars what “enough” looks like, and they will usually say two. Get to two, and the number becomes five. The finish line keeps moving.

Wealthy is different. It means having enough to fund a life that actually matters to you. The kind of life you would design for yourself if no one else were watching.

For most of the public employees I work with, that life is not extravagant. It is more time with the grandkids, or the cabin near the water they have been talking about for years. Often the things that matter most cost the least.

The same fear shows up in your portfolio

That instinct to protect what you have does not stop at spending. It shows up in how people invest, too.

A properly diversified portfolio always has something lagging at any given moment, and the temptation is to react to whatever is down. Portnoy put it memorably once: diversification means always having to say you're sorry4. Learning to sit with that discomfort, instead of bailing on a sound plan because one piece is underperforming, is the same muscle that lets you spend with confidence later.

What actually helps

I don't have a trick that flips the switch. But a few things move people from scared to spend toward comfortable.

Name it out loud. Knowing that great savers commonly feel this way takes some of the shame out of it. It is normal. In a way it is just what happens after doing the hard thing well for 30 years.

Run the numbers with someone. There is real clarity in seeing your pension, your Social Security, and your savings laid out together as one paycheck. Most of the fear lives in the gap between what people assume and what the plan actually shows.

Write down what your version of “enough” looks like. Not dollar figures. The experiences. Once it is on paper, it stops being a vague someday and becomes a plan.
Then practice. This is the one that stays with me. You don't have to wait for the retirement date to start living a little. If you plan to retire at 58, start leaning into that life at 55.

Where to start

There is no 30-day plan here and no urgency. This is a slow shift, and it should be.
Pull your most recent pension estimate from your DRS online account so you know your real number. List the two or three things you would actually want to spend on if you gave yourself permission. And if a specific “what if” is what holds you back, bring that worry to a planning conversation and stress test the plan against it. See what actually happens.

Marcus is still working through it. But on our last call, he mentioned he and his wife finally booked the trip they had been postponing for six years.

That is the whole point.

​Sources
1. Kitces, Michael. “The Consumption Gap In Retirement: Why Most Retirees Will Never Spend Down Their Portfolio.” Nerd's Eye View, Kitces.com. https://www.kitces.com/blog/consumption-gap-in-retirement-why-most-retirees-will-never-spend-down-their-portfolio/
2. Washington State Department of Retirement Systems. “Choosing Plan 2 or Plan 3.” https://www.drs.wa.gov/choice/
3. Employee Benefit Research Institute. “Asset Decumulation or Asset Preservation? What Guides Retirement Spending?” April 3, 2018. https://www.ebri.org/content/asset-decumulation-or-asset-preservation-what-guides-retirement-spending
4. Portnoy, Brian. “Diversification Means Always Having To Say You're Sorry.” Forbes, March 9, 2015. https://www.forbes.com/sites/brianportnoy/2015/03/09/diversification-means-always-having-to-say-youre-sorry/

Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington State public employees.

The moment right before someone pulls the trigger

By the time a client is ready to retire, most of the hard work is already done.
The pension option is chosen. The savings are in place. We have mapped out the income, the taxes, the healthcare bridge to Medicare.

And then, right before retirement, the same thing happens almost every time.

They pause.

Then comes the question, usually some version of the same one.

What if I do this, and the market drops the week after?

Take Cheryl. She is a hypothetical county employee in her late 50s with about 30 years in PERS 2. She has done everything right. Saved steadily. Lived within her means.

She is not scared of running out of money someday. She is scared of starting at the wrong moment.

What the history actually says about timing

So let me tell you what the research shows.
Peter Lynch, who ran Fidelity's Magellan fund for years, once looked at what would happen to an investor with almost comically bad luck.

Imagine you invested money every year for 30 years, from 1965 to 1995, but you always bought on the single worst day of the year. The very top, every time.

You would have earned about 10.6 percent a year.1

Now imagine the opposite. Perfect timing, buying at the lowest point every single year. Your return would have been about 11.7 percent a year.

Thirty years of the worst luck imaginable trailed thirty years of flawless timing by roughly one percentage point.
The thing people lose the most sleep over turned out to matter far less than simply staying in the market.

Why retirement changes the math

Here is where I have to be honest, though.

That study is about someone still working and adding money for decades. Time was on their side.

