Taking Defined Benefit early....
So I am working my cash flow for retirement and looking at the option of taking my defined benefit payment before my full retirement age of 62. If I take it at 60, they reduce my benefit to 94% of my full retirement benefit (instead of $68.2K I will get $64.1K for the rest of my life).
The extra 2 years of benefit of course is $128K (discounted at 0%). If I lay out a spread sheet and look at the present value of the additional $4.1K I would receive from age 62 to the end of my life if I didn't take it early, even in the best case (discount rate of 0%) “break-even” isn’t until age 93. Discounting at 1% pushes “break-even” to 100.
What am I missing here? If my math is correct, it seems like a no-brainer to take it at 60. Not to mention that taking the pension brings with it eligibility for retiree health benefits (which don't look that great now with the Market Place).