I get $3.15 million, but whos counting, right?There's simply no way you can expect to more than double the returns of the market no matter how much careful homework you did. If that was true, why would the majority of mutual funds fail to beat the market? Or, even without expenses, beat it by only fractions of a percent.The kind of returns you're talking about are 'best investors of all time' kind of ratios, and its absolutely insane (sorry, but it is :) ) to project that kind of return. Especially for retirement money for which you need to have a distinct interest in portfolio invesments.Why? Well, to get those kinds of returns you would need to take on risky investments (equities no doubt, but probably even riskier ones like small caps and microcaps and foreign small caps, etc). So lets look at this... returns would equal the DB payout at 18% returns. This means, should the market hit a bump in the first year, and decline by 20%, and you still did utterly amazing and beat it by 10%, netting a 10% loss, your net money would be $630K... MINUS the $10,500*12 defined benefit equivalent withdrawal, leaving you only $504K.Even if you were to do utterly amazing and beat the market by 10% after that, your absolutely insane 20% returns could net you $100K or so per year, which even living on that amount only (less than your DB) would never ever ever get you back to the DB-level... ever.They're offering you this buyout for a reason, and its not because its good for you.I mean, really, you have it made. You will be pulling a risk free, guaranteed, government pension of $126K in retirement, which will be more than you need to live on and will let you do whatever you want with your lives, as well as the SS you'll eventually pick up, not to mention giving a significant portion to charities you want to support and leaving a nice built-up nest egg for your family with the extra. And you want to risk that? For what is nothing more than a pipe dream of 20% annual returns?Yup, your wife is definitely smarter ;)
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