FIRE success stories without a pension?

[oldtoyota]

Have you successfully FIRE'd without a pension? On a local message board, most who retire have pensions of $80K a year so that makes their retirement much easier.

I wonder about people who don't have pensions and how they successfully FIRE'd.

What age do they retire?
How much have they saved?
Do they own rental properties to provide cash flow?
Did they start an income-producing business or work a side hustle?
How much do they pay for health insurance?

[Metalcat]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

[Omy]

We retired in 2019 at 56 and 52 - so not super early. In retrospect, we should have retired 5 years earlier...we oversaved by an embarrassing amount.

We retired with two rentals bringing in $4k per month which pretty much covered our expenses. Last year we sold one of the rentals, but our other rental and dividends still cover our expenses.

When that rental goes vacant, we will sell and invest those funds. We should be fine with no pension.

The ACA has been great. Our monthly premiums have averaged under $400/mo since we retired.

[GilesMM]

Are pensions even a thing any more? I thought they were largely replaced by 401Ks years ago.

[MaybeBabyMustache]

I know plenty of FIREd people, and only one person with a pension (my dad, who was a public school teacher). There are very few pensions out there anymore. Everyone else I know saved in a 401k.

[doneby35]

I FIRE’d earlier this year at 38, no pension. There are very few jobs left that offer a pension, mostly government jobs, and I’m not even sure a pension is that big of a deal.
No rental properties and no side hustles, just index funds.
Health insurance is $50 or so, for a married couple, but that depends on your income.

$80k a year pension sounds like a shitload of money, we can barely make it to $40k with about $7k of that spending categorized as just pure wants.

[ixtap]

Are pensions even a thing any more? I thought they were largely replaced by 401Ks years ago.

Our silent generation dads have pensions. FIL's is about $60k; Dad's is a few hundred a month.

I do have a few cousins who retired early with pensions. One got a job in a factory straight out of school and was eligible for his pension at 50. I don't think even that global manufacturer offers pensions anymore. As a matter of fact, I get the impression that his brother, who went to college and into management, and so started a couple of years later, didn't even get a pension.

I know several retired military who draw a pension, but they all pursued lucrative careers while drawing that pension and eventually retired in their 60s.

Sometimes we forget how strong the Calvinistic moralism is in our society. Many consider it a sin to be unemployed, no matter how financially independent you are.

And I don't know what kind of philosophy it is that convinces many people that living on the median income is miserable. We have a single friend who insists that no one can live on our spending. Has said he needs 4x our spending to be comfortable. Funny, there are two of us and we are quite cozy, thank you very much. Of course, we don't lease a new BMW every three years, but his latest is dang uncomfortable, at least in the back seat.

[spartana]

FIREd at 36. Had a small future Gov pension coming to me once I was 50 or older ($900/month). Have lived off investments. No other employment or income generated at all. VA for medical. Paid off house, no debt, no dependants, single and very low expenses. Been doing that many years now and have a higher NW then when I first quit my job.

[Alternatepriorities]

Are pensions even a thing any more? I thought they were largely replaced by 401Ks years ago.

Our silent generation dads have pensions. FIL's is about $60k; Dad's is a few hundred a month.

I do have a few cousins who retired early with pensions. One got a job in a factory straight out of school and was eligible for his pension at 50. I don't think even that global manufacturer offers pensions anymore. As a matter of fact, I get the impression that his brother, who went to college and into management, and so started a couple of years later, didn't even get a pension.

I know several retired military who draw a pension, but they all pursued lucrative careers while drawing that pension and eventually retired in their 60s.

Sometimes we forget how strong the Calvinistic moralism is in our society. Many consider it a sin to be unemployed, no matter how financially independent you are.

And I don't know what kind of philosophy it is that convinces many people that living on the median income is miserable. We have a single friend who insists that no one can live on our spending. Has said he needs 4x our spending to be comfortable. Funny, there are two of us and we are quite cozy, thank you very much. Of course, we don't lease a new BMW every three years, but his latest is dang uncomfortable, at least in the back seat.

I have only on friend my age who isn't military and will get a pension and it's looking more and more like will be hinderance to his early retirement than a help. Why? Because it has very obvious steps for OMY equals more money per month and he and his wife are struggling to let that go. To be fair, she grew up on the soviet side of the wall just before it fell and was very suspicious of investing in the market for a long time... Of my friends who have military pensions of some kind, most are still working. Only the one who was as frugal as me during his 20 year career retired at 40 and he's now actively learning to spend more because his pension would be enough, but he has a stash that would support my early retirement as well. The difference in our our post RE spending is substation for having worked nearly identical length careers at similar pay. The lost of significant earnings during college for me was another part of that though.

