Skip to main content
No. of Recommendations: 0
CuriousQ writes,

<<The most accurate way to value a pension is to compare it to what a commercial insurer would charge for the same monthly life annuity benefit. If you have a Gov't inflation-adjusted pension, comparing it to commercial life annuity with a 2%-3% annual adjustment should be pretty close.>>>

This is really the only "correct" way to do it. Using the 4% method is interesting for comparison, but inaccurate--with a pension or annuity, the money flow stops when the pensioner/annuitant dies (or when the second of the married couple dies, if you chose that option in both the pension and annuity). But, with the 4% rule, you not only have a large chance of having money left over, there's a decent chance of passing away with more (or raising your spending over the years).

</snip>


Absolutely! I'm 27 years into the 4% rule and now have almost 10x my starting balance. That's 10x after 27 years' worth of retirement withdrawals, and 10x after 50%+ stock market declines in 2000 and 2008 which I rode down & up with my long term buy & hold (LTB&H) investment strategy.

The other thing I find fascinating is that even though I had a multi-million dollar winner in DELL and a lesser amount in Pfizer which I still hold, I'd be 20x today if I had split my money between a tech sector find and a pharmaceutical/health care fund. You need to be right on the industry/sector (I dumped my Exxon shares in the mid-1980's to concentrate my portfolio on Drugs and Tech), but you don't need to invest in individual stocks.

intercst
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.
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.