The FIRE Defined Benefit Pension Buyback Loophole

Many FIRE followers overlook a powerful strategy if they have past government or union service: buying back years of pension credit. Lucas and Luna explore how a public school teacher who worked 5 years before switching to tech could buy back those years at pennies on the dollar, then retire early with a guaranteed inflation-adjusted income stream that reduces sequence-of-returns risk. They walk through the math using a real case: a 30-year-old with 5 years of teaching service who can purchase 5 years of pension credit for $18,000 — and how that translates into roughly $8,400 per year starting at age 55. The hosts discuss eligibility, cost calculations, the trade-off versus investing the same cash, and why the pension buyback window often closes after leaving the employer. This episode is a deep dive into a little-used FIRE lever that can dramatically lower the required portfolio size. #FIRE #FinancialIndependence #EarlyRetirement #PensionBuyback #DefinedBenefit #TeacherPension #PublicSector #SequenceOfReturnsRisk #RetirementPlanning #PersonalFinance #Finance #FrugalLiving #WealthBuilding #GuaranteedIncome #LucasAndLuna #FexingoBusiness #BusinessPodcast #RetireEarly Keep every episode free: buymeacoffee.com/fexingo