I do think we owe some appreciation that moralism/work ethic for creating the wealth and infrastructure we're all enjoying. The idea that one should "earn all you can, save all you can, give all you can" sounds like something from this blog/forum but it's a quote from John Wesley. It seems many non mustachians just stop after the first four words. I, like many here, decided not to earn all I can. I embraced the last two parts with the constraint of not trading all my time on this earth for money...

To the OP question: I FIRE'd at 40 without a pension. DW kept working because she wanted to, we adopted DS, and I've earned a little money doing fun things. We haven't touched the stash. I saw a recent study that claimed the minimum income to "live comfortably" in my state is 3 to 4 times ours. Note that I can't get more accurate than between 3X and 4X because we are so comfortable at our current spending that I don't pay that much of attention. If DW quit tomorrow I'd start paying attention.

[oldtoyota]

We retired in 2019 at 56 and 52 - so not super early. In retrospect, we should have retired 5 years earlier...we oversaved by an embarrassing amount.

We retired with two rentals bringing in $4k per month which pretty much covered our expenses. Last year we sold one of the rentals, but our other rental and dividends still cover our expenses.

When that rental goes vacant, we will sell and invest those funds. We should be fine with no pension.

The ACA has been great. Our monthly premiums have averaged under $400/mo since we retired.

Thanks for sharing this. Good to know what's possible. It's also interesting to see that $4K / month covered your expenses. Our expenses will go down a lot in the next year.

[oldtoyota]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

That's a good point. I consider retiring in the 50s to still be early, yet I realize others may think that is old.

We live in the DC area, and many retired Feds have pensions. Although some claim their pensions are "small" if you talk to them in person, the numbers shared on anonymous message boards are around 80K (unclear if that's for one person or two).

[oldtoyota]

Are pensions even a thing any more? I thought they were largely replaced by 401Ks years ago.

Yes, you can still get them if you work as a US Fed for 30 years or as an employee of certain US states for a certain number of years. It's not easy to earn the pension due to the long work time, yet it's possible. The Fed pensions have been greatly reduced. Gen Z probably won't get much, but those retiring now still have the pensions they were promised long ago.

[Silrossi46]

I will leave full time w2 employment at 55 with a sizeable pension around 108k per year for life that includes medical premium free. Definitely not the norm today at all as others have stated.  (Gov pension not cola’d)

I always worked and saved like I was never getting a pension.  Kept me humble and grounded because I always believed that pensions are never guaranteed until you start collecting them.  Stash will be used to offset inflation increases for non cola’d pension, luxuries, emergencies, and leaving a legacy.

[Villanelle]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

That's a good point. I consider retiring in the 50s to still be early, yet I realize others may think that is old.

We live in the DC area, and many retired Feds have pensions. Although some claim their pensions are "small" if you talk to them in person, the numbers shared on anonymous message boards are around 80K (unclear if that's for one person or two).

Ah, I think this is drastically skewing your view on retirement and pensions.  Of course it seems like everyone who is retired has a pension when you are in a place that has a drastically out-sized number of pension-receivers.  Keep in mind that most of those people got paid less than market averages during their earning years.  That means they saved less, but in trade, they got a pension.  Based on the jobs spouse is looking at right now, he would likely earn about $50k more per year (some jobs $100k more, or even more than that) compared to GS positions that would have a pension.  Those are for more senior, later-career positions, but the point stands.

There's a great deal of selection bias going on, that's making it seem like the only way to retire is to have a pension.  When nearly every early retiree you know has a pension, it can seem like there is causality.   But it's likely caused by the fact that most people you know, in that government-job-heavy location, have pensions, not that most early retirees--in general--have pensions. 

Someone who is disciplined and saves the higher wages from non-government work will likely be at least as well off as someone with lower pay but a pension.

[spartana]

Are pensions even a thing any more? I thought they were largely replaced by 401Ks years ago.

Yes, you can still get them if you work as a US Fed for 30 years or as an employee of certain US states for a certain number of years. It's not easy to earn the pension due to the long work time, yet it's possible. The Fed pensions have been greatly reduced. Gen Z probably won't get much, but those retiring now still have the pensions they were promised long ago.

