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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75781  
Subject: Re: Pension Plan Choices Date: 2/25/2001 11:24 AM
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Would add 6 years to my service credit
This would give me well over the 10 years needed to vest & become eligible for disability payments or survival benefits. I would be able to retire 6 years sooner.


This is all well & good; potentially even at a cost of $11,000. However, to evaluate this option, you need to give us a bunch of details:

1. Your current age?
2. What mnthly benefit would you receive and at what age would it commence?
3. Any special features attached to (2) above?
4. Anything unusual about your health/life expectancy?

With these data we can do a future value computation to determine:

A. Spend the $11k to buy the years to buy the benefit in (2) above.

B. Invest the $11k for N years (say to age 65) which will create a lump sum of $XXX which can then be converted into an immediate annuity of $ZZZ per month.

TheBadger


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