During the twentieth century, when industrialized America was at full throttle, it was common for companies to offer employees a lifetime pension based on a formula. The formula for this Defined Benefit plan might look something like this: # years of service X 2.0% per year X highest three years average salary. Let's assume your average salary was $50,000 per year and you worked 30 years. Your pension might look like this: 30 yrs of service X 2.0% per year = 60%. $50,000 X 60% = $30,000. Therefore, you would receive an annual pension of $30,000 for as long as you lived. However, if you were married and did not allow for a survivor benefit, and if you predeceased your spouse, they would receive nothing.
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