That varies though. Many Gov agencies, including county and state, still offer pensions and you can be vested after 5 years of work to earn a pension as early as age 50 (earlier in some cases if you have a public safety/LE type of pension) without having to work 30 years. Of course a public pension with more years of work will give you a higher pension but even if you work 10 years, then leave public service you can usually earn a small pension once you are old enough to collect. I worked 10 years at a state agency and bought back 4 additional years of service credit of my military time, and quit my job more then a decade before I was old enough to could collect my ($900/month) pension. I choose to leave it in the pension system and continue earning tax-advantage benefits rather than take it in a lump sum.

The other thing about many Gov pensions is they are in lieu if social security benefits because you've paid into the pension rather than SS. So many (including me) won't get any SS (which is kind d of like a pension I suppose) or will just get a very small amount.

[charis]

Government pensions obviously still exist.  I think the earliest you can get a full pension these days is 55, but more likely 62-63, with 30 years.  I don't consider 55-62 to be FIRE, but others can disagree.  So I'm not sure I view FIRE success = pension.

[Metalcat]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

That's a good point. I consider retiring in the 50s to still be early, yet I realize others may think that is old.

We live in the DC area, and many retired Feds have pensions. Although some claim their pensions are "small" if you talk to them in person, the numbers shared on anonymous message boards are around 80K (unclear if that's for one person or two).

My point isn't about the age, my point is that if someone works a high wage, full time government career until they are eligible for full pension, then by definition they aren't retired "early," they've retired on schedule for their particular profession.

So 80K pensions may be common where you are if you are mostly talking to the higher earners in government who have put in their decades of work, but that's not at all representative of early retirees.

[bacchi]

I know a lot of state college faculty and staff and they all get pensions at 2.0%/year. For most, that means a ~50% pension is available in their mid-to-late 50s (there's some maximum that I don't know). Most keep working, probably because they're paycheck to paycheck and a 50% pay cut is not a livable income. Some are also cash flowing their children's college expenses.

[spartana]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

That's a good point. I consider retiring in the 50s to still be early, yet I realize others may think that is old.

We live in the DC area, and many retired Feds have pensions. Although some claim their pensions are "small" if you talk to them in person, the numbers shared on anonymous message boards are around 80K (unclear if that's for one person or two).

My point isn't about the age, my point is that if someone works a high wage, full time government career until they are eligible for full pension, then by definition they aren't retired "early," they've retired on schedule for their particular profession.

So 80K pensions may be common where you are if you are mostly talking to the higher earners in government who have put in their decades of work, but that's not at all representative of early retirees.

Yeah even if you worked a job that earns a pension after 20 or 30 years of service (be that a public or private job) most have an minimum age limit to begin to collect that pension (barring the military which you can get right after you complete 20 years). So if someone starts working at 18 at a pensioned job and quits at 38 or 48 to retire they still have to wait to get their pension until a certain age - probably 55 at the earliest in most cases. Again with the exception of the military. Lots of us who retired early a decade or 2 before we can start collection pensions will usually have very small pensions (hooker and blow money LOL) and have mostly investments to live off of or have plans to bridge the decades long gap.

Of course I kick myself HARD every time I think about how I threw away a very early pension (at 38) with lifelong affordable medical insurance because I didn't do a full 20 years in the military.

[FireLane]

Have you successfully FIRE'd without a pension? On a local message board, most who retire have pensions of $80K a year so that makes their retirement much easier.

I wonder about people who don't have pensions and how they successfully FIRE'd.

What age do they retire?
How much have they saved?
Do they own rental properties to provide cash flow?
Did they start an income-producing business or work a side hustle?
How much do they pay for health insurance?

I don't know what counts as "success," but I've been FIREd for almost three years with no pension. I retired in summer 2021 at 39, with $2M in liquid assets and a paid-off home. No rental properties, no income-producing business.

To be completely fair, my wife is still working. Her job gives our family health insurance, and her income plus my dividends cover our ordinary expenses. But even when she does quit, I'm anticipating a withdrawal rate of 3% or less, so I'm not too worried.

[oldtoyota]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

That's a good point. I consider retiring in the 50s to still be early, yet I realize others may think that is old.

We live in the DC area, and many retired Feds have pensions. Although some claim their pensions are "small" if you talk to them in person, the numbers shared on anonymous message boards are around 80K (unclear if that's for one person or two).

