Reply to Quantifying Value of Federal Benefits for Private Sector

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[quote=Anonymous][quote=Anonymous]But a government guaranteed pension of $60k a year until you die is worth exponentially more than the estimated value of what you'll likely actually pull out.  Let's say actuarial tables estimate you'll only live 20 years after retirement, so you're talking about $1.2million of pension payments (let's ignore inflation to keep it simple).  But you MAY live 40 more years.  Which is $2.4million.  If you don't have a pension, you have to put aside NOW so much more money than $2.4million if you want to guarantee yourself $60k a year until the unknown date that you die.  You have to protect against inflation, market swings, etc.  So the fed pension is worth a LOT more than the actuarial value of it.  [/quote]

One way to estimate it is to look at what it would cost for an annuity-- either calculated off the TSP site or a private company.  Or you could use the 4% rule (that you will draw down 4%, adjusted for inflation, each year-- that is designed to cover a 30 year withdrawal in good times or bad),.[/quote]

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