Does a pension count towards your stache?

[schimt]

I was wondering if a future pension gets calculated into your stache in any shape or form and if so, how!?

I see all other retirement accounts being calculated into peoples portfolio when considering FIRE, but don't recall anyone accounting for a pension. Possibly this is because they are less common these days, or because there is no way to access them before society thinks we should retire.

Thanks in advance!

[davisgang90]

Without my military pension I'd be in pretty bad shape FIRE-wise.  I absolutely count it.

[footenote]

Yes, it counts - the only caveat being that you need to research how well funded your pension is.

(See: Illinois http://www.illinoisisbroke.com/
and Detroit http://www.reuters.com/article/2013/10/25/usa-detroit-bankruptcy-idUSL1N0IF0LG20131025 for examples of pension systems that are in trouble.)

Assuming your pension is in great shape, you can model it with cFIREsim.com. Use the Income/Savings/SS/Pension block to input your anticipated pension.

Regarding your timing question, your pension plan details if / when / how you can access the benefits. (If you can't find or figure out your plan documents, ask HR.)

If it turns out you cannot access the benefits early, model the date at which you can start drawing benefits using cFIREsim. Then figure out how big a stache you need to accumulate to fund the gap period between your desired FIRE date and the start of the pension payout.

[rubybeth]

You should be counting it, but there are probably at least a couple of ways to count it:

1) As suggested by other people in this thread; determine what the payout would be, when the earliest your payments can start, and base your FIRE number on that information.

2) If you are able to take your portion of contributions toward your pension and roll them into another account upon separating from your employer, you can count that money toward your overall savings.

If you haven't been with your employer very long and don't plan on working very long (by pension standards), your better option may be to just take your contributions and run. But, if, like me, you are relatively young and already have years of service credits toward your pension, then look at the potential monthly payout upon early retirement. Covering the gap between early retirement and a pension beginning at, for example, age 55, can make early retirement that much more viable.

[1WattLightbulb]

Old thread, but interesting. Yes, it counts. But only part of it can be easily known and that's the employee contribution portion. I have counted the 7-8% that comes out of my paychecks for the pension as part of my savings rate. Actually, both with and without this %.

But I saw that others just subtract the expected retiree pension check from the expected monthly expenses, and do the same for social security. The gap can give an idea whether the stache is sufficient.