- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Value of a defined benefit plan
Posted on 7/6/14 at 9:11 am
Posted on 7/6/14 at 9:11 am
I am 41yo and already receive a defined pension benefit. It's not a large amount monthly, but I am trying to figure out how to value it in my total net worth. It would take roughly 260k to replace it with an annuity according to online quotes I got. But the cash value prior to my "retirement" was just under 100k. Any financial planners want to take a shot at this?
Does it even belong in a net worth assessment? If I was worth ten million dollars and bought an annuity with it, I would still have a net worth correct?
Does it even belong in a net worth assessment? If I was worth ten million dollars and bought an annuity with it, I would still have a net worth correct?
Posted on 7/6/14 at 10:56 am to nogoodjr
I would use present value of future cash flows. You will have to make some assumptions.
Is it a pure single life monthly payout?
Is it a pure single life monthly payout?
Posted on 7/6/14 at 11:39 am to nogoodjr
quote:
It would take roughly 260k to replace it with an annuity according to online quotes I got. But the cash value prior to my "retirement" was just under 100k.
Rates are so low right now it isn't at all surprising that the cost to replace it would be very high indeed.
If I were in your shoes I would definitely consider it as part of my net value and would value it at slightly under $260K. Whether someone else would value it the same way I have no idea. A lender might not include it at all, whereas your ex-wife's lawyer will value it at half a million, at least.
Posted on 7/6/14 at 12:52 pm to foshizzle
It is a single figure payout monthly for my life, then 1/2 the amount to my wife upon my death.
Posted on 7/6/14 at 1:53 pm to nogoodjr
I work in the defined benefit world in the actuarial field. If I had plan specifics I could tell you the exact value.
Posted on 7/6/14 at 2:09 pm to LSUTigKyl
I get one payment a month for life of about 950.00. I turn 42 in August. My wife gets half that if I die first. She is. 40. COL adjustments happen from time to time but no guarantees. What other data you need?
Posted on 7/6/14 at 11:54 pm to nogoodjr
What you told me is good enough information for me to give you an estimate. I misread your original post though. I did not realize you had already retired and are receiving the pension amount. Lucky guy to get that at 42 already.
It is most certainly part of your net worth in my opinion based on it is a guaranteed income for life. Good choice taking the J&S 50 as it is the most valuable option long term.
An interest rate on that annuity in the low 3's will give you that net worth of 260k or so. I would probably scale that back as they will come back at some point.
It is most certainly part of your net worth in my opinion based on it is a guaranteed income for life. Good choice taking the J&S 50 as it is the most valuable option long term.
An interest rate on that annuity in the low 3's will give you that net worth of 260k or so. I would probably scale that back as they will come back at some point.
Popular
Back to top
Follow TigerDroppings for LSU Football News