How To Value My Pension?

The pension is so much safer.

In order to get $2000 a month or $ 24000 a year. (Going with the 4% rule). One would have to have an equivalent of $600,000 in an IRA to pull that 24k annually at a 4% draw. Unless I could be assured I could grow that $80,000 buyout to $600,000 in time. I would not do it. I would not be that confident in betting on the market return with its ups and downs that much to forego that 24K steady income stream. Did his pension have a cola? Another factor to consider but it only makes the needed equivalent even bigger. I hope he didn’t take the offer.

I purchased my first home at the age of 21 for $87,000 and sold it for $197,000. My second home, acquired for $170,000, was later sold for $320,000, and my third property, purchased at $300,000, fetched $589,000, with buyers covering all closing costs and expenses. Not reaching a million before retirement feels like an unfulfilled goal.

This is bad advice

Can a couple live off only ones state pension .. and the other person has no money for retirement nor have any savings ..and are 47 yrs old now . Can a couple retire off that?

This is terrible advice i sure hope this guy didn't take the buyout 😢😢

Does my pension count towards my 15%

Retired 12-31-22 after 28 1/2 bring home more than I did working the fire department.

silly dave still advertising mutual funds lol

Can we do financial peace university in Spanish?

Why take the risk? Is their a cola built in? Think about 20 years at 24k per year versus a flat fee of 80k. I would take the pension before the payout.

That dude's pension is worth way more than 80k lol. Terrible advice, Dave. There's a simple formula for calculating NPV of a future ordinary annuity. I can tell intuitively his pension is worth more than 80k.

LOL - I was gonna use my pension for my truck note. Still deciding on what to do.

Jesus is coming soon. Someone in a South Carolina Dollar General Store just told me.

Even fans of hillbilly Dave must admit he's sometimes dead wrong. He's wrong here.
80000 is a ridiculous lowball offer. My pension is 1300 a month; BP offered me 250k, I said no thanks.

No no someone ghetto cheap

Mi de investments no mi importa I no speak English to quiero ninero ya no quiero sufrir esta casa ughhhhhhhh I can't die apparently my third eye chakra is open ayuda mi la verga I don't like trucks don't have licenses

Ayuda mi

....this is why you buy real estate free n clear and rent it out...repeat over n over again until you're ready to retire

Are these numbers still accurate? I want to understand more about this.

How do you roll 80k into an IRA when the annual contribution amount is 7k??

How do you factor in a military retirement when planning on asset allocation and amount required for retirement. An example, if I retired from the military with 30 years of service I would make 75% of my base pay (currently 10,350). I would gain 2.5% per year and will have another pay raise bringing that monthly up to -13k per month before taxes.

Currently maxing my tsp 19.5k and 6k in Roth as well.

What happens to employment pension plan if a person becomes disabled at 50 years of age and can’t work any more ??
What will happen to pension ??

I value my pension and SS as 100% of my retirement income. My expenses must be less than my income. All my other assets are left untouched. This is my financial plan and it works for me.

Thirty years ago when I was young, Ramsey wasn't around but I had his same logic. I thought I could get a better return and my wife would get 100% instead of 60%. Now that I am nearing retirement age, I wish I hadn't done that. My Stock Mutual Fund return wasn't near what Ramsey hopes, and I am afraid of running out of money. If I was afraid the company was going to go belly up, maybe but otherwise, a secure retirement fund is priceless.

From what I hear a lot of companies are trying to eliminate pension programs if they have one.

The Ramsey rule of thumb, go with Dave’s advice on debt, go with the opposite of Dave on investing.

Even pension plans are not 100% guaranteed. Ask anyone that worked for the city of Detroit.

Should be about a $300k buy out

Curious what is an "RIQ" ?

When you have a pension, you don’t need to save for retirement or live like your poor for 40 years. Your pension replaces your income. Some pensions you make MORE money than working. No reason not to incur debt and live your life how you want to.

Those who can role it over are either very young or in a minority. Most Americans at age 65 can not afford to do that they will have to use pension or lump sum just to scratch out some kind of a living.

Present value of a perpetuity = annual income/current yield on a 30 year U.S. treasury bond.

A pension at 65 Lolol this guy is a dueeb

I was at a retirement seminar and the speaker spoke on how he quit his job after he made well over $650,000 PROFIT within 3months he invested $120,000. I just began investing and i will really appreciate any tips or helpful guide.

He will only end up with more money if the stock goes up once they go down he could lose it all... stocks go up and down... he gotta hope it grows and hope he can retire on its up swing... and for that reason I’m out

Wow they really lowballed that guy.

Curious... How come Dave doesn't mention the 100% joint survivor option?

Yes, you can do better by putting it into a good growth fund. BIG QUESTION: Can you keep your grubby paws off theses funds for that period of time? In the caller's case that time is 20 years.

JNJ 10k
MMM 10k
MCD 10k
RGR 5k
BA 5k
SBUX 5k
AAL 5k
Apple 10k
Amazon 10k
( Insert dividend stocks totaling ) 10k

80k well spent on a long term retirement porfolio.

You will make more than 10% AND be able to live off the dividends in 20 years. Never touching the value of the account.

Im taking lump sum.

I don't know what to say about you yet

What makes you think the pension goes away when he dies? Did you read his contract? Taking the 80K is bad advice. A lot of pensions have a certain period, years they have to pay, or can be structured with survivor benefits. If he lives 20 years, which would be his normal life expectancy, that’s 24,000 x 20 = 480,000 in future benefits, more if he lives longer. 401k’s are in the toilet, as I write this. Your assuming 7%, which a lot of the large pensions have been struggling to average. I think this is very poor advice.

Just doing some quick math here. 80k would grow to 310k at 7% annually over 20 years (or an inflation adjusted 10% annual return). A 4% withdrawal rate on 320k would = 1,033 per month. I think health, of both your company and your self, should also be considered, but if I were relatively confident with that then I'd actually wait for the 2,000 per month.

I have a mandatory pension. Required 8% from me, employer matches us with 18%. Should i had an additional 15% of my income to a Roth IRA? I mean after being debt free of course

when you die you dont lose the money lol

Having a fix income in your pro folio is not a bad thing. Not your only income stream, I’d leave it in that annuity from the company.

My husband will get a Pension that will pay him anywhere from $25,000 to $28,000 per yr when he retires it will pay him that much until he dies and if he dies before me the pension pays me the same amt. till i die there are not to many Pensions that will do that.

Ppl don't realize that you make waaaay less in public service. In ten years, 5 yrs straight without a raise, I went from making about 10% more than my husband to him making about 20% more than me. Oh I forgot we did get jean days ☹

SILVER AND XRP...the greatest investments on the planet.