The Retirement Risk PG&E Employees and Retirees Misunderstand

When I ask the question “what does risk mean to you? I typically get some version of the same exact answer…

“The stock market.”

When the market drops, that’s usually a risk.
When your account swings, that’s generally a risk.
When the headlines turn red, that’s definitely a risk.

If you want to eliminate said risk?

Move to cash. Move to bonds. Move to something “safe.”

That’s how the logic goes. And the logic feels pretty solid.

But it’s missing one key factor.

There isn’t a world where your money is either at risk or safe.

There’s only the question of “which risk you’re taking,” and “when are you taking it?”

When I sit with someone five years out from retirement, or already retired, I often hear “I just don’t want to lose money.”

That totally makes sense. You’ve worked 30 or 40 years. You’ve saved consistently. You didn’t live recklessly. The last thing you want now is to watch it all slowly disappear.

For PG&E employees especially—many of whom have spent decades building a career with a reliable paycheck, pension contributions, and company stock—this instinct makes complete sense. But a pension alone rarely keeps pace with 25 or 30 years of inflation.

The uncomfortable question you have to ask is:

“What if losing money isn’t the biggest threat to your retirement?”

Consequently, what if slowly losing purchasing power is?

Inflation doesn’t feel dramatic. There aren’t any flashing graphics on CNBC.

Typically no trends on social media, either. 

It just quietly does its work.

Three percent inflation doesn’t sound like much. But over a 25- or 30-year retirement, it compounds in a very real way. An impactful, not-so-good way.

Prices don’t inch higher. They multiply.

That grocery bill.
That insurance premium.
That property tax.
That travel budget you planned.

Grow, grow, grow. They all grow.

If your income doesn’t grow with them, something must give.

Most retirees define safety as protecting the number of dollars they have today. But retirement entails preserving wealth over the course of decades.

So the definition of risk gets flipped upside down.

If you need $8,000 a month from your portfolio in year one of retirement, you may need closer to $18,000 or $19,000 a month 30 years from now, assuming modest inflation. That gap is a risk. A huge one, really.

When you move everything into “safe” instruments, money markets, short-term bonds, and CDs, you’re protecting today’s balance. You’re reducing volatility. You’re lowering emotional discomfort.

But you may also be lowering the probability that your income keeps pace with inflation for the rest of your life.

Which puts you beyond market risk into longevity risk.

This is especially common among PG&E retirees who feel secure with a pension in place—but a pension election is just one piece of a complete PG&E retirement plan. Deferred compensation, company stock concentration, and Social Security timing all factor into whether your income actually keeps pace over decades.

The Two Ends of Your Investing Lifetime

Think of your investing life as having two ends.

On one end, today, you can choose stability. You can build a portfolio that barely moves. You’ll get a modest income. You’ll see fewer fluctuations. You’ll sleep well.

You’ll feel secure right now.

But years from now, you may look up and realize your income hasn’t grown the way your expenses have. You’re not broke and you still have assets. But your lifestyle is shrinking.

Resulting in insecurity later.

On the other hand, today, you can choose some volatility. You can own productive businesses through equities. Your account will move. Some years will feel uncomfortable. There will likely be headlines that make you question your decision.

You’ll feel less secure now.

But historically, businesses grow. They raise prices. They increase earnings. They increase dividends. Over long periods, that growth has outpaced inflation.

That’s your tradeoff.

Discomfort now in exchange for greater flexibility and income later.

Or comfort now in exchange for the potential of a shrinking lifestyle later.

Neither option eliminates risk. They’re just options that shift it over time.

Why This Matters More Than Ever

Retirements today aren’t 10-year affairs.

They’re 25. Sometimes 30.

If you retire at 60 and live to 90, that’s three decades of life. Three decades of rising costs. Three decades of healthcare inflation. Three decades of lifestyle decisions. In a couple, there’s a 50% chance that one will live into their 90’s.

For many PG&E employees who retire in their late 50s or early 60s—something the company’s retirement package often makes possible—that time horizon can stretch to 35 years or more. That’s a long time to ask a fixed income stream to hold up.

That time horizon changes the math.

Can your income stream maintain your lifestyle deep into retirement?

When someone tells me, “I want to move everything to something safe,” I don’t push back emotionally. I understand the instinct.

It does beg the question though:

Safe from what? Volatility this year? Or financial pressure at 82?

Because those are not the same thing.

The Silent Risk

Market volatility is loud. It demands attention. Creates urgency.

Inflation is much, much quiet. It shows up gradually.

No one panics over a 3% increase in the cost of living in a single year. But over 20 or 30 years, that steady pressure can do some real damage. You’ll need to increase your income in today's dollars by 2.5 times. Again, $8,000 will need to grow to $19,000 to keep your purchasing power level. 

If your portfolio income stays flat while your expenses climb, you’ll feel it. Not necessarily all at once. But gradually, over time—very likely.

Avoiding short-term discomfort only to experience long-term constraint is often the place people get caught.

Reframing the Conversation

“Which risk do I want to deal with?”

That may actually be a better question than “how do I eliminate risk?”

See, if you eliminate volatility, you’re accepting inflation risk. If you accept volatility, you’re pursuing purchasing power growth.

Neither path is perfect and both require discipline.

The mistake we tend to catch is pretending one of them is risk-free. There’s no such thing as “no risk.”

There’s only the illusion of it. There is uncertainty now or later. 

The Practical Middle Ground

The argument isn’t for 100% stocks or for recklessness.

Thoughtful retirement plans intentionally blend stability and growth. They keep near-term income needs covered with stable assets. They allow long-term dollars to be allocated to productive assets. They rebalance methodically instead of emotionally. Leaving 1 to 2 years in cash flow needs in cash and staying invested can help mitigate risk in a downturn.

Retirement planning isn’t as simple as just maximizing returns. Maintaining independence requires your portfolio to grow. 

For those navigating a PG&E retirement—with pension elections, deferred compensation decisions, and potential stock concentration all on the table—this balance is especially critical. Getting those decisions right requires a plan built around both stability and long-term purchasing power.

The Emotional Reality

After years of working with retirees, here’s what I’ve learned:

The real risk is abandoning a sound strategy because volatility feels scary.

It’s selling low because the news feels bad.

It’s overcorrecting into “safety” at exactly the wrong time.

A well-built plan anticipates volatility. Expects it, even. There’s no panic because of it.

If you’re approaching retirement, or already there, ask:

Are we protecting the number of dollars you have today? Or, are we protecting the lifestyle those dollars need to support for the next 25 years?

If the plan is built around avoiding short-term discomfort, we may be ignoring the longer-term risk that may matter even more.

If the plan balances both forms of risk, volatility, and inflation, we can make decisions calmly instead of reactively.

Once you accept there’s no such thing as no risk, the conversation becomes clearer.

You stop trying to avoid risk altogether.

And you start deciding where it belongs.