Maximizing Your PG&E Benefits Before Retirement

(What You Don’t Want to Overlook Before the Clock Runs Out)

Congratulations if you are getting close to retirement and have spent your career at PG&E. You have earned more than a paycheck, you earned access to one of corporate America’s most valuable retirement benefits packages. However, while these packages are generous, they are not simple. They involve a network of rules, options, and deadlines that can be overwhelming without the right guidance.

Whether you have worn a hard hat or worked behind a desk, PG&E employee benefits are complex. How you use them in the final years before retirement can make a huge difference in how comfortable your retirement feels. This guide will help you understand what is available and how to make the most of it.

The PG&E Retirement Benefits System: A Quick Overview

PG&E offers three main types of retirement income benefits:

• Pension (Final Pay Pension or Cash Balance Pension)
  
  
• 401(k) (called the Retirement Savings Plan)
  
  
• Retiree medical, life insurance, and other benefits
  
  

Each works differently depending on whether you are a union member or part of management. Regardless of your group, understanding your PG&E benefits and how they all work together is key to a smooth transition into retirement.

Pension: Your Monthly Paycheck for Life

If you qualify, your PG&E pension can provide a stable monthly income for life. There are two types:

Final Pay Pension – This traditional pension calculates your monthly benefit based on your years of service and either your final monthly pay (for union employees) or your average pay over your last 36 months (for management). The longer your service and the higher your earnings in those final years, the greater your benefit.

If you retire early, your pension could be reduced by as much as 26 percent at age 55 compared to waiting until age 65. This significant reduction should be considered before making any decisions.

Cash Balance Pension – If you started with PG&E after January 1, 2013, or switched plans, you likely have the Cash Balance Pension. This plan works like a savings account with annual contributions and interest credits from PG&E. The balance grows yearly based on your age and service and can be taken as a lump sum or a monthly check when you retire.

Do not guess. Use the PG&E Pension Center to run official pension estimates for different retirement dates, or work with a financial advisor such as Powering Your Retirement, who understands the system.

401(k) (Retirement Savings Plan): Your Personal Investment Account

The PG&E Retirement Savings Plan is like your own retirement bucket. You decide how much to put in and how to invest it. PG&E matches some of your contributions, which is free money for your future.

If you are over 50, take advantage of catch-up contributions, which let you save beyond the standard annual limits. Every extra dollar invested now helps reduce financial pressure later. PG&E also recently introduced the Super Catch-up, which increases the regular catch-up amount by 50 percent for employees ages 60 to 63, giving you an additional opportunity to strengthen your retirement savings in your final working years.

Review the following:

• Are your investments aligned with your age and goals?
  
  
• Do you have too much risk, or not enough?
  
  
• Have you coordinated your 401(k) withdrawals with your pension and Social Security?
  
  

Minor adjustments now can mean thousands more later.

Retiree Medical Savings Account (RMSA): Paying for Healthcare in Retirement

Healthcare is one of the largest expenses in retirement, and PG&E helps with that if you qualify.

If you retire after age 55 with enough service, you may receive credits into a special account called an RMSA. This account helps pay for PG&E-sponsored medical coverage in retirement. You cannot use it for other expenses, and the rules are strict:

• You cannot contribute to the account yourself.
  
  
• Your spouse or partner may get their own account, but it ends if you divorce.
  
  
• The account earns interest and can be used until it runs out.
  
  
• Once it is gone, it is gone. There are no refills.
  
  
• If you are married to another PG&E employee, you only get your own RMSA account and cannot use your spouse’s account as well.
  
  

It is important to know how much is in the account and how long it might last based on your healthcare needs and plan choices.

Post-Retirement Life Insurance: A Final Gift for Your Loved Ones

If you officially retire with at least 10 or 15 years of service, depending on your job group, PG&E may automatically provide a company-paid life insurance policy.

• Union employees: Standard post-retirement life benefit is $8,000.
  
