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What would the commuted value of his pension

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Question - Fred is 65 and leaving his company, but not retiring. He wants to take the commuted value of his pension and transfer it to a LIRA. His pension is based on the formula of 2% per year of service and the best average three years of earnings, which averaged $67,000, and he has worked there for 31 years. Assume the pension plan uses average life expectancy to be age 88 for males and an average real rate of return to be 1.7%. What would the commuted value of his pension (ignoring spousal entitlement and guarantee period)? Input the number only to the nearest dollar.

Reference no: EM133158313

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