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RoadScholar5 writes,

I do follow you, just having problem with the idea that $1,000 today will be worth $24K/year over approximately 10 years if we use the assumption of average age of 75, when that first day is only 16 years away.

What you're looking for is the "Present Value of a Future Life Annuity". That's a two-step calculation.

First determine the cost of a life annuity paying $24,000/year (I'll assume you're 65-years-old when you start drawing the annuity benefit.

Here's a link to some quotes on life annuities.

A $24,000/year benefit for a 65-year-old male would cost $370,000.

Now you need to calculate how much money you need today at say 4% interest to have $370,000 in 16 years. That works out to about $198,000.

I don't know where your former employer came up with a cash value of $1,000, but if that's in fact the case, obviously you're much better off waiting to take the monthly benefit at age 65.

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