FIRE date with future pension? (Spreadsheets - Yay!)

[hadabeardonce]

I could use some help with my FIRE date estimate. I've looked at other threads, but my pension numbers are throwing me off and I have questions. It's all laid out in a spreadsheet. (see FI Retirement Calculator.xlsx attached)

With my current annual contribution and a 5% return rate I could quit my job by 2030. Withdrawing 4% would provide $61,573/yr(I'm aiming to accommodate for $60/yr in expenses)... so I'd be 48 years old. At 50 I could collect an additional 22k/yr from my pension or at 55 I could collect an additional 41k/yr. Those pension numbers would push me way beyond what I'm thinking is enough.

Is it ok to withdraw more than 4% from retirement accounts if I have pension money waiting for me after age 50? I'm trying to find the FIRE date sweet spot. 2027-2030 certainly looks doable, but I don't want to work any longer than I have to :P

I appreciate any help/advice/tips/experiences offered.

[Rhoon]

tldr: Should be OK, but double check your numbers. I like your spreadsheet BTW.

I used my own formulas to recalculate your final stash values by 2027 and 2030, just to see if the numbers match. They were close, but not exact (difference of ~$2K on the 4% rule).

2027
Stash: $1,050,584.56
4%: $42,023.38

2030
Stash: $1,475,201.67
4%: $59,008.07

Formula: =FV(6%/12, DATEDIF(NOW(),"1/1/2027","M"), -66500/12, -$A$8)


I also ran this through cFIRESIM with the following changes from default:

- Retirement year: 2027, lasting through 2067 (roughly 85)
- Starting Portfolio: $145,198.58
- Portfolio make up: all default, 75/25, fee drags and everything default
- Social Security: $20K/yr, starting in 2054
- Pension: $22K/yr, starting in 2032
- Savings: $66500/yr, starting in 2017, ending in 2027

I investigated the max initial withdraws for  95% success and it come out to $60K/yr.

The listed final stash at retirement came out to $1.2M

[hadabeardonce]

tldr: Should be OK, but double check your numbers. I like your spreadsheet BTW.

Thanks for double checking the numbers. I'll have to mess with the formula you posted and start playing with NPER in excel. I'm hopeful that my wife and I will be able to reduce out expenses going forward. Lower retirement expenses would certainly make a big difference with our FIRE date.

So you wouldn't increase your withdrawal % in anticipation of receiving pension money later?

The other thing I could do with my pension money is roll it into a 457 account, but that doesn't seem as advantageous.

(just noticed I misspelled withdrawal all over my most recent spreadsheet)

[Rhoon]

So you wouldn't increase your withdrawal % in anticipation of receiving pension money later?

When I ran the cFIRESIM I think it accounted for your pension. I re-ran the simulation by adding a 22K/yr "Extra spending" from 2027 to 2032 (From retirement till when the pension starts) and it dropped your max initial withdrawal to $54K. If I removed that $22k/yr, it went back up to $60K.

I didn't program that simulator, so I can't account for the code behind it, but it seems like it's accounting for your pension and SS in your max initial spending.

So for years 2027 -> 2031, you could withdraw $60K, then when 2032 hits and your pension kicks in, you'd drop to withdrawing $38K and the $22K pension would make up the difference.

If I adjust your retirement date to 2030, then max initial spending is $80K/yr.

It should be noted that this is probably not accounting for taxes and the like.

[PhilB]

I'm in a similar situation with pensions kicking in between 10 and 14 years after planned FIRE date.  A much simpler way to do the calculations in this situation is to simply split your pot at retirement into a bridging pot that takes the place of the pension in the gap and then the remainder is a drawdown pot from which you plan to take your 4% or whatever for life.
Running your numbers  (if I have understood them correctly) of $146,000 starting point and $66,500 a year savings and assuming a 4% real return on investments and $40k pa pension from 2037 that would give nearly $1.2M in today's money by 2030 of which 7x $40k = $280k would be spent filling in for the pension.  The remainder would give about $35k pa at 4% so a $75k pa sustainable income from retirement.
On that model the earliest I have you being able to go is 2027 and still have $60k pa.
Note all these calculations are pre-tax as I have no idea how taxes work for retirees in the US!

[Poeirenta]

PTF

[Retire-Canada]

Withdrawing 4% would provide $61,573/yr(I'm aiming to accommodate for $60/yr in expenses)... so I'd be 48 years old.

I just wanted to confirm your numbers above factored in income taxes if you'll need to pay them.