  
• Management: Benefit can be up to your full final salary, capped at $50,000, depending on your hire date and service time.
  
  

This is not a substitute for personal life insurance, but it is something. Do not forget it exists, and check if it affects your taxes.

Social Security: The Overlooked Puzzle Piece

Many PG&E employees focus so much on their company benefits that they forget Social Security. However, deciding when to take it and how it fits with your pension and 401(k) can have a major impact.

For example, delaying Social Security until age 70 can increase your monthly benefit by about 8 percent for each year after full retirement age, which is typically 66 or 67 depending on your birth year. This strategy can be especially effective if your PG&E pension already provides steady income in your early retirement years.

Think of it as a three-legged stool: pension, 401(k), and Social Security. All three must work together for a stable retirement.

Timing Is Everything (And the Clock Is Ticking)

Whether you are deciding when to retire, how to take your pension, or what to do with your investments, planning ahead matters.

Here is what successful PG&E employees do in their final years before retiring:

• Get official estimates of your pension for multiple dates.
  
  
• Review your 401(k) contribution level and investment mix.
  
  
• Check your RMSA value and understand what plans it covers.
  
  
• Review life insurance options and update your beneficiary.
  
  
• Make sure your health coverage elections align with your retirement timing.
  
  
• Talk to a financial planner who understands PG&E’s retirement benefits.
  
  

A Real-Life Example

Two employees both retire at age 60 after 30 years at PG&E.

• Employee A files their pension immediately, takes Social Security at 62, and keeps their 401(k) in a basic money market fund.
  
  
• Employee B works one more year, delays pension and Social Security, updates their 401(k) to match their time horizon, and uses their RMSA to pay for retiree health coverage.
  
  

That one-year difference could mean tens of thousands more over the course of retirement.

The Bottom Line

PG&E retirement benefits are powerful, but only if you know how to use them.

You have worked hard to earn these benefits, and now it is time to put them to work for you. Retirement should not be treated as just another item on a checklist. It is the beginning of a major new chapter in your life.

Get educated. Get organized. Get help.

Most of all, do not wait until your last day to start planning. With PG&E employee benefits, the sooner you plan, the more choices you have.

Helpful Tip: Visit mypgebenefits.com and log into the PG&E Pension Center to run personalized estimates and check your RMSA balance. Or call Dan at Powering Your Retirement. You only retire once, and we have helped many PG&E employees retire with confidence.

PG&E Retirement Readiness Checklist

📆 Pension Planning
☐ Run pension estimates for at least three different retirement dates
☐ Determine whether you are in the Final Pay or Cash Balance Pension
☐ Choose your pension payment option (single life, joint survivor, etc.)
☐ Confirm years of service and final pay or average pay used in the calculation

💰 Retirement Savings Plan (401k)
☐ Maximize your contributions, including catch-up if over age 50
☐ Review and adjust your investment mix based on your retirement timeline (consider BrokerageLink)
☐ Coordinate your withdrawal strategy with pension and Social Security

🏥 Healthcare + RMSA
☐ Confirm if you qualify for a Retiree Medical Savings Account (RMSA)
☐ Know your RMSA balance and how long it is expected to last
☐ Understand your PG&E retiree healthcare coverage options and premiums

🧾 Social Security
☐ Review your Social Security statement and full retirement age
☐ Explore how delaying benefits affects your monthly income
☐ Coordinate timing with PG&E benefits for tax efficiency and income smoothing

🛡️ Post-Retirement Life Insurance
☐ Check if you qualify for company-paid life insurance
☐ Confirm the benefit amount and how it fits with your personal coverage
☐ Review and update beneficiary designations

👥 Professional Support
☐ Meet with a representative from Powering Your Retirement, who specializes in PG&E retirement benefits
☐ Create a retirement income plan that includes all income sources
☐ Review healthcare, estate planning, and tax strategies before retiring