Personal Investments • How to factor pension/SS into your retirement spending multiple?

Hi folks,

When people say they are 25x or 30x, do they factor in pension and SS? I am trying to see where we are today.

Let's say the scenario is something like this (all numbers are in 2024 dollars)

• Ages: 49/52
• Portfolio = $3.8m
• Retirement annual spend = $200k
• Pension (starts in 2033) = $80k
• SS (starts in 2045) = $45k
• Retirement horizon = 50 years
• Assumption: one spouse retires today, the other retires in 3 years.

In order to arrive at my multiple, I created a spreadsheet for 50 years of retirement, and calculated what our total portfolio withdrawal will be and then averaged it out over 50 years.

• If I don't factor in pension or SS, our multiple is 19x
• If I factor in pension (but not SS), our multiple is 30x
• If I factor in both pension and SS, our multiple is 36x

So what is the preferred way to calculate your multiple? It seems to me that we are FI

P.S. By the way, it was also very eye-opening to me that if we shoot for a retirement annual spend of $180K instead of $200k (which realistically we can easily do because $200k includes a lot of discretionary spending), the numbers looks like:

• If I don't factor in pension or SS, our multiple is 21x
• If I factor in pension (but not SS), our multiple is 35x
• If I factor in both pension and SS, our multiple is 47x

Statistics: Posted by lifebeckonss — Wed Aug 07, 2024 9:08 pm — Replies 6 — Views 479

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