<prompt> Human: I work for a large corporation and have been here for 15 years. I am one of the last people in the company to qualify for the pension plan the company offers all employees hired after me get better 401k matching. I have recently grown unhappy with my job, for reasons I wont go into, but suffice to say its obvious they feel as though we are stuck here and will accept whatever they throw at us. My question; is there a formula to help me to determine what it would take to replace my pension should I leave the company? They have an online calculator that helped me determine that if I leave today and started drawing at 55 currently 36 I could expect about 540 a month, if I leave at 55 and immediately start drawing and only assuming 2 cost of living increases I should expect 3400 a month. I know there are a lot of variables to take into account, I am just looking for a ball park figure as to what my magic number should be for me to leave.  <response>: I know there are a lot of variables to take into account, I am just looking for a ball park figure as to what my magic number should be for me to leave.The magic number is that youd be giving up your salary 18,306 per year in retirement benefits plus social security. The variables to take into account are when youll die, your discount rate during your working years, and your discount rate in retirement. I assumed them to be 85 years old, 5, and 4.5, respectively. Your life expectancy right now is only 42-46 years according to the social security administration depending on whether youre male or female, but I was feeling generous so I gave you 49.The difference between quitting now and in 19 years is 2,680 per month for life 3,400 - 540, or 34,320 per year.The math for this is pretty simple, Im using years rather than months in order to minimize mistakes. It could affect the result slightly, but not enough to matter.An annuity that pays 34,320 per year is worth 559,034 34,320 1 - 1.045-30 .045. If you treat it as an annuity in perpetuity the math is much simpler - 34,320 .045 762,666, but you may not live forever.So you have 19 years to accumulate that. 559,034 contribution 1.0519 - 1 .05, so youd have to contribute 18,306 per year to get that or 24,974 per year if we used the perpetuity number. 