Ah, I think this is drastically skewing your view on retirement and pensions.  Of course it seems like everyone who is retired has a pension when you are in a place that has a drastically out-sized number of pension-receivers.  Keep in mind that most of those people got paid less than market averages during their earning years.  That means they saved less, but in trade, they got a pension.  Based on the jobs spouse is looking at right now, he would likely earn about $50k more per year (some jobs $100k more, or even more than that) compared to GS positions that would have a pension.  Those are for more senior, later-career positions, but the point stands.

There's a great deal of selection bias going on, that's making it seem like the only way to retire is to have a pension.  When nearly every early retiree you know has a pension, it can seem like there is causality.   But it's likely caused by the fact that most people you know, in that government-job-heavy location, have pensions, not that most early retirees--in general--have pensions. 

Someone who is disciplined and saves the higher wages from non-government work will likely be at least as well off as someone with lower pay but a pension.

You're right about the selection bias. That's one reason I started the thread here--even though at least one person here did mention their pension!--I'm glad to see examples of others who have done okay without one. My family consists of mostly Feds, so I am surrounded by pensioners or future pensioners.

[oldtoyota]

Have you successfully FIRE'd without a pension? On a local message board, most who retire have pensions of $80K a year so that makes their retirement much easier.

I wonder about people who don't have pensions and how they successfully FIRE'd.

What age do they retire?
How much have they saved?
Do they own rental properties to provide cash flow?
Did they start an income-producing business or work a side hustle?
How much do they pay for health insurance?

I don't know what counts as "success," but I've been FIREd for almost three years with no pension. I retired in summer 2021 at 39, with $2M in liquid assets and a paid-off home. No rental properties, no income-producing business.

To be completely fair, my wife is still working. Her job gives our family health insurance, and her income plus my dividends cover our ordinary expenses. But even when she does quit, I'm anticipating a withdrawal rate of 3% or less, so I'm not too worried.

Thank you. Do you have dividends deposited directly into your bank account, or do you move them over?

[FireLane]

I have dividends sent directly to my bank account. I use them as spending money for groceries and other regular expenses.

[Metalcat]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

That's a good point. I consider retiring in the 50s to still be early, yet I realize others may think that is old.

We live in the DC area, and many retired Feds have pensions. Although some claim their pensions are "small" if you talk to them in person, the numbers shared on anonymous message boards are around 80K (unclear if that's for one person or two).

Ah, I think this is drastically skewing your view on retirement and pensions.  Of course it seems like everyone who is retired has a pension when you are in a place that has a drastically out-sized number of pension-receivers.  Keep in mind that most of those people got paid less than market averages during their earning years.  That means they saved less, but in trade, they got a pension.  Based on the jobs spouse is looking at right now, he would likely earn about $50k more per year (some jobs $100k more, or even more than that) compared to GS positions that would have a pension.  Those are for more senior, later-career positions, but the point stands.

There's a great deal of selection bias going on, that's making it seem like the only way to retire is to have a pension.  When nearly every early retiree you know has a pension, it can seem like there is causality.   But it's likely caused by the fact that most people you know, in that government-job-heavy location, have pensions, not that most early retirees--in general--have pensions. 

Someone who is disciplined and saves the higher wages from non-government work will likely be at least as well off as someone with lower pay but a pension.

You're right about the selection bias. That's one reason I started the thread here--even though at least one person here did mention their pension!--I'm glad to see examples of others who have done okay without one. My family consists of mostly Feds, so I am surrounded by pensioners or future pensioners.

Yeah...but pensions have been mentioned mostly to explain how they aren't depended on for FIRE.

As I said above, people who are able to retire on a larger pension are usually folks who don't retire early. My spouse will have a large, federal government pension, but only because he isn't intending to FIRE because he loves his job.

We have federal employees here who have retired very early and therefore do not/cannot depend on their pensions for their retirement because they're too small.

So your selection bias isn't just that people retire with large pensions, but that people don't retire early.

Which, people with high incomes and pensions tend not to retire early, hence why good pensions are referred to as "golden handcuffs."

If you want to see selection bias for what FIRE folks do, stick around, read a bunch of threads, and keep asking questions. You will see a totally different pattern here than you typically do with full length career feds.

Pensions exist here, but they're either very modest, or someone in the household isn't retiring very early.

[2Birds1Stone]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

Depends highly on GEO.

In NY, public sector pensions are typically based on 3 highest income earning years before retirement and replace anywhere from 60-80% of income (including OT!). So a very common thing is a 6-figure pension for teachers, cops, firefighters, railroad employees, etc etc.

Edited to Add: many of these proefessions only require 22-25 years od service!

