Coast FIRE with a pension or Social Security: how much less you need

If you will get a pension, Social Security or a State Pension in retirement, your Coast FIRE number could be much smaller than most calculators suggest. Many popular tools leave pensions out completely. This guide shows how much difference they make, and how to count them safely.

To try your own numbers as you read, open the Coast FIRE calculator and fill in “Income in retirement”.

Why a pension changes everything

Coast FIRE is the point where your investments will grow into your full retirement pot without you adding more. The size of that pot depends on how much your investments need to pay you each year.

A pension pays part of your spending for you. So your investments only need to cover the gap:

What your investments must pay = yearly spending − yearly pension

Every dollar of pension income each year removes about $25 from the pot you need at retirement, at a 4% withdrawal rate. A $10,000 pension means you need $250,000 less.

A worked example

Riley is 35 and plans to retire at 67. Riley has $120,000 invested, adds $1,000 a month, and expects to spend $50,000 a year in retirement. We assume 7% growth, 3% inflation and a 4% withdrawal rate.

Here is how Riley’s plan looks with three different pensions:

Pension per year	Pot needed at 67	Coast FIRE number today	Funded today	Stop saving at
None	$1,250,000	$369,335	32%	Not before 67
$18,000	$800,000	$236,374	51%	48
$30,000	$500,000	$147,734	81%	38

The investments, saving and spending are identical in all three rows. Only the pension changes.

Riley's Coast FIRE number today, by pension

• No pension$369,335
  Not before 67
• $18,000 a year$236,374
  Stop saving at 48
• $30,000 a year$147,734
  Stop saving at 38

With no pension, Riley never reaches Coast FIRE before 67 at $1,000 a month. Riley would need to keep saving all the way to retirement and would still fall a little short.

With an $18,000 pension, Riley can stop saving for retirement at 48.

With a $30,000 pension, Riley can stop at 38, just three years from now.

That is the same person, the same savings habit and the same lifestyle. Leaving the pension out would make Riley think the goal was out of reach when it is not.

How the maths works

For the $18,000 pension:

1. Gap to fill: $50,000 − $18,000 = $32,000 a year.
2. Pot needed at 67: $32,000 ÷ 0.04 = $800,000.
3. Real growth: 1.07 ÷ 1.03 − 1 = 3.88% a year.
4. Coast FIRE number today: $800,000 ÷ 1.0388^32 = $236,374.

Riley's path with an $18,000 pension

Money investedAmount needed to coast

$0$400K$800K$1.2M

Age 48 · $394,984

Can stop saving here

3540506067

Riley has $120,000, so Riley is 51% funded. The calculator then steps forward a year at a time, adding Riley’s saving and growth, until the balance catches up with the Coast FIRE number for that age. That happens at 48.

How to count your pension safely

Pensions are powerful, so it is worth being careful with them.

Use official forecasts. In the US, your Social Security statement shows your estimated benefit. In the UK, you can check your State Pension forecast with the government. Other countries have similar services. Work pensions usually send a yearly statement.

Use today’s money. Forecasts are usually shown in today’s money already. If yours shows a future amount, use a lower figure.

Only count income you are confident about. If a scheme might change, or you are not sure you qualify, enter a smaller amount. Entering 0 is the most cautious choice.

Watch the start date. Many state pensions start at 66, 67 or later. If you want to retire before your pension starts, you will need to cover those years from your investments. This calculator does not yet handle that gap, so lower your pension figure to stay safe.

Remember taxes. Pension income may be taxed. This calculator does not include taxes for any country, so treat results as before-tax.

Not sure what your pension will be?

Plenty of people have no idea, especially in their twenties and thirties. That is fine. Start by entering 0, which gives you the most cautious Coast FIRE number. Then try a realistic figure from your official forecast, and see how far your stop-saving age moves.

If the two answers are close, your pension does not change your plan much and you can stop worrying about it. If they are far apart, like Riley’s, it is worth an hour to find your real forecast, because that one number decides whether you are years away from Coast FIRE or nearly there.

You can save your plan and come back to it once you have checked.

Couples: add both pensions

If you are planning as a couple, add both of your pensions together and enter them as one household figure, alongside your combined spending. Two modest pensions together often cover a large share of a couple’s costs, which can bring your stop-saving age forward by many years. Coast FIRE for couples explains how to combine everything else.

Names in different countries

The calculator sets the pension name for your country so the form makes sense:

• United States: Social Security
• United Kingdom: State Pension
• Canada: CPP and OAS
• Australia: Age Pension
• India: EPS or NPS pension
• Euro area: state pension
• Japan: public pension (nenkin)

Whatever it is called, the maths is the same: subtract it from your spending, and your investments only need to cover the rest.

See your own number with your pension

Find your Coast FIRE number with your pension. Enter your pension under “Income in retirement” and watch your Coast FIRE number and stop-saving age change.

This article is for education, not financial advice. All figures are in today’s money and do not include taxes or fees.