There’s been a lot of focus — understandably — on what happens to the pension benefits you’ve already earned. That’s important, and we’ve covered it in detail in our other guides. But there’s a second financial impact of the freeze that gets far less attention, and for many mid-career Intermountain caregivers, it’s actually the bigger number:
What about the pension benefits you would have earned over the next 5, 10, or 15 years if the plan hadn’t frozen?
After December 31, 2026, your pension stops growing. Every additional year of service and every future raise that would have increased your pension benefit — gone from the calculation. For someone with 20 years at Intermountain who planned to work another 12, that’s a meaningful amount of retirement income that simply won’t exist.
Intermountain is replacing the pension with enhanced 401(k) contributions — an automatic 2% employer contribution plus the existing 4% match. That’s real money, and it helps. But whether it fully closes the gap depends on where you are in your career, how much you’ve already saved, and how many earning years you have left.
This article is a planning guide. It’s designed to help you estimate the size of your gap, understand the tools available to close it, and build a strategy that puts you back on track — even if the pension freeze changed the math.
Step 1: Understand the Gap You’re Actually Facing
Before you can close a gap, you need to know how big it is. And the size varies enormously depending on your age and career stage.
Why the Gap Hits Mid-Career Caregivers Hardest
The pension freeze affects everyone with a pension, but the financial impact is not distributed evenly.
If you’re within 2–3 years of retirement, your pension has already accrued most of its value. The freeze clips a small amount of future growth, but the vast majority of your benefit is locked in. Your gap is relatively small.
If you’re within 5–10 years of retirement, the gap is moderate but meaningful. You’re losing several years of accrual during what would have likely been your highest-earning period — the years when pension formulas typically add the most value because they’re based on your final average salary.
If you’re 10–20 years from retirement, the gap is potentially the largest in dollar terms. You had the most years of future accrual ahead of you, and the compounding effect of those lost years is significant. However, you also have the most time to make adjustments — which is the silver lining.
A Simple Way to Think About It
Pension benefits are calculated using a formula that typically involves your years of service, your final average salary, and a multiplier. Without getting into the exact formula (which varies by plan provisions and hire date), the key insight is this: every year of service you lose to the freeze is a year that would have added to both your monthly annuity and your lump-sum value.
If your pension was projected to provide $1,200/month at age 65 had you continued working and earning credits for another 10 years, and the frozen benefit is $845/month, the gap is $355/month — or $4,260/year — for the rest of your life.
Over a 25-year retirement, that’s over $106,000 in lost income (not adjusted for inflation). Over a 30-year retirement, it’s $128,000.
That’s the gap you need to replace. The good news is that you have multiple tools to help do it, and the earlier you start, the less aggressive each one needs to be.
Step 2: Know What Intermountain Is Giving You to Help
The pension freeze doesn’t leave you with nothing. Intermountain announced several changes alongside the freeze that are designed to partially offset the lost accrual.
The New 2% Automatic Employer Contribution
Starting January 1, 2027, Intermountain will contribute 2% of your eligible pay to your 401(k) automatically — regardless of whether you contribute anything yourself. This is separate from the existing 4% employer match on your own contributions.
Previously, this 2% contribution was only available to caregivers hired after April 4, 2020 (who never had a pension). Now it applies to everyone.
Combined, Intermountain can now contribute up to 6% of your pay each year: 2% automatic plus up to 4% match.
What this means in real dollars: If your annual salary is $75,000, the 2% automatic contribution is $1,500/year. Over 10 years, assuming modest investment growth, that’s roughly $18,000–$22,000 in additional retirement savings. It’s meaningful — but on its own, it likely doesn’t replace the full value of 10 years of pension accrual for most caregivers.
The $50,000 Retiree Medical Savings Account (RMSA)
If you’re vested in the pension plan, remain employed at Intermountain through January 1, 2030, and retire at age 63 or older, you’ll receive a $50,000 Intermountain-funded RMSA. This is a tax-advantaged account specifically for medical expenses in retirement, including insurance premiums.
This isn’t retirement income in the traditional sense — you can’t use it for groceries or travel. But healthcare is one of the largest expenses in retirement for many, and $50,000 in tax-advantaged medical savings is a substantial benefit that reduces what you need to cover from your other accounts. In effect, it frees up $50,000 of your other savings to be used for income.
We’ll discuss the RMSA’s impact on your timeline later in this article, because it has planning implications beyond its face value.
What’s Still On You
Between the 2% contribution and the RMSA, Intermountain is providing real help. But the math is clear: for most mid-career caregivers, these new benefits don’t fully replace the lost pension accrual. The remainder is your responsibility to close.
That’s not a criticism — it’s just the reality of the situation. And the earlier you face it, the more options you have.
Step 3: Consider Maximizing Your 401(k)
Your Intermountain 401(k) can be a very effective tool to help close the retirement income gap. The tax advantages, the employer match, and the contribution limits may make it the first lever to pull — and for many caregivers, the only lever they need if they pull it hard enough.
Are You Getting the Full Employer Match?
Before doing anything else, confirm that you’re contributing at least enough to get the full 4% employer match. If you’re contributing less than 4% of your pay, you’re leaving free money on the table. This has always been true, but it’s especially costly now that the pension is no longer growing to compensate.
The match is an immediate 100% return on your contribution. There is no investment in the world that guarantees that. If you’re not maxing the match, we suggest you address this first.
Increasing Your Contribution Rate
The gap-closing math for your 401(k) is straightforward: the more you contribute, the more you accumulate, and the more retirement income it can generate.
But “contribute more” is vague. The right question is: how much more?
Here’s a way to think about it. If your gap is roughly $4,000–$5,000/year in retirement income, and you’re using a 4% withdrawal rate as a guideline, you need an additional $100,000–$125,000 in savings by retirement to generate that income. If you have 10 years until retirement, that means saving an additional $8,000–$10,000/year (assuming ~6% average annual growth). If you have 15 years, it’s more like $5,000–$6,500/year.
These are rough numbers — your financial advisor can refine them with your specific salary, existing balance, and investment assumptions. But they give you a ballpark for what “closing the gap” actually requires in terms of monthly contributions.
For context, in 2026, the standard 401(k) employee contribution limit is $23,500. Many caregivers are contributing far less than that. Moving from a 6% contribution rate to a 12% or 15% rate could close a significant portion of the gap over the remaining years — and the tax deduction on pre-tax contributions softens the impact on your take-home pay.
Catch-Up Contributions: The Biggest Lever for 50+ Caregivers
If you’re 50 or older, the IRS allows additional “catch-up” contributions to your 401(k) beyond the standard limit. For 2026, the standard catch-up contribution is $7,500, bringing your total potential employee contribution to $31,000.
But there’s a newer provision that’s even more powerful. Starting in 2025, caregivers aged 60–63 are eligible for a “super catch-up” contribution of $11,250 instead of the standard $7,500. That brings the total potential employee contribution to $34,750 for those four years.
If you’re in the 60–63 age window, these super catch-up years overlap well with the post-freeze period. Four years of maximized super catch-up contributions at $34,750/year — plus Intermountain’s 6% employer contribution — can add a substantial amount to your 401(k) balance right when you need it most.
Even if you can’t hit the maximum, every additional dollar you contribute during these catch-up-eligible years is working overtime because it has the shortest distance to travel before you need it.
Pre-Tax vs. Roth 401(k) Contributions
Your Intermountain 401(k) likely offers both pre-tax and Roth contribution options. The choice between them matters for gap-closing because it affects how much of your savings you actually get to keep in retirement.
Pre-tax contributions reduce your taxable income now. You pay taxes when you withdraw in retirement. If you expect to be in a lower tax bracket in retirement than you are today, pre-tax is generally more efficient.
Roth contributions don’t reduce your taxable income now, but qualified withdrawals in retirement are completely tax-free*. If you expect your tax rate to be the same or higher in retirement — which is plausible given current federal debt levels and the possibility of future tax increases — Roth contributions can be more valuable long-term.
* Roth distributions are tax-free after age 59-1/2, and the account has been open for at least 5 years
For gap-closing purposes, Roth contributions have an additional advantage: because withdrawals are tax-free, every dollar in a Roth account generates more usable income than a dollar in a pre-tax account. A $500,000 Roth balance produces $20,000/year in tax-free income (at a 4% withdrawal rate). A $500,000 pre-tax balance produces $20,000/year in gross income, but your net after federal and state taxes might be $15,000–$17,000.
This doesn’t mean Roth is always better — the tax deduction on pre-tax contributions is valuable and may allow you to contribute more in total. But if you’re building a gap-closing strategy, understanding the after-tax value of each type of contribution helps you plan more accurately.
Step 4: Explore Savings Vehicles Beyond the 401(k)
If you’ve maximized your 401(k) and match — or if you want to diversify your retirement savings across different tax treatments — several other vehicles can contribute to closing the gap.
Traditional and Roth IRAs
In 2026, you can contribute up to $7,000 to an IRA ($8,000 if you’re 50 or older). Whether you can deduct a traditional IRA contribution depends on your income and the fact that you’re covered by an employer plan. Roth IRA contributions have income limits — for 2026, the ability to contribute phases out for single filers above $150,000 (MAGI) and married filing jointly above $236,000.
If you’re eligible for Roth IRA contributions, it can be a truly beneficial option: tax-free growth potential, tax-free withdrawals in retirement, and no Required Minimum Distributions during your lifetime.
Even if the amounts seem small relative to the gap, $8,000/year in catch-up IRA contributions over 10 years at 6% growth adds roughly $110,000 to your retirement savings. That’s not trivial.
Health Savings Account (HSA)
If you’re enrolled in a high-deductible health plan through Intermountain, you may have access to an HSA. In 2026, the contribution limit is $4,300 for individuals and $8,550 for families, plus an additional $1,000 if you’re 55 or older.
HSAs have a unique triple tax advantage: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. If you can afford to pay current medical expenses out of pocket and let your HSA grow, it effectively becomes a retirement medical account.
This pairs well with the RMSA. The RMSA covers $50,000 in retirement medical costs. An HSA can cover additional medical expenses with the same triple-tax-free treatment. Together, they can significantly reduce the amount you need to draw from your 401(k) or IRA for healthcare — leaving more of those accounts available for income.
Taxable Brokerage Accounts
If you’ve exhausted your tax-advantaged options, a regular brokerage account has no IRS contribution limits and no restrictions on when you can access the money. The trade-off is less favorable tax treatment — you’ll pay capital gains taxes on investment growth. But long-term capital gains rates (0%, 15%, or 20% depending on income) are lower than ordinary income tax rates, and you have complete flexibility on timing.
For caregivers who are maximizing their 401(k) and IRA and still have capacity to save, a taxable account may be a reasonable next step.
Step 5: Optimize Your Social Security Strategy
Social Security is the other major piece of your retirement income puzzle, and how you claim it interacts directly with the pension gap question.
The Basics of Claiming Age
You can claim Social Security as early as age 62, at your full retirement age (67 for most current workers), or as late as age 70. The difference is dramatic:
Claiming at 62 permanently reduces your benefit by approximately 30% compared to your full retirement age benefit. Claiming at 70 increases it by approximately 24% compared to full retirement age. The total swing between claiming at 62 and claiming at 70 is roughly 77%.
How This Relates to the Pension Gap
For many Intermountain caregivers, delaying Social Security is one of the most effective ways to close the retirement income gap — and it costs nothing to implement. You’re not saving more or investing differently. You’re simply waiting, and in exchange, you get a permanently higher guaranteed income for life.
The challenge is that you need income to live on during the delay period. This is where the pension and 401(k) come in. If you can use your pension (annuity or lump-sum distributions) and 401(k) withdrawals to help cover expenses from age 62–70, you allow Social Security to grow to its maximum value. The higher Social Security benefit might then replace or even exceed the lost pension accrual for the rest of your life.
This is a strategy worth modeling carefully with your financial advisor. For some caregivers, delaying Social Security from 62 to 67 — not even to 70 — closes most or all of the pension gap permanently. For others, the math favors claiming earlier. It depends on your health, marital status, other income, and how long you expect to live.
Spousal and Survivor Benefits
If you’re married, Social Security’s spousal and survivor benefits add another layer to the analysis. A surviving spouse can receive up to 100% of the deceased spouse’s benefit if it is higher than their own benefit — which means delaying the higher earner’s Social Security benefit also helps protect the surviving spouse’s income.
When combined with the pension payout decision (especially if you’re choosing between a single life annuity that stops at death and a lump sum that passes to your spouse), the Social Security claiming strategy and the pension payout strategy should be evaluated together. They’re two parts of the same equation.
Step 6: Factor the RMSA Into Your Timeline
The $50,000 Retiree Medical Savings Account deserves its own section in a gap-closing conversation — not because it directly replaces pension income, but because it can reshape your retirement timeline in ways that affect many other calculations.
The Timeline Decision
To qualify for the RMSA, you need to remain at Intermountain through January 1, 2030 and retire at age 63 or older. For some caregivers, this is already their plan. For others, it changes things.
If you were considering retiring at 60 or 61, the RMSA creates a powerful incentive to work two or three more years. Those additional working years don’t just get you the $50,000 RMSA — they also mean two or three more years of 401(k) contributions (with the new 6% employer contribution), two or three more years of investment growth on your existing savings, and two or three fewer years of retirement that your savings need to fund.
The combined impact of these factors is often much larger than the $50,000 RMSA itself. We’ve seen cases where working two additional years to qualify for the RMSA improved a caregiver’s total retirement picture by as much as $150,000 or more when you account for additional savings, reduced withdrawal years, higher Social Security benefits, and the RMSA itself.
