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Rakhi Vasavada
Rakhi Vasavada , Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4418
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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as part of a divocre judgement, I was awarded 50% of my former

Customer Question

as part of a divocre judgement, I was awarded 50% of my former husbands' pension plan for a period of 10 years. He now wants to "buy" me out of the pension plan and modify the existing order. How do I determine what is a fair amount?
Submitted: 4 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 4 years ago.

Dear Madam,

 

In my opinion, you may try and arrive at this figure using the "present value of future money" method. This would be a simple calculation. Through this calculation you will determine the value of money TODAY of the series of payments that you would have otherwise received over a period of time.

 

Here, if you are due to receive, say $ 1,000 Per Month for next Ten years, the present value of money will help you arrive at a figure which you can receive as a lump sum TODAY and forego the future money. I think, this is what you are trying to work out.

 

The following link will help you in understanding this concept http://www.darwinsmoney.com/present-value-of-money-explained/

 

The method of calculating is given at http://www.arachnoid.com/lutusp/finance.html . Just put in your figures and it will help you at a fair value of the receivables that you have over the period of years TODAY.

 

Don't hesitate to come up for further clarifications / assistance.

 

I am sure this would help...

Warm Regards,