Retirement savings and pension question?

[kitty63]

So I'm trying to figure out if I'm on track for retirement savings and I'm stumped. If you are eligible for a pension how does that figure into your calculations of what you need saved by X age? I'm turning 40 and have about 2x my income in savings on my own. So am I "behind" since I don't have 3x my salary or is there a way to reasonably incorporate into the calculations. Thanks!

[archiethedragon]

For this purpose you can calculate a estimated current value of your pension based on what your monthly pension payment would be. this is a little hard to do because pensions have complicated vesting and payment calculation rules, but you can try to estimate how much your pension payment would be if you stopped working for your employer today.

To figure out how much that is worth, multiply that amount by 12 (to come up with your annual pension payment) then divide it by 0.04. That give you a rough estimate of the retirement savings you would need to generate the same amount of retirement income, assuming a 4% withdrawal rate. You could also make some adjustments for inflation and the time value of money, but I don't think it is necessary for this exercise.

[kitty63]

Thanks!

[gt7301b]

My pension gives me an estimate at the bottom of my check of what my take home would be in retirement based on vesting and other factors. I just include that in my future income calculations. We are trying to not count on the entire future amount of our pensions as we don't want to stay in a shitty job just because of a pension.

[dancelnow]

I'm just considering my pension as gravy. I don't know how long I'll stay here or if it will still be solvent then.

[Roc A Bee]

I count my pension. I know lots of people don't, but it's a mandatory contribution of 7%. And that's a lot for me! Plus I'm vested.

[AAM2012]

May 4, 2016 14:30:01 GMT -5 dancelnow said:

I'm just considering my pension as gravy. I don't know how long I'll stay here or if it will still be solvent then.

Agree that for me it's just extra...but maybe I'm a little bitter about the extra $50/month. That's like maaaaaaaaaaaybe gas for the car for like a 1/2 week.


Anyways, my pension gives me a current cash value and I consider that amount when I do my calculations.

[dragon's breath]

I like the retirement calculator on the AARP website. You can put your expected pension in there and play with different retirement ages, contributions,etc.