[2Birds1Stone]

What age do they retire? 36/32
How much have they saved? $1.5M
Do they own rental properties to provide cash flow? No
Did they start an income-producing business or work a side hustle? No
How much do they pay for health insurance? ~$1,200/yr

We're more of an outlier, but these are real figures.

We might earn more money in the future doing something enjoyable, we might not.

Health insurance in the USA is largely income based, so at our income levels it's nearly free (we pay for international insurance since we are out ot the USA half the year).

These days, this would be considered "leanFIRE" but with no kids or expensive taste it's more money than we need.

[oldtoyota]

Thank you all so much! It's good to learn that the "ACA" healthcare is much less expensive than I thought.

[Metalcat]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

Depends highly on GEO.

In NY, public sector pensions are typically based on 3 highest income earning years before retirement and replace anywhere from 60-80% of income (including OT!). So a very common thing is a 6-figure pension for teachers, cops, firefighters, railroad employees, etc etc.

Edited to Add: many of these proefessions only require 22-25 years od service!

???

How does this argue against anything over said???

I said that people can't retire early and get 80K pensions without earning 6 figures and not retiring early. If someone works to their full pension, by definition, they aren't retiring early.

I didn't say it's hard to get an 80K pension, I said it's hard to retire early and get an 80K pension.

[lhamo]

FIREd in 2015 at age 46 with no pension.  Currently age 55 and counting down the 4 years until I can tap retirement savings freely.

Recently divorced.  My share of the stash was roughly 2 mill.

Used $650k of that to buy my new house for cash (mostly money from sale of the marital home).  Will be putting around $100-150k into renovations over the next year or two.  Eventually will also spend more to renovate the kitchen, add solar, and maybe build an ADU for my kids and/or income generation. 

Of the rest, just over 1 mill is in retirement accounts, with a little more in Trad IRA than Roth after equalizing with TheX in the divorce settlement.  The rest is in savings/brokerage and is what I am using to live off of and fund the renovations.

No rental properties.  No side hustle or other income generation.  I MIGHT get some PT work or rent out my newly remodeled primary suite (once it is done) for short periods to generate a little bit of income so that I can renovate my kitchen sooner than later.  But I have to be careful not to mess up my tax/healthcare situation and college financial aid for DD, because....

I pay $0 for healthcare because I deliberately keep my taxable income below Medicaid thresholds.  This also allows my DD to qualify for a full ride at the state flagship university.  2024 is the last year I need to do this for her (assuming she will finish in 4 years -- we do still have over 100k in a 529 for her should she need to pay for all or part of a 5th year).  Once that is not an issue I probably will start alternating between years when I keep the income deliberately low/below Medicaid limits and years when I realize more income and get a low-cost ACA plan.  If I find the costs of the ACA plan years to be reasonable, I might eventually do more of those so that I can convert more Trad IRA funds to Roth sooner rather than later.

Still working out the details of my new budget in the new house, but my basic living costs are probably going to be in the 1500-2k/month range (maybe less) and splurgy stuff another 1-2k, maybe more if I do some of the travel I am hoping to do.  I am not a spendy or acquisitive person.  I got a huge thrill out of finding a nice $12 aerator for my kitchen sink at home depot last week -- it doubles as a sprayer!  Also splurged on some oven mitts for me and DD, another thrill from Homegoods at $16 for two pairs.   

[2Birds1Stone]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

Depends highly on GEO.

In NY, public sector pensions are typically based on 3 highest income earning years before retirement and replace anywhere from 60-80% of income (including OT!). So a very common thing is a 6-figure pension for teachers, cops, firefighters, railroad employees, etc etc.

Edited to Add: many of these proefessions only require 22-25 years od service!

???

How does this argue against anything over said???

I said that people can't retire early and get 80K pensions without earning 6 figures and not retiring early. If someone works to their full pension, by definition, they aren't retiring early.

I didn't say it's hard to get an 80K pension, I said it's hard to retire early and get an 80K pension.

Not everyone here is trying to argue with you ;)

Just a perspective from another part of the continent where $80k+ pensions are very common.

[Metalcat]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

Depends highly on GEO.

In NY, public sector pensions are typically based on 3 highest income earning years before retirement and replace anywhere from 60-80% of income (including OT!). So a very common thing is a 6-figure pension for teachers, cops, firefighters, railroad employees, etc etc.

Edited to Add: many of these proefessions only require 22-25 years od service!

???

How does this argue against anything over said???

