Pension-Aware Allocation Modeler
Compare a generic allocation to one built around your pension — and see what the difference is worth over time.
Step 1 — Pension Foundation
Your projected annual pension benefit at retirement
Combined pre-tax and after-tax investment accounts
Used to project portfolio growth before retirement
Pension bond-equivalent (at 5%): $1,080,000
Your pension provides the equivalent of a $1,080,000 bond. Your portfolio's job is to complement it — not duplicate it.
Your pension provides the equivalent of a $1,080,000 bond. Your portfolio's job is to complement it — not duplicate it.
Step 2 — Current vs. Pension-Aware Allocation
What Most Advisors Build
Generic 60/40
Equity60%
Bonds40%
Return assumption5.5%/yr
Blended fee (typical 403b + advisor)
0.85%/yr
Net return: 4.65%/yr
Pension-Aware Approach
Pension-Aware 80/20
Equity80%
Bonds20%
Return assumption7.0%/yr
Pension-aware model blended ER
0.32%/yr
Net return: 6.68%/yr
| Component | Allocation | Role |
|---|---|---|
| Broad market equity | 80% | Evidence-based, factor-tilted |
| Trend-following strategy | 10% | Crisis protection / drawdown buffer |
| Gold / inflation hedge | 2.5% | Inflation + volatility hedge |
| Broad commodities | 7.5% | Direct inflation linkage |
| Blended ER | 0.32%/yr | |
Advanced settings — override assumptions
Range: 70%–95%. Adjusts the model's equity weight.
Note: The pension-aware allocation model blended expense ratio is fixed at 0.32%/yr and is not overridable. This figure reflects the estimated weighted average ER of the model components and is the fee used throughout this illustration.
Important disclosures: Projections shown are for illustrative purposes only and do not represent actual or guaranteed results. Return assumptions (7.0% pension-aware, 5.5% generic) are based on long-term historical averages and do not predict future performance. Past performance does not guarantee future results. The pension-aware allocation model is described for educational purposes — it does not constitute a specific investment recommendation. Portfolio composition, fund selection, and specific securities are determined on an individual basis. Asset allocation decisions should be made with a qualified financial advisor based on your individual circumstances, risk tolerance, and time horizon. Fee estimates are illustrative — your actual costs will vary. Teachers' Path Financial Planning — Nathaniel Carswell, CFP®, CIMA®.
Portfolio Differential
—
20-year advantage
Generic 20-yr Value
—
60/40 at 4.65% net
Pension-Aware 20-yr Value
—
80/20 at 6.68% net
Fee Savings (20 yrs)
—
Compounded cost drag
20-Year Portfolio Growth
Year-by-Year Comparison
Showing milestone years (1, 5, 10, 15, 20)
| Year | Generic Value | Pension-Aware Value | Difference |
|---|
Pension-aware allocation is one of the most important — and most overlooked — decisions a teacher can make. Visit teacherspath.net to see what this looks like with your actual numbers.
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