Pensions

Pensions are going the way of the Wooly Mammoth, but you can still find them on occasion.

Generally pension benefits are actuarally nuetral between the various options, but not always.

So some math is required.

Non-COLA pensions.

COLA is Cost of Living Adjustments. Some pensions do not adjust. Some adjust a fixed amount and some are like Social Security(SS) and adjust according to inflation. You need to know which kind you have.

The easiest way to convert it to a COLA pension, to make the math easier is just take 66% of the pension as your COLA amount. So if your pension is paying $50k/yr non-cola, that would amount to $33k/yr COLA. the other $17k/yr would be invested like the rest of your money to account for future inflation.

Then the math is the same as SS and COLA pensions.

Some Resources

• https://grumpusmaximus.com/
• https://www.bogleheads.org/forum/viewtopic.php?t=384925
• COLA adjustment math: https://www.bogleheads.org/forum/viewtopic.php?p=3518464#p3518464
• https://www.kitces.com/blog/rigorous-analysis-of-pension-options-done-right/