When you are retired and pulling income out, you do not have 15 years to wait for a bad market to recover. The order your returns show up in starts to matter. A steep drop in your first few years, while you are selling to pay bills, can do lasting damage.

So the goal is not to time the market perfectly. Nobody can.

The goal is to never be forced to sell at the bottom.

And that is exactly where being a Washington public employee gives you an advantage most people never have.

What your pension really does

Cheryl's PERS 2 pension pays her a guaranteed monthly benefit for the rest of her life. It is not tied to how the stock market performs.2

Read that again, because it is the whole point.

Her paycheck in retirement does not care what the market did last week. It shows up the same in a boom and in a crash.

When your core bills, the mortgage, the groceries, the utilities, are covered by a check that arrives no matter what, a falling market becomes something you can watch and wait out instead of react to. You are not a forced seller.

That is a very different position than a private-sector saver whose entire retirement income depends on their portfolio. When the market drops 30 percent, they may have to sell investments at a loss just to cover the month. You do not have to sell anything.

The war chest that fills the gap

Of course, the pension rarely covers every dollar, especially in the early years before Social Security starts.

That gap is what actually worries people. And it is fixable.

For the money Cheryl will spend over the next several years, we do not leave it exposed to stocks. We hold it in what I call a war chest, roughly five years of planned withdrawals kept in high-quality, short-term bonds.

When stocks fall, she spends from the war chest and leaves her stock investments alone to recover. When markets settle, we refill the bucket.

There is a quiet bonus here too. Holding both stocks and bonds means that when stocks drop, we can rebalance, trimming the bonds that held up and buying stocks while they are cheap. It feels backward in the moment. It is one of the most powerful things a disciplined investor can do.

The pension is the floor. The war chest is the buffer. Together they are why Cheryl can leave her stocks alone long enough for time to do its work.

A few measured next steps

So the fear that keeps people up at night, the fear of one bad day, is mostly the wrong thing to worry about.

The better question is not “what if I pick the wrong moment?”

It is “what am I forced to sell when the market drops?” For a Washington public employee who plans ahead, the honest answer can be nothing.

If you are somewhere near where Cheryl is, start here.

Map your expenses into two buckets: what your pension will cover, and what your portfolio needs to handle.

Then make sure the money you will spend in the next several years is not sitting in the stock market.

And remember this is one piece of a larger plan. When you claim Social Security, how you sequence withdrawals, and how you handle taxes all work alongside the pension. But it starts with knowing your floor.

Get that right, and the next market drop becomes something you read about, not something you fear.

​Sources
1. PBS Frontline. "Betting on the Market: Interview with Peter Lynch." https://www.pbs.org/wgbh/pages/frontline/shows/betting/pros/lynch.html
2. Washington State Department of Retirement Systems. "Choosing Plan 2 or Plan 3." https://www.drs.wa.gov/choice/

Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington State public employees.

The client who kept saying “one more year”

Ron showed up to our call last fall with a spreadsheet he’d clearly been staring at for months.
He’s 57. Public works supervisor for his county, nearly 30 years in PERS 2. Between his pension, his DCP balance, and what he and his wife have saved, the numbers worked. We ran them again. They worked again.

Then he said the thing I hear more than almost anything else.

“Let’s just give it one more year.”

I asked him why. Markets felt shaky. Maybe a little more cushion. You know how it is.

But I’d heard him say “one more year” the year before. And the year before that.

At some point it stops being a financial decision. (He knew it too. He just hadn’t said it out loud yet.)

When the math is done arguing with you

Here’s what I’ve come to believe after working with public employees who are this close to the door.

If you’ve got a pension coming, a DCP balance, and money in the bank, and the plan still checks out, no new number is going to set you free.

A behavioral finance researcher named Daniel Crosby puts it bluntly. He says if you handed someone like Ron a crystal ball that guaranteed he’d be financially secure for the rest of his life, most people in his shoes still wouldn’t retire tomorrow.

Sit with that for a second.

If certainty isn’t the thing holding you back, then the problem was never the money. And no spreadsheet I build is going to fix a problem that isn’t on the spreadsheet.

The two questions I started asking instead

So now, when a client is clearly ready on paper but stuck in real life, I stop running projections for a minute. I borrow two questions from Crosby’s work.

The first: if you knew for certain you’d be fine, would you walk away tomorrow?

