Valuation of a defined benefit pension plan
How do you place a value on a defined benefit pension? Financial planners like to give you an amount you need to retire. I can easily add up cash on hand, stocks, 401 K etc but what value do you place on a pension ? Most retirement calculators no longer even take into account a defined benefit pension anymore. I heard someplace that a pension that is paying you 3000 per month is worth 540K. I don't know how they calculated that number or if it is even close to being right.
Any ideas ?
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