How Do I Calculate The Value Of A Pension?
This may be a simple question. My wife and I will get a pension at age 60 and age 62. Both are non-cola pensions, and we know what the annual amounts will be.
To calculate the value, is it as simple as multiplying the annual amount by the number of years we expect to live?
FYI. I found this website, and this is calculation used based on pension of $85K per year:
https://www.financialsamurai.com/ho...mount divided by,paid until death as promised.
Annual pension: $85,000
A reasonable rate of return divisor: 3%
Percentage probability of pension being paid until death: 100%
Value of pension = ($85,000 / 0.03) X 1 = $2,833,333
This may be a simple question. My wife and I will get a pension at age 60 and age 62. Both are non-cola pensions, and we know what the annual amounts will be.
To calculate the value, is it as simple as multiplying the annual amount by the number of years we expect to live?
FYI. I found this website, and this is calculation used based on pension of $85K per year:
https://www.financialsamurai.com/ho...mount divided by,paid until death as promised.
Annual pension: $85,000
A reasonable rate of return divisor: 3%
Percentage probability of pension being paid until death: 100%
Value of pension = ($85,000 / 0.03) X 1 = $2,833,333
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