I recently started a job with several benefits including health and dental. It also has a pension. For various reasons I do not think I will be staying at this job very long. One reason is the base salary is not very good. Another is the opportunities for career advancement are not good.

My questions are

  1. How do you value benefits? For example eye glasses could be paid for but if I don't need them then I guess that's $0 for me. Other things like physio or cavities would be nice if needed but there's no guarantee if I need them.
  2. I pay into a defined benefit pension plan each month. Even given the formula I'm not sure how to determine the value for it? For example I assume it would be better to take a job that's salary is higher by $20K but no pension plan. I am comfortable investing the money myself, but I guess the idea with a pension is a large amount is being invested by professionals?
  • If relevant, the pension plan is the Municipal Pension Plan. Sep 12, 2023 at 6:18
  • 1
    Please specify the country. Also the value will depend on how much you are paying and what you will be getting when you retire, and what happens if you quit in x months. Some of those details might be required. Sep 12, 2023 at 10:07

3 Answers 3


With a defined benefit plan, the main value you're getting out of the pension is that the money is guaranteed for life (with the caveat that pensions can, at times, become underfunded).

I'm in a similar situation myself, where the pension is very strong, has sound investment principles, and is very unlikely to be underfunded. The main difference you're looking at without a pension is that the dollars you make during your working life need to stretch until the day you die, a date that you don't know. So a strong defined pension makes this planning a lot easier - you just earn your monthly benefit, then retire and don't need to think about it any more.

To me the question is how much you value this benefit. If you're confident that you'll make enough to cover yourself in retirement without a pension, it's not as big of a deal. If you don't have that confidence, the pension is more important.

As far as actually calculating it's financial value, my general formula is to take my current estimated monthly benefit, and multiply it by 12 months and 20 years, assuming a 20 year retirement. So, for example, if every year you accrue an additional 100/month benefit, this would be worth about 24 000/year to you in benefits.


I think you're on the right track - you count what is actually a benefit to you. If your health insurance premium is higher but you get a better plan, you should consider if the benefit is worth the cost. Having a higher pension is only valuable if you choose to take advantage of it, and only when you retire.

One thing to consider, though, is that a higher base salary tends to compound. Bonuses can come and go more easily, but raises are often done as a percentage of your base salary, so while the other benefits may be nice now, a higher base salary now may be more valuable in the future, while benefits tend to grow more slowly.

All of this is predicated on identical jobs from a workload, culture, and relationship standpoint. Those aspects are often more important than compensation in any form for overall satisfaction.


I think the only answer for most benefits, if you want real numbers, is to run a benefits budget, figure out what you using and what prices would be with a different option, and run a spreadsheet. We can't do that for you, and offerings vary too much to make a good generalized answer.

A tax-advantaged retirement account is huge, at least in the US. You can compare the company's offering against running your own IRA. Nite that if the company offers matching funds to encourage you to sign up for their 401k or equivalent, you absolutely do want to at least max out of gat match -- that's free money, even if you can't spend it yet.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .