Author Topic: How to figure FI with pension and SS  (Read 819 times)

M

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How to figure FI with pension and SS
« on: March 01, 2020, 06:10:22 PM »
Hello! Iíve studied this blog/archives along with many others and canít seem to find if it is appropriate (and if so how) to account for expected pension (and to a lesser extent SS) that will start years after ER? If I just use the 4% rule then Iím not quite there (especially when I boost expenses to add a buffer). But Iíve created a year by year spreadsheet and once pension and SS kicks in, I donít need to spend retirement savings near as much, thereby showing Iíll die with too much money. Or is pension and SS not included due to the unknowns of whether theyíll actually happen (mine would be from a federal job so who knows what Congress will do to change the deferred retirement rules). Thanks ahead of time for any ideas!

gocurrycracker

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Re: How to figure FI with pension and SS
« Reply #1 on: March 01, 2020, 08:58:19 PM »
I think of it in stages, as you are doing. $x to get you to age 59.5, $y to get you to 65+/- for SS, etc...

When SS (or pension) are 30 years away, you need a full 25 - 30 years' worth of expenses to get you to that first benefit check. The current value is therefore close to zero but will increase the amount you can leave to your heirs (value can be significant.)
https://www.gocurrycracker.com/spending-future-social-security-income-now/

When the time is less, then you could save less.

You can model this in a tool like cFIREsim, adding a pension, SS, 1-time expenses, 1-time income (e.g. inheritance), etc....