I said that people can't retire early and get 80K pensions without earning 6 figures and not retiring early. If someone works to their full pension, by definition, they aren't retiring early.

I didn't say it's hard to get an 80K pension, I said it's hard to retire early and get an 80K pension.

Not everyone here is trying to argue with you ;)

Just a perspective from another part of the continent where $80k+ pensions are very common.

Sure seemed like a disagreement, but thanks for clarifying.

[spartana]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

Depends highly on GEO.

In NY, public sector pensions are typically based on 3 highest income earning years before retirement and replace anywhere from 60-80% of income (including OT!). So a very common thing is a 6-figure pension for teachers, cops, firefighters, railroad employees, etc etc.

Edited to Add: many of these proefessions only require 22-25 years od service!

But like @Metalcat points out, if you are only at your job a relatively short time you might have only earned a small pension. Also if you quit your job early you're likely to have years or even a decades before you can tap into that small pension. Most public pension formulas are based not only on highest 3 years of pay, but on number of years on the job and age you start collecting. There are some early retirees that only get a couple of hundred bucks a month once they are old enough to start collecting pensions and have to not only bridge the huge multi-years gap with investments but are getting that tiny pension in lieu of SS. But yeah, if you do the full ride at your pensioned job and work until you are old enough to collect you can get a pretty hefty pension. Most early retirees (especially very early like you and I) will only be counting on our investments for most or even all our income whether we have future pensions (or future SS) or not.

[Metalcat]

It's actually pretty hard to retire early and have a large pension.
80K pensions are also pretty rare from what I've seen. I'm curious where you live that they're common.

I live in the capital of Canada where an enormous amount of folks have very good pensions and they would have to work until 60 and make about 135K to get 80K in pension, which is mostly just senior staff.

Depends highly on GEO.

In NY, public sector pensions are typically based on 3 highest income earning years before retirement and replace anywhere from 60-80% of income (including OT!). So a very common thing is a 6-figure pension for teachers, cops, firefighters, railroad employees, etc etc.

Edited to Add: many of these proefessions only require 22-25 years od service!

But like @Metalcat points out, if you are only at your job a relatively short time you might have only earned a small pension. Also if you quit your job early you're likely to have years or even a decades before you can tap into that small pension. Most public pension formulas are based not only on highest 3 years of pay, but on number of years on the job and age you start collecting. There are some early retirees that only get a couple of hundred bucks a month once they are old enough to start collecting pensions and have to not only bridge the huge multi-years gap with investments but are getting that tiny pension in lieu of SS. But yeah, if you do the full ride at your pensioned job and work until you are old enough to collect you can get a pretty hefty pension. Most early retirees (especially very early like you and I) will only be counting on our investments for most or even all our income whether we have future pensions (or future SS) or not.

Right? That's exactly my point. If you work until your full pension and your pension can fully fund your retirement, you are not retiring early. By definition, you worked until full retirement age because that age is determined by your pension plan.

And you have to earn way more than the median income in order to end up with a pension that's way more than the median income.

I'm not surprised that someone folks know a lot of people with substantial pensions. Most of the folks DH knows are federal employees with hefty pensions. But almost NONE of them retire before hitting their "golden number."

My DH intends to "retire" 5 years before he hits his "golden number" but that's only because his union allows him 5 years unpaid leave because I'm disabled, but we can still buy into his pension for those years. So yeah, he has to wait to actually take his full pension.

If he were to take his pension 5 years early, he would lose close to 50% of the value compared to hitting that "golden number."

I'm not a pension expert, but I was under the impression that if pensions allow early withdrawals, they usually tend to come with massive reductions in value.

So very few people could fully fund an early retirement with just a pension unless they were a very high earner with very low expenses. But if that were the case, they would also have a ton of savings anyway from all those high earning years they didn't spend...probably enough to outweigh the reduced pension, actually.

[Silrossi46]

Wow 50% loss of pension  for 5 years early is a big number.  I can’t say I have ever heard that.  We lose 3% per year for every year under the age of 55.  Essentially 1/4 % per month.

[Laura33]

Just about everyone in the US has a pension.  It's just called Social Security.

Also, FWIW, for many of those feds, the pension is instead of SS. 

We haven't FIRE'd, but we did hit FI several years ago, and we did it without considering any pensions or SS.  IMO, those things are basically there as longevity insurance in case I outlive my 'stache; they have nothing whatsoever to do with when we became FI, because we couldn't access them for a number of years at that point anyway (plus I really wasn't convinced DH's pension wasn't going to go the way of the dodo before he could ever claim it).

