How much uncertainty is factored into your calculations (and whats the plan B)?

[Cap_Scarlet]

We've read a lot about the 4% rule and monte carlo simulations but how much uncertainty are you allowing for in your calculations?

I'll give you may example.  We have a works pension scheme that is very generous for people at my level, basically once your pension is (was) fully vested once you had 10 years at a certain level of seniority and 10 years of service.  That pension is worth in today's money about $50,000 per year and is the fundamental foundation of my future income expectations.

Over the last few years we've seen two changes to the scheme, in a first step the "10 year rule" was removed meaning people only qualified for the scheme in proportion to the number of year served.  In a second step (one year later) the scheme was closed to new members altogether.

So my concern is that once in retirement, irrespective of any contractual obligations they might suddenly remove the scheme even for retirees.  I guess volatility in the global economy is a big concern - if the scheme can't pay, it can't pay.

How worried should we be and what's your buffer?

[arebelspy]

Typically those changes are made for new hires, not people already in the system. Is that not the case for you?

I have about five main backup plans, plans B - F or so, for various scenarios. Planning and flexibility are always key.

[Monkey Uncle]

1) Shooting for beyond 95% success rate in cFiresim.  That alone should be a huge safety factor.
2) Planning for annual retirement spending that is about $5k more than current after-tax spending.  This should allow for the occasional vacation, car replacement, medical event, or other unexpected expense.
3) Not factoring in an inheritance that I'm likely to receive at some point.  I have no idea on the amount or timing, so I figure it's best to just ignore it.

Other than that, I'm being pretty aggressive compared to most folks.  I'm counting on SS and a small pension, even though a lot can happen in the 15 or so years until I'm eligible to draw on those.  I'm assuming the ACA will allow me to get health insurance roughly equivalent to my current employer-subsidized plan.  I'm factoring in the fact that my house will be paid off in 12 years, and spending will drop accordingly.

Plan B: part-time or consulting work if projected success rate drops below 80-85%.