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How should my pension affect my retirement planning?

Your pension should be just one tool in your retirement shed. Chances are, most pensions will not produce enough income to fully cover all your retirement needs, so you should be saving in other accounts as well.

Some employers that offer traditional pensions also offer defined contribution plans, such as 401(k)s and 457 plans, which allow you to sock away more for retirement by setting aside some of your paycheck in a special tax-deferred investment account. If so, consider yourself lucky and sign up - especially if your boss agrees to throw in a matching contribution.

And if you are eligible for a Roth IRA, that is often an unbeatable way to save for retirement. In 2010, individuals with modified adjusted gross income (MAGI) below $105,000 and couples filing a joint tax return with MAGI under $167,000 can make a full $5,000 contribution to a Roth IRA; if you're over 50, you can add another $1,000 to boost your annual contribution limit to $6,000.

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