Pension + FIRE: when could you leave?

1. Your pension. The common formula for a defined-benefit pension:

For each age you might leave, we add the years you'd work until then to your service. We assume your salary keeps pace with inflation while you work, so your final average salary stays the same in today's dollars.

2. The bridge. If you leave before the age your pension is paid in full, we assume it starts at that age, and your savings pay for everything until then. If your benefit waits in fixed dollars, inflation shrinks what it will buy by the time it starts. We count bridge money simply, as a year's spending for each bridge year with no growth, to keep it cautious.

3. The ongoing gap. Once the pension (and Social Security, if any) starts, your portfolio only covers what's left:

If your COLA is lower than inflation, your pension buys a bit less every year. As a rough, cautious approximation, we size the gap on what your pension would buy 20 years after it starts. It keeps losing buying power after that, so a long retirement may need more.

4. When you could leave. We grow your savings month by month at the real return, adding what you invest, and show the first age at which your projected savings cover what's needed.

• 457(b) plans. Distributions from a governmental 457(b) plan are not subject to the 10% additional tax on early distributions, except for amounts rolled in from another type of plan or IRA (IRS (opens in a new tab)). That can make a 457(b) useful for the bridge years. Withdrawals are generally taxed as income, except qualified Roth money (IRS Pub. 575 (opens in a new tab)).
• Leaving at 50 or 55. The IRS also lists an exception for distributions from a qualified plan when you separate from service during or after the year you reach 55, or 50 for public safety employees of a state or local government in a governmental plan. It doesn't apply to IRAs (IRS (opens in a new tab)). For qualified public safety employees, IRS Publication 575 describes the exception as applying at age 50 or after 25 years of service under the plan, whichever is earlier (IRS Pub. 575 (opens in a new tab)). The details matter, so check with your plan before you count on it.
• 2026 limits. For 2026, the limit is $24,500 for employee deferrals to a 403(b), and $24,500 for most 457 plans, where employer contributions count toward it too (IRS: 2026 limits (opens in a new tab)). The 403(b) limit is not combined with a 457 plan, so people with both may be able to contribute to each (IRS: 403(b) limits (opens in a new tab), IRS: more than one plan (opens in a new tab)). The catch-up for people 50 and over is $8,000 for 2026 ($11,250 instead at ages 60 to 63, if the plan allows), and the IRA limit is $7,500. Plan rules vary, so ask your plan.

Some state and local government workers aren't covered by Social Security in their public job, because their employer provides a pension instead (SSA, Social Security Bulletin (opens in a new tab)). You may still have Social Security from other work, or through a spouse.

The Social Security Fairness Act ended the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which used to reduce Social Security for many people with a pension from work not covered by Social Security. December 2023 was the last month they applied; they don't apply to benefits payable for January 2024 and later (SSA (opens in a new tab)).

To see your own estimate, sign in to my Social Security (opens in a new tab). Its estimates can assume you keep working until you claim, so if you plan to stop early, adjust the future earnings and claiming age there before copying the yearly amount (in today's dollars).

Real return, default 5%. “Real” means after inflation. Working in real terms keeps every result in today's dollars, so a FIRE number 15 years away still means what it means today, and we don't need a separate inflation guess. 5% after inflation is a middle-of-the-road planning assumption for a portfolio that holds mostly stocks. It is not a forecast, and markets don't deliver a steady return. Try 3% or 4% to see a more cautious picture.

Safe withdrawal rate, default 4%. This is the “4% rule.” It comes from William Bengen's 1994 paper (opens in a new tab), which used historical U.S. stock and bond returns to test how much a retiree could take out in the first year, then raise each year with inflation, without running out. A later study, often called the Trinity study (1998) (opens in a new tab), tested withdrawal rates over payout periods of 15 to 30 years; Bengen tracked how long portfolios lasted out to 50 years, but framed his 4% around a minimum of 30. If you stop work at 40, your money may need to last 50 years or more, so it's worth testing a lower rate such as 3.5% or 3%.

Inflation, default 2.5%. Only used to compare with your COLA and to shrink a benefit that waits in fixed dollars. Everything else is already in today's dollars.