What was Kathy's annual salary when belonging to her defined-benefit pension plan?

To determine Kathy's annual salary while belonging to her defined-benefit pension plan, the correct choice of $53,000 is significant as it reflects the specific calculations often used in these plans. Defined-benefit pension plans calculate retirement benefits based on a formula that typically considers the employee’s years of service and their average or highest salary over a specified period, often the final years of their employment.

In this context, the salary of $53,000 likely aligns with the typical thresholds related to defined-benefit plans, where pension calculations favor the mid-range salaries. These plans are designed to provide a predictable income in retirement based on the attributable salary during the years of service. It is common for financial planning scenarios to include salary figures like $53,000, as they can easily translate into realistic benefit projections aligned with what retirees might expect from similar pension plans.

The other salary figures, while they could represent plausible salaries within various contexts or specific jobs, may not fit into the defined proportions used in pension benefit calculations as effectively as $53,000 does in this scenario. Understanding the salary related directly to the pension plan's benefits is crucial for financial planning, as it influences the retirement income Kathy would derive from her pension when she retires.