No. of Recommendations: 0
I wrote (before my reply was accidentally submitted):

The monthly amounts are based on a life annuity, so life expectancy is built in. TheBadger pretty much sums it up, that they are assuming roughly a 6% interest rate to make the two equivalent.

That 6% only makes the benefits at 65 equivalent. The point is that there is likely no longevity risk because the payments are until death. Therefore, if you think you can beat the 6% over the next 10 years, you should take the money. If not, let the trustees of the plan hold on to it.

Of course, continuing employment will not only increase your benefit for interest and mortality, you will also enjoy large increases due to service and salary increases. (Assuming that your plans formula is a % of pay times service)

Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement