A pension (defined benefit plan) promises a specific monthly payment for life based on years of service and final salary. Contrast with defined contribution plans (401(k), 403(b)) where the balance is what you get.
A pension (defined benefit plan) promises a specific monthly payment for life based on years of service and final salary. Contrast with defined contribution plans (401(k), 403(b)) where the balance is what you get.
Pensions are becoming rare in the private sector but remain common in government, education, and some legacy corporations. The biggest pension decision you'll ever make is lump sum vs lifetime monthly — and the right answer depends on interest rates, longevity, spousal needs, and trust in the plan sponsor.
Compare your pension's implied payout to a commercial SPIA with the same features. If the insurance-company SPIA would cost significantly less than the lump sum being offered, the pension is the better deal.
Start with the free Retirement Readiness Score to see where you stand, then talk to a fiduciary if you want a second set of eyes. No pitch, no pressure.
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