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<blockquote data-quote="nhguy" data-source="post: 282087" data-attributes="member: 5248"><p>Boiled Frog,</p><p> </p><p>Here is an example of what type of money might be put into a pension buyout.</p><p>Assume a person is retiring with 25 years of service and they are age 55 when they retire. I am also going to assume that the money gets 5% interest a year. The other assumption is that the pension they will recieve is $30,000 planned to be paid for 25 years (till age 80).</p><p> </p><p>You would need to recieve $400,000 to make it to age 80. All of the money would be completely exhausted at year 25. The pensions are not designed to pay out over 25 years and at the end of the 25th year to still have the total principal balance left. It is a declining balance that exhaust itself over some time period. I also think that is why so few took the buyout offered last year.</p><p> </p><p>I know the formula that is rumored out there, but, I would be shocked if that's how they calculated it out. Remember any change they make will ultimately result in a hugh windfall for the company.</p><p> </p><p>If you want to get a real idea and if your a mathametician, calculate out the two formulas they use in the pension book and I think you'll see that the dollars are much smaller than the formula rumored to be out there.</p><p> </p><p>I think we'll all know soon.</p><p> </p><p>Remember the big fish always eats the little one's!!</p></blockquote><p></p>
[QUOTE="nhguy, post: 282087, member: 5248"] Boiled Frog, Here is an example of what type of money might be put into a pension buyout. Assume a person is retiring with 25 years of service and they are age 55 when they retire. I am also going to assume that the money gets 5% interest a year. The other assumption is that the pension they will recieve is $30,000 planned to be paid for 25 years (till age 80). You would need to recieve $400,000 to make it to age 80. All of the money would be completely exhausted at year 25. The pensions are not designed to pay out over 25 years and at the end of the 25th year to still have the total principal balance left. It is a declining balance that exhaust itself over some time period. I also think that is why so few took the buyout offered last year. I know the formula that is rumored out there, but, I would be shocked if that's how they calculated it out. Remember any change they make will ultimately result in a hugh windfall for the company. If you want to get a real idea and if your a mathametician, calculate out the two formulas they use in the pension book and I think you'll see that the dollars are much smaller than the formula rumored to be out there. I think we'll all know soon. Remember the big fish always eats the little one's!! [/QUOTE]
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