The Healthcare Gap It Helps Fill
Healthcare is often one of the largest expenses retirees underestimate.
If you retire before 65, you’ll need to bridge the gap before Medicare eligibility with private insurance or COBRA — both of which can be expensive. The RMSA can help cover some of these costs, extending your other retirement savings.
If you retire after 65, Medicare covers a lot — but not everything. Medicare Part B premiums, supplemental insurance (Medigap), prescription drug coverage (Part D), dental, vision, hearing, and out-of-pocket costs all add up. The RMSA provides a dedicated, tax-advantaged pool to cover these expenses without drawing from your 401(k) or IRA.
Step 7: Put It All Together — Building Your Gap-Closing Plan
The strategies above aren’t meant to be used in isolation. The most effective approach is a coordinated plan that combines several of them based on your specific situation. Here’s a framework for building that plan:
Start With Your Number
Work backwards from what you need. How much monthly income do you want in retirement? Subtract your estimated Social Security benefit and any pension annuity (if you choose monthly payments). The remainder is what your savings need to generate.
A common guideline is that $1 million in retirement savings can generate roughly $40,000–$50,000/year using a 4–5% withdrawal rate. Your target savings amount depends on how large the remainder is.
Then Layer the Strategies—Consider These Options
Layer 1: Get the full employer match. This costs you nothing beyond what you should already be contributing.
Layer 2: Increase your 401(k) contribution rate. Aim for the maximum if you can ($23,500 in 2026, plus catch-up if eligible). Even partial increases help — going from 6% to 10% on a $75,000 salary adds $3,000/year to your savings.
Layer 3: Use catch-up contributions aggressively. If you’re 50+, contribute the additional $7,500. If you’re 60–63, contribute the super catch-up of $11,250. These years matter disproportionately.
Layer 4: Optimize Social Security timing. Model the difference between claiming at 62, 67, and 70. For many caregivers, delaying even a few years closes a large portion of the gap permanently.
Layer 5: Evaluate the RMSA timeline. If staying through 2030 and retiring at 63+ is feasible, the combined benefits (RMSA + additional savings years + reduced withdrawal years) can be transformative.
Layer 6: Add supplemental savings if needed. IRA contributions, HSA maximization, and taxable brokerage accounts can help fill remaining gaps after tax-advantaged accounts are maximized.
Make It Specific
The difference between a good plan and a great plan is specificity. “I’ll save more in my 401(k)” is a good intention. “I’m increasing my contribution from 8% to 14% starting next pay period, switching $3,000/year to Roth, and delaying Social Security from 62 to 67” is a better plan.
Your financial advisor can help you translate the framework above into exact dollar amounts, contribution percentages, and timeline milestones tailored to your salary, savings, age, and retirement goals.
The Urgency Factor: Why Starting Now Matters
Every strategy in this article works better with time. Compounding is powerful, but it needs years to work.
Catch-up contributions are only available for a finite number of years. Social Security delay requires planning ahead to bridge the income gap. And the RMSA has a hard eligibility date that you either hit or miss.
Waiting until fall of 2026 to start planning means fewer pay periods to increase contributions, less time for investment growth opportunity, and more pressure on every decision. Starting now — even before the freeze takes effect — gives you more time to figure everything out sooner.
You don’t need to have everything figured out today. But you do need to start.
How Teton Wealth Group Can Help
We’ve been working with some Intermountain caregivers regarding their retirement planning since the freeze was announced, and the retirement income gap is the topic that generates the longest conversations. It’s where the pension decision connects to everything else — the 401(k), Social Security, taxes, healthcare, and the lifestyle you want in retirement.
Our free IHC Pension Freeze Impact Review includes a Retirement Gap Estimate as one of the three deliverables. We’ll look at your frozen pension value, your 401(k) trajectory with the new employer contributions, and your estimated Social Security benefit — and show you what the gap looks like and what it takes to help close it.
For caregivers who want to go deeper, our Ascent Plan™ is a comprehensive retirement planning process that covers all five pillars: income, investments, taxes, healthcare, and legacy.* It starts at Basecamp — getting clarity on where you are — and builds a written plan that guides you to the summit.
*This is not part of the free review, and is a service to advisory clients.
The Impact Review is a natural starting point. It takes 15–30 minutes, it’s at not-cost, and there’s no obligation.
Schedule Your No-Cost IHC Pension Freeze Impact Review →
Or download our Intermountain Pension Freeze Decision Checklist at creativeo1.sg-host.com/intermountain — Section 5 walks through the gap calculation step by step.
