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If someone has a defined benefit, they still pay into it. That's not to say defined benefit programs aren't a great deal for the employee -- they are, and most
by rconti 2y ago
If someone has a defined benefit, they still pay into it. That's not to say defined benefit programs aren't a great deal for the employee -- they are, and most of us would love to have one. It's just to point out that you can't factor in pension payouts as 'free money' because it's more akin to an outsized market return or something.
Basically, you'd need to figure out the excess ROI based on what they get out vs what they put in, relative to the market (or something).
- justin66 2y ago> That's not to say defined benefit programs aren't a great deal for the employee -- they are, and most of us would love to have one. I would much prefer a big SEP-IRA, or a 401k with a company match beyond the standard safe harbor 4% or whatever it is. Government defined benefit pensions come with their own problems. https://news.ycombinator.com/item?id=40538070 https://news.ycombinator.com/item?id=40538070