[Metalcat]

Wow 50% loss of pension  for 5 years early is a big number.  I can’t say I have ever heard that.  We lose 3% per year for every year under the age of 55.  Essentially 1/4 % per month.

That's if you take it early. You can retire early and take a deferred annuity and the reductions are much smaller. But if you retire early and take an immediate annuity, you get slammed with reductions.

[Silrossi46]

Right.  I understand.  This pension system is 25 years minimum then you can retire at any age but if not 55 the 3 % per year penalty is in play.  So example if you start at 20 you can leave at 45 with a 30% penalty.  You can in fact start collecting the reduced amount at 45 which is nice.  I have heard others quoting that you need to wait till full retirement age to start collecting.

[Metalcat]

Right.  I understand.  This pension system is 25 years minimum then you can retire at any age but if not 55 the 3 % per year penalty is in play.  So example if you start at 20 you can leave at 45 with a 30% penalty.  You can in fact start collecting the reduced amount at 45 which is nice.  I have heard others quoting that you need to wait till full retirement age to start collecting.

Yeah, pension systems vary quite wildly. We've had a few pension discussions here where I've learned a lot about other pension systems and how different they can be from the federal pension system here.

[Alternatepriorities]

Right.  I understand.  This pension system is 25 years minimum then you can retire at any age but if not 55 the 3 % per year penalty is in play.  So example if you start at 20 you can leave at 45 with a 30% penalty.  You can in fact start collecting the reduced amount at 45 which is nice.  I have heard others quoting that you need to wait till full retirement age to start collecting.

I know people with other benefits that are calculated like that. One case is several friends who work for the same airline. If you work their for10 years AND leave after age 55 you get flight benefits for life. This is a bum deal for the guy who started with them as a mechanic at 24 and has been there 10 years now but wants to change careers and become a pilot. It's a great deal for the flight attendant who did other things with her life until 45 and then started working for them... Pensions and pension like benefits are designed to incentivize normal people to stay at one place for a long time. Like most things that are optimized for "normal", if you time right you can really maximize your benefit. However, if you don't pay attention it's easy to miss out all together.

[Dave1442397]

My neighbor had three pensions (or maybe they all combine to one? I don't know how gov't works). He spent time in the Navy, the FBI, and Homeland Security.

My father has a pension (not in the US), but when his company was bought out a few years after he retired, the new owners found a loophole that let them reduce the monthly amount by quite a bit. The retired employees brought a lawsuit and got some of it back, but not all. I don't know the details, but it certainly gave me a distrust of pensions in general. I'm happy to have my money in a 401(k).

If my wife and I took Social Security at age 67, we'd get $81,420 per year, using recent estimates.  Using the 4% rule, that's like having an extra $2 million invested. Not bad!

[charis]

If my wife and I took Social Security at age 67, we'd get $81,420 per year, using recent estimates.  Using the 4% rule, that's like having an extra $2 million invested. Not bad!

Did you retire early?

[spartana]

If my wife and I took Social Security at age 67, we'd get $81,420 per year, using recent estimates.  Using the 4% rule, that's like having an extra $2 million invested. Not bad!

Did you retire early?

I think people forget that when you retire early you are no longer putting money into SS and your benefit is likely to be reduced - often dramaticly. I have nothing but zeros in my SS earnings statement from age 30 on after I no longer worked a job that paid into SS and also retired early. (30s). My benefit will be very low (around $600/month) and then cut further by the WEP (Windfall Elimination Provision) because of a pension.

[Dave1442397]

If my wife and I took Social Security at age 67, we'd get $81,420 per year, using recent estimates.  Using the 4% rule, that's like having an extra $2 million invested. Not bad!

Did you retire early?

No, we're still working, but even if we retired now it wouldn't have much effect on our SS payments. My wife will probably retire and take SS at 65, and I'll probably retire soon after but wait until 70 to claim SS. That would give us combined SS payments of $82k per year. I'll run all the numbers with a financial planner in a few years once our daughter is done with college. Those $3200 monthly payments tend to skew the numbers a bit!

[charis]

If my wife and I took Social Security at age 67, we'd get $81,420 per year, using recent estimates.  Using the 4% rule, that's like having an extra $2 million invested. Not bad!

Did you retire early?

