How to properly identify a vested deferred defined benefit pension in FIRECalc?

[nico08]

Hi. I was wondering if you can give me your opinion as to how to properly identify a vested deferred defined benefit pension in FIRECalc.

I will have a small defined benefit pension. I won't be able to collect on it for about 20 years from now. I know the monthly amount that I will receive from it (the amount will not increase based on a COLA between now and the 20 years from now when I will be able to collect). The amount will have a cost of living adjustment, but the cost of living adjustment will not start on the pension until I am eligible (based on age) to start collecting from it. So, do I select the check box in FIRECalc that would identify this pension as having an inflation adjustment? I was not sure, because the COLA does not start until the pension starts.

Thank you for your advice.

 

[REWahoo]

So, do I select the check box in FIRECalc that would identify this pension as having an inflation adjustment?

Yes, that is the correct way to enter your pension into FIRECalc. The inflation adjustment will be calculated beginning the year you start collecting your pension.

 

[nico08]

Ok, thanks. Choosing the inflation adjustment gives me a better FIRECalc result, so this is good news for me! Of course, that is assuming the state pension fund does not go into default in the interim.