When the honest answer is no, that tells us something. There’s something work is giving you that doesn’t show up on a balance sheet.

The second: what is that something?

For a lot of folks, especially the ones who’ve spent decades inside one agency, work is where the people are. It’s the team. The problem to solve. The quiet pride of being good at something. Take that away on a Friday with nothing waiting on Monday, and the pension doesn’t help much.

Crosby points out that men in particular tend to walk into retirement without much of a social life outside the job. I see it constantly. The financial plan is airtight and the life plan is blank.

It doesn’t have to be a light switch

One thing that’s helped my clients more than any withdrawal strategy is realizing retirement isn’t on or off.

You don’t have to grind full-time until a Friday and then do nothing forever.

Some of the happiest retired public employees I work with eased out of it. They went part-time first. Picked up some consulting. Kept one foot in the thing that gave them purpose while finally making room for the rest of their life.

That middle path has a financial bonus too. Every year you hold off tapping your DCP or your personal savings is a year that money keeps working. Your pension gives you a foundation most private-sector folks would envy, which means you have more freedom to design a slow exit, not less.

What actually fills the gap

Crosby talks about five things the happiest retirees tend to have lined up before they leave. I think about them with clients now almost as much as I think about Roth conversions.

Fun and leisure, the part everybody plans for. The social side, which most people don’t. Some kind of deep, absorbing work, paid or not, that makes you lose track of time. Something bigger than yourself, like volunteering or faith or community. And a reason to keep growing instead of coasting.

Money really only buys the first one. The other four you have to go get on your own.
That’s usually the part nobody warned them about.

Where the planning actually comes in

I’m a CPA, so I won’t pretend the numbers don’t matter. They do, and there’s real work to do before you leave.

You have a pension option to lock in, and that survivor decision is permanent. You have a healthcare gap to bridge from your late 50s to Medicare at 65, and the PEBB rules deserve a careful look before you assume anything. You have Social Security timing to coordinate with everything else, and that one tends to reward patience more than people expect.

That’s where I earn my keep. That’s the part I can build for you.

But I’ve stopped pretending it’s the whole picture.

A few honest next steps

If you’re the one saying “one more year,” try Crosby’s first question this week. If certainty wouldn’t change your answer, the thing in front of you isn’t financial.

Start sketching the life side while you’re still working. Who you’ll see. What you’ll build. What’s going to get you out of bed on a Tuesday in February.

And let’s lock down the financial pieces so they can’t be the excuse: the pension election, the PEBB-to-Medicare bridge, the income plan that pulls from the right account at the right time.
Ron and I are still working on his. The numbers were never really the holdup, and once he admitted that, the planning got a lot more useful.

​The plan on paper matters. I’ll always make sure yours is solid. But the retirement you actually want to live is a separate project, and it starts with being honest about what’s really keeping you at your desk.

Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington State public employees.

Dale comes to our first video call with his statements already pulled up on his screen.
He's a facilities manager for the county. Twenty-six years in, PERS 2, hoping to retire at fifty-eight.

He's done the hard part. He saved steadily in his DCP. The money is there.

So we start going through what he actually owns. Almost all of it sits in funds from one big, famous fund company. The kind of name you'd recognize from a commercial or a stadium.

I ask him why those funds.

He pauses. “I'm not sure,” he says. “They're a name I trust. I've seen them around forever.”

I hear some version of that more often than you'd think. And it makes complete sense. We're wired to reach for what feels familiar.

But familiar and better are not the same thing. And the space between them can quietly cost you.

What the research actually found

There's a simple experiment that shows this better than anything I can say.

Researchers handed people two index funds and asked how they'd split their money. Same holdings. Same fee. Line by line, the exact same fund. The only difference was the name on the label, one familiar and one generic.

There's no financial reason to prefer one over the other. The money should land somewhere near 50/50.

It didn't. People put 65% into the familiar name and just 35% into the identical generic version1. They even guessed the unfamiliar fund was more likely to lose money, for what was literally the same investment1.

The name didn't change anything inside the fund. It only changed how people felt about owning it.

Why does that happen? Because familiarity lowers our sense of risk, whether or not the actual risk is any different2. We don't study the unfamiliar fund and decide it's riskier. We feel that it is, and then we look for reasons to back up the feeling.

And before you assume this is a rookie mistake, it isn't. Even advisors managing money for wealthy clients show the same pull toward brand-name choices5. It's human, not amateur.

