I have a government pension and will be eligible for social security benefits. I ran the retirement estimates from both websites. I assumed I quite working today and made 0 income from this point on.
I had to discount the pension amount for inflation because it would be based on current year salary, which would not be adjusted between now and when I start collecting it. However, the pension does get COLAs once it begins.
My understanding is Social Security is all indexed, so discounting it like above is not needed.
Coincidentally, the combined benefit is right around my current spending. Theoretically, if my stash gets me to age 62, I'm ok after that point.
Would this change your plan or your SWR? How do you view the risk of pensions or ss benefits being cut?
Considering Pensions and Social Security
byu/surf_drunk_monk infinancialindependence
Posted by surf_drunk_monk
3 Comments
Yes. This is a situation where a detailed planner like ProjectionLab or Boldin can help.
For virtually guaranteed pensions (like FERs), there is no reason to pretend like it doesn’t exist once you are vested. A pension can and should impact your SWR.
Yes, sounds right. I use ProjectionLab for these calcs. I really like that tool! (I pay for it for peace of mind.)
Some people here count only 75% of SSI as dependable income. Some count 100%, some count 0%. I think it’s bananas to not consider SSI. That said, there’s a lot of evidence as to why people count only 75%. I made sure our financials support 75% as a worst case scenario.
Is the combined benefit around your current spending plus inflation?
Edited typo