Pensions once formed the backbone of retirement planning in America. That model is now the exception, not the rule. Only 15% of private-sector workers had access to a defined benefit pension in 2023, and fewer still can count on receiving one for life. If you’re heading into retirement without a traditional pension, you’re not alone. You have plenty of options.
Planning without a pension just means taking a more active role in shaping your income stream. Rather than receiving a fixed monthly check, you’ll need to build one using personal savings, Social Security, tax strategies, and thoughtful drawdown plans. The right combination can offer just as much security, with more flexibility along the way.
Rethink How You Generate Monthly Income
Without a pension, there’s no automatic paycheck. That doesn’t mean your retirement income has to feel unpredictable. The goal becomes creating a system that mimics the stability of a paycheck using different sources.
Social Security will likely form a base layer. The average monthly benefit in 2024 was $1,907, though higher earners can receive more. The timing of your claim affects this figure dramatically. For each year you delay past full retirement age (up to age 70), your monthly benefit increases by about 8%.
Beyond that, income must come from savings. That might include traditional IRAs, Roth IRAs, 401(k) accounts, brokerage funds, or annuities. The trick is coordinating withdrawals in a way that supports your lifestyle without creating a heavy tax burden or depleting your assets too quickly.
A retirement-focused advisor can help you model different income strategies, including the 4% rule, dynamic withdrawal methods, or bond laddering approaches. These aren’t set-it-and-forget-it strategies—they require review and adjustment over time.
Use HSAs to Your Advantage
Health Savings Accounts (HSAs) are one of the most tax-advantaged tools available, and they can play a powerful role in a pension-less retirement. If you had access to an HSA through a high-deductible health plan during your working years and managed to contribute regularly, you may be sitting on a valuable, triple-tax-free resource.
Money goes in pre-tax, grows tax-deferred, and can be withdrawn tax-free for qualified medical expenses. Unlike a Flexible Spending Account (FSA), HSA funds roll over year after year. You can invest the balance, let it grow, and use it in retirement when medical costs are likely to rise. Even if you’re already retired, your HSA can reduce pressure on your IRA or brokerage withdrawals. Instead of using taxable funds to cover dental work, prescriptions, or Medicare premiums, you can pull from your HSA and preserve your other investments longer.
In 2025, individuals can contribute up to $4,300 per year to an HSA, or $8,550 for families. Those 55 and older can add another $1,000 as a catch-up contribution. If you’re still working and eligible, it may be worth maxing this out as part of your retirement funding mix.
Make Your Investments Do More Than Grow
In a pension-based retirement, the investment portfolio is often a supplement. Without a pension, it becomes the engine. That means investment decisions need to reflect not just risk tolerance but income timing, tax bracket considerations, and future spending patterns.
Many retirees shift their portfolios toward more income-generating assets, like dividend-paying stocks, real estate investment trusts (REITs), or short-term bond funds. That shift can provide some predictability, but it shouldn’t come at the expense of long-term growth. A well-balanced retirement portfolio usually includes a blend of growth and income elements, adapted to your stage of life and withdrawal needs.
The sequence of returns also matters. If the market drops early in your retirement and you’re forced to sell at a loss, the impact can compound over time. That’s why some retirees maintain a few years’ worth of living expenses in more stable vehicles like CDs, short-term treasuries, or high-yield cash accounts. The idea is to avoid selling equities when prices are temporarily low.
Where Trusts Can Fit In
While not everyone needs a trust, they can provide important flexibility and control for retirees managing assets without a pension. A revocable living trust allows you to maintain ownership and control of your assets while streamlining distribution, managing incapacity, and avoiding probate.
For those planning to leave a legacy, trusts can also offer structure around how assets are distributed to children or charities. They may allow you to stagger distributions, provide for a surviving spouse, or protect certain assets from creditors.
Trusts also come into play for retirees who own real estate in multiple states or who expect to manage their wealth well into their 80s and 90s. Instead of relying solely on powers of attorney or beneficiary designations, you can create a structure that carries out your wishes with more clarity. Keep in mind, trusts don’t provide tax shelters by default. But when used alongside smart withdrawal strategies and estate planning, they can help you organize your assets in a way that reduces friction and preserves more for future use.
Building Your Own Safety Net
If you’re retiring without a pension, you’re building your safety net one layer at a time. You may use Social Security as a foundation, retirement accounts as the main funding source, and other tools—like HSAs, trusts, or even part-time work—to fill the gaps and protect your future.
The benefit of this approach is customization. You’re not limited to a one-size-fits-all monthly check. You can adjust your withdrawals based on market conditions, lifestyle changes, tax opportunities, or healthcare needs.
That level of personalization takes some planning, but you don’t have to do it alone. A retirement specialist can walk you through the pieces, help you avoid missteps, and create a system that works for you over the long haul.
You don’t need a pension to feel financially secure. You just need a plan designed around the life you actually want to live.