Why the famous names tend to fall short

Here's the part that surprises people.

When you line up the actively managed funds from the big, famous fund families against the benchmarks they're trying to beat, most of them fall short. One analysis found that 69% of Goldman Sachs active funds lagged their benchmark or didn't survive. Even at Vanguard, a firm practically synonymous with smart investing, 63% of its active funds underperformed1.

The star manager doesn't hold up much better. S&P tracks whether top funds stay on top, and not one of the top-performing U.S. stock funds at the end of 2020 was still in the top group four years later3. Not one.

It gets worse once you realize the lineup you see today is already the highlight reel. The funds that stumbled badly were quietly closed or merged away, and their track records went with them1.

So why do the recognizable names so often trail?

Part of it is just math. Back in 1991, economist William Sharpe showed that after costs, the average actively managed dollar has to underperform the average index dollar by the amount of those costs4. Active and passive together own the whole market, so as a group the active side can't beat it after fees.

Part of it is the business model. A big fund company gets paid for gathering assets, not for beating the market. A fund that grows from one billion to ten billion collects far more in fees whether or not it ever outperforms. And the name is recognizable largely because the firm spent a fortune making it that way. That spending comes out of someone's returns. Usually yours.

This shows up beyond fund companies, too. Even in the “independent” advice world, private equity now controls close to a quarter of the assets under management6, which brings its own pressure on fees and service. None of that makes a firm bad. It just means the name on the door doesn't tell you whose interest comes first.

What to do instead

I don't want to leave you with a pile of discouraging data and no path forward. There's a better way to approach this. It just means trusting a different set of signals.

Start with your pension. Your DRS pension is a stable, lifelong foundation that most private-sector savers will never have. That foundation is exactly what lets the rest of your money take sensible market risk, instead of reaching for whatever feels safest.

From there, own broadly instead of betting narrowly. Almost no one beats the market reliably, and you can't know in advance who will, so own a wide slice of it and let it work.

Then control the things you actually can. As a CPA, this is the piece I push hardest on. You can't dictate next year's return, but you can control what you pay in fees and taxes, and over a long retirement those add up.

And ask better questions, of a fund or of the person recommending it. What does this fund cost? Can you explain why it's in my portfolio without pointing to a famous name or a recent hot streak? Are you a fiduciary, legally required to put my interest first?

A measured next step is simple. Pull up your DCP and any IRA statements and write down what you own and what each piece costs. For every holding, ask whether you can explain why it's there, beyond the name. If you can't, that's worth a conversation, not a panic.

Trusting the right things

The point of all this isn't to stop trusting. Trust matters enormously in investing, because it's what keeps you in your seat when markets get scary. The problem is never that people trust. It's that so many of us trust the wrong things.

So aim it carefully. Trust the weight of the evidence over the comfort of a logo you happen to recognize.
When Dale and I rebuilt his portfolio, nothing about it would impress anyone at a dinner party. There were no names he'd recognize from a stadium. But he could explain every piece of it, and why it was there.

That's the part that actually matters.

​Sources
1. Index Fund Advisors. “The Psychology of the Label: Familiar Names Can Make Poor Investments.” January 20, 2026. https://www.ifa.com/articles/psychology_label_familiar_names_make_poor_investments
2. Weber, E. U., Siebenmorgen, N., & Weber, M. “Communicating Asset Risk: How Name Recognition and the Format of Historic Volatility Information Affect Risk Perception and Investment Decisions.” 2005. https://scispace.com/pdf/communicating-asset-risk-how-name-recognition-and-the-format-2f8flbykyg.pdf
3. S&P Dow Jones Indices. “U.S. Persistence Scorecard.” https://www.spglobal.com/spdji/en/spiva/article/us-persistence-scorecard/
4. Sharpe, William F. “The Arithmetic of Active Management.” 1991. https://web.stanford.edu/~wfsharpe/art/active/active.htm
5. Kostovetsky, L., & Warner, J. B. “Measuring Innovation and Product Differentiation: Evidence from Mutual Funds.” Journal of Finance, 2020. https://onlinelibrary.wiley.com/doi/10.1111/jofi.12853
6. AdvizorPro. “Private Equity Ownership in the RIA Space – 2025 Trends.” September 4, 2025. https://advizorpro.com/post/private-equity-ownership-ria-space
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