If teachers had
an expected pension wealth above what they would have been able to withdraw and invest on their own, he considered them to have a «positive» net pension wealth.
The relative magnitude of
expected pension wealth differs sharply between the plans depending on when a teacher anticipates exiting the position, and the magnitude of anticipated returns to investment.
The four bars on the right report total
expected pension wealth, again with the age 50 teacher with 21 years of experience normalized to one.
Not exact matches
And the investors involved don't consider this charity —
pension funds and sovereign
wealth funds are
expected to be among the biggest investors.
At any given age,
pension wealth is therefore lower for the mobile teacher — who has left one system early and entered another system late — simply because she can
expect to collect fewer
pension checks.
The key to understanding this is the concept of «
pension wealth,» the current dollar value of the
expected stream of future benefits, in other words, the cash value of a retiree's annuity.
Pension wealth is the cash value of the expected future stream of pension payments at various points in an educator's
Pension wealth is the cash value of the
expected future stream of
pension payments at various points in an educator's
pension payments at various points in an educator's career.
Biggs also converts these figures to total
pension wealth and finds that the average full - career state worker can
expect to receive $ 768,940 in
pension payments over the course of their retirement.
Each line represents the
pension wealth accrual (essentially a teacher's annual
pension multiplied by the number of years she can
expect to receive it) for 25 - year - old females at given points in time.
The primary drivers of
pension wealth accrual are changes in the annual annuity payment (determined by the benefit formula) and the number of years the teacher can
expect to collect.
One might
expect that the growth in
pension wealth would be fairly steady, as it is in a DC plan.
At that point, she will have contributed a total of $ 135,149 into the system and can
expect lifetime
pension wealth accrual worth $ 143,322.
So, if you don't
expect to amass enough
wealth to generate significant investment income in retirement, and don't have a generous
pension, a traditional IRA is likely to be the better choice for you.
Given the exposure which REITs offer foreign investors to U.S. markets, the change is
expected to draw additional global investments, especially from
pension funds, sovereign
wealth funds, and other institutional and equity investors.