Author Topic: VA Disability Income and FI  (Read 951 times)

BeachMoney

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VA Disability Income and FI
« on: September 06, 2020, 06:04:21 PM »
Hey Mustachians,

It's an honor and privilege to be posting for the first time here or on any FIRE-related forum for that matter. The wealth of knowledge dedicated to the FI pursuit is astounding and for which I am grateful to you all.

So, if I may, I'd like to ask this group a question: Does having a monthly VA (Veteran Administration) compensation income, of which I receive monthly indefinitely, affect the length of time until I can declare myself financially independent?

Specifically, I am trying to determine if I will get to FI sooner and if the 4% rule still applies given that I receive monthly income for life.

I just completed filling out Mad Fientist's FI spreadsheet (thank Mad Fientist!) which computed the number of years until I reach FI to be 17.08, a withdrawal rate of 3.85% and inflation-adjusted growth of 5%.

I've provided the following financial information for your consideration:
Net Worth: -$32,851 (damn student loans!)
Current monthly income: $4,900 (including $1,131 in tax-free monthly VA compensation)
Savings: $1,200
TSP (traditional IRA): $1,688

Any help is appreciated!

rockstache

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Re: VA Disability Income and FI
« Reply #1 on: September 06, 2020, 06:31:28 PM »
Welcome, and thank you for your service.
IMO that VA disability income absolutely counts towards FI, however I personally wouldn’t count it a sure thing until you reach the 20 year rule. At the 10 year point it’s probably a ‘sure enough’ thing, but it depends on how risk averse you are. I would plug it into CFIRESim in the additional income section and see how it affects your projections.

terran

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Re: VA Disability Income and FI
« Reply #2 on: September 07, 2020, 12:47:24 PM »
I think what spartana is suggesting (and what I would also suggest) is that you subtract your VA income from your expenses and then figure out how much you need as if the remainder were your only expenses. Only do this if it's fairly certain that you will keep your VA income. If not, then personally I would want to save enough so I'd be fine even if I lost that income, so it will speed up your path in that there's more income to save, but not in terms of reducing how much you need to save.