I'm quite lucky to have a traditional pension. As such, this reduces my hourly compensation and 403(b) employer match but is still a tremendous asset that I find difficult to factor in to my retirement calculations. (mostly because I'm dense with math)
I am 100% vested but the earliest I can retire is age 51 and the earliest I can start drawing on the pension is age 55. (I am 33 right now).
I know a lot depends on the variables of when I retire, and when I start drawing the pension but since this is an early retirement website, I'll look at best case scenaro vs. "typical" retirement.
Scenario A: Work till 51. receive benefits at 55
$345,717 Lump sum
$ 1,773 Single Life Annuity (monthly payment)
$ 1,904 50% Joint and survivor Annuity (monthly payment)
$ 2,927 level income until Social security kicks in with 10 year guarantee
Scenario B: Work until age 65
$1,169,154 Lump Sum
$ 7,337 Single Life Annuity (Monthly payment)
$ 8,417 50% Joint and Survivor Annuity (Monthly Payment)
$ 10,745 Level Income until Social Security kicks in with 10 year guarantee
Is the best way to do this just to add the value of the lump sum to my hypothetical portfolio at that future age?
Or, is the best way to use the monthly payment to offset my future income needs and figure I'm drawing down a lesser fraction of my portfolio value each year (so basically forecast my retirement income needs as being roughly half)?
Any guidance greatly appreciated!