No, we're still working, but even if we retired now it wouldn't have much effect on our SS payments. My wife will probably retire and take SS at 65, and I'll probably retire soon after but wait until 70 to claim SS. That would give us combined SS payments of $82k per year. I'll run all the numbers with a financial planner in a few years once our daughter is done with college. Those $3200 monthly payments tend to skew the numbers a bit!

That’s interesting, when I run the SS calculator to account for early retirement, our projected SS payout takes quite a hit.

[flyingaway]

One cannot claim to be a success story before die. Anything could happen.
However, we retired in our late 50s without any pension. Most of our friends are still working in their 60s, not by needs, but by choices. They might have enough money, but they don't believe that, or do not know about it. Some people think that making money without working too hard is a good deal. So why retire if you don't have to. I surprised many of my friends to retire in my 50s, they thought that I am making money by trading stocks, while they choose to work on safe  and easy job. (We are tenured professors so job security is not a problem as long as you want to do it).

[oldtoyota]

If my wife and I took Social Security at age 67, we'd get $81,420 per year, using recent estimates.  Using the 4% rule, that's like having an extra $2 million invested. Not bad!

Did you retire early?

No, we're still working, but even if we retired now it wouldn't have much effect on our SS payments. My wife will probably retire and take SS at 65, and I'll probably retire soon after but wait until 70 to claim SS. That would give us combined SS payments of $82k per year. I'll run all the numbers with a financial planner in a few years once our daughter is done with college. Those $3200 monthly payments tend to skew the numbers a bit!

That’s interesting, when I run the SS calculator to account for early retirement, our projected SS payout takes quite a hit.

This was helpful for me to see. From the SSA website:

“ If You Stop Work Before You Start Receiving Benefits

If you stop work before you start receiving benefits and you have less than 35 years of earnings, your benefit amount is affected. We use a zero for each year without earnings when we calculate the amount of retirement benefits you are due. Years with no earnings reduces your retirement benefit amount.

Even if you have 35 years of earnings when you stopped working, some of those years may be low-earning years. When you file for retirement benefits, those years are averaged into your calculation, creating a lower benefit. However, if you had continued to work, your low earning years are replaced with your high earning years. Higher earnings increase your benefit amount.”

[2Birds1Stone]

The hit to your SS payments will be *mostly* determined by where you are with regards to the 1st and 2nd bend points in the PIA formulas.

Many higher earners (as is common around here) will be well past the 1st bend point by the time they have their 40 SS credits.

Edit to add: https://www.ssa.gov/oact/cola/piaformula.html

[secondcor521]

Have you successfully FIRE'd without a pension? On a local message board, most who retire have pensions of $80K a year so that makes their retirement much easier.

I wonder about people who don't have pensions and how they successfully FIRE'd.

What age do they retire?
How much have they saved?
Do they own rental properties to provide cash flow?
Did they start an income-producing business or work a side hustle?
How much do they pay for health insurance?

FIREd at age 46 about 8 years ago without a pension.
I don't talk specific numbers on assets or income, but I saved 50x my FIRE expenses, mostly in my 401(k).
No rental property, but I live in a paid for home if you want to count that.  Cash flow is provided by selling investments.
I do piggybacking (see thread on this board) which covers about 2 months of my expenses each year.
I pay $125 (net) a month for an ACA Bronze HSA plan for just myself.

[Dave1442397]

If my wife and I took Social Security at age 67, we'd get $81,420 per year, using recent estimates.  Using the 4% rule, that's like having an extra $2 million invested. Not bad!

Did you retire early?

No, we're still working, but even if we retired now it wouldn't have much effect on our SS payments. My wife will probably retire and take SS at 65, and I'll probably retire soon after but wait until 70 to claim SS. That would give us combined SS payments of $82k per year. I'll run all the numbers with a financial planner in a few years once our daughter is done with college. Those $3200 monthly payments tend to skew the numbers a bit!

That’s interesting, when I run the SS calculator to account for early retirement, our projected SS payout takes quite a hit.

Yeah, I ran our numbers through the calculator too. We both have 35 years of good income, and we're past the bend points, so the difference in benefits was minimal - I forget how much, but I remember being glad it was something I didn't need to worry about.

[johndoe]

I know a lot of state college faculty and staff and they all get pensions at 2.0%/year.

Out of curiosity, do these have minimum career durations? The system I'm in has around 2% per year too, but to be eligible you must work many years (so I don't think 'retiring early' is really an option - as someone else mentioned there are steep penalties for leaving 'early').  A plan without 'minimum duration' would seem awesome for FIRE folks who live on a fraction of their income their whole careers!