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Reply to "401K plus pension"
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[quote=Anonymous]OP I did some very quick math. I assumed an 8% return on your 401K and your present pension amount (it’s unclear is that is current dollars (52% of current income) or based on a presumed inflation of about 2.5% per year till 58 (so future income). I assumed the latter. So if you are getting a 3% increase every 3 years, with no COLA, your ending salary at 58 is $180K. Your SS at 62 is $67K (future dollars) but you may want to assume a 30% haircut on that. If you do, you need $54K/year to cover your salary at 100% in retirement. you will also need to fund a 4 year SS gap. So using the 4% rule, you need about $1.5M in retirement. If you contribute 10% of your salary to the current 200K, that should get you there. This calculation is slightly conservative overall (assuming 30% SS cut, needing 100% of salary in retirement and 8% in 401K returns as opposed to 10%). Adjust if you need to cover insurance before Medicare. [/quote]
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