Under optimistic assumptions, what percent of salary must be saved to
purchase an annuity equivalent to the DB
pension of $4,400/month?
¥Assume: starting salary $1,388, increasing 5%/year for 30 years (=$4,400); 8%
¥22 year life expectancy at age 63 (IRS standard, male).
¥Requires contribution of over 21% of
¥AND: no benefit to survivor, no inflation protection, no death or disability