In the near future, I’ll have the option to choose between two retirement plans for a job I’ve been at for about two years. Both options include a standard 401k with a generous company match. Including that match, I’ll have between 10-12% of my annual salary going into the 401k with either option. My dilemma is whether to keep the defined benefit pension plan or move to the new plan, which will provide an additional annual payment into the 401k. Essentially, the options are as follows:
Defined benefit pension plan, paying out 1.1% of my highest salary, multiplied by the number of years spent at the company. This option also includes the 10-12% contributed toward the 401k.
In addition to the 10-12% contributed to the 401k, this option removes the pension plan, but adds an additional annual contribution to the 401k of approximately 5.5% of each year’s salary.
Based on this information, which option seems more appealing, or what additional information would be needed to make that decision?
Some additional background info: I’m married, one child, with a decent amount in retirement savings, and will expect to work for another 20-25 years. At this point, I don’t expect to leave this company any time soon, but obviously, anything can happen.