Net worth calc

[Options]

This may blow some peoples' minds, but I feel like my net worth is enough.

I think that puts me at the top 1% of something, though I'm not sure what. Maybe the personal satisfaction continuum, if there is such a thing?

Anyway, I guess the point is that although I am far from the wealthiest retiree here, or the poorest for that matter, I don't much care how my net worth compares with others. What I care about more is being at peace with my own situation and my place in the universe, something I think takes a lot of introspection to find in our society given the consumerist, shallow values that are so apparent here. Sometimes the ability to sleep at night is evidence of one's contentment, sometimes not, but in my case I sleep like a baby.

<<<~~~~~ (top 1%, sleep-at-night factor)

+1
Brilliant, all of it! Looks like somebody read my mind (although I've personally found the values on this site far from consumerist or shallow).

 

[RunningBum]

This may blow some peoples' minds, but I feel like my net worth is enough.

I think that puts me at the top 1% of something, though I'm not sure what. Maybe the personal satisfaction continuum, if there is such a thing?

Anyway, I guess the point is that although I am far from the wealthiest retiree here, or the poorest for that matter, I don't much care how my net worth compares with others. What I care about more is being at peace with my own situation and my place in the universe, something I think takes a lot of introspection to find in our society given the consumerist, shallow values that are so apparent here. Sometimes the ability to sleep at night is evidence of one's contentment, sometimes not, but in my case I sleep like a baby.

<<<~~~~~ (top 1%, sleep-at-night factor)

I like that a lot too. It's really that simple when you come down to it, do you have enough for your own personal situation. It just doesn't matter how it compares with anyone else.

 

[kcowan]

I agree with W2R. The days of keeping with the Jones passed when we decide to retire early. Now the scoreboard relates to us! Are we ahead of our person goals. if so, we are done! Everything else is just numbers.

If I am 3x your net worth but spend 4x your annual budget, then I might be in trouble.

Then I can quibble about your definition rather than addressing my problem!

 

[Badger]

This may blow some peoples' minds, but I feel like my net worth is enough...

Anyway, I guess the point is that although I am far from the wealthiest retiree here, or the poorest for that matter, I don't much care how my net worth compares with others. What I care about more is being at peace with my own situation and my place in the universe...

We live in a modest home in a neighborhood of houses that are only a few years old and easily 2.5-3.5X our size and getting larger. I don't care what their net worth is but we have everything we want and can afford anything we want and are retired and they aren't.

Cheers!

 

[pb4uski]

I've always liked the (equivalent) NW calculation that includes a NPV for one's guaranteed income streams + all other assets.

It seems to be a better predictor of retirement income (and all things deriving therefrom) than just the value of one's portfolio.

I guess it depends on what it is used for.

If you're calculating a WR then I think it is preferable to reduce the numerator by guaranteed income streams than artificially increase the denominator.

If you're comparing household economic wealth then I agree.... I think it makes comparisons fairer (for example, in comparing the net worths of a long-time state employee to a small business owner).

 

[RunningBum]

If you're calculating a WR then I think it is preferable to reduce the numerator by guaranteed income streams than artificially increase the denominator.

I find this way more difficult because my income streams start at different times. I don't have any guaranteed income stream right now, and won't for at least 7 more years, probably longer. I will get a pension at 65, and start SS sometime between 62 and 70. I haven't found a simpler way to represent that then to calculate a present value for that, and base my withdrawal rate including that value. If I were drawing my pension and SS immediately when I retired, I am pretty sure I would do it your way.

 

[Big_Hitter]

According to this website I am in the 96% percentile compared to others. I am not sure how accurate this is. I read about a lot of wealthy retired people here. So I bet most fall pretty high on the scale. I think the average gets dragged down by people who live in more rural areas.

I'm in the same boat. I didn't add in my pension or SS either. This is just assets minus my mortgage.

The percentiles (not averages) are dragged down by those who haven't saved, made bad decisions (marital or otherwise) or who are disadvantaged. I feel sorry for these people. One of my friends from HS just posted on FB that she is down to her last $2.

 

[pb4uski]

I find this way more difficult because my income streams start at different times. I don't have any guaranteed income stream right now, and won't for at least 7 more years, probably longer. I will get a pension at 65, and start SS sometime between 62 and 70. I haven't found a simpler way to represent that then to calculate a present value for that, and base my withdrawal rate including that value. If I were drawing my pension and SS immediately when I retired, I am pretty sure I would do it your way.

I have that problem as well.

I use withdrawals once those income streams are on line as the numerator and reduce the denominator by guaranteed income included in the numerator that will not be received from today until those streams start (as if I was carving those deficiencies out into a separate fund and the remaining nestegg has to fund the net spending).

 

[Huston55]

I guess it depends on what it is used for.

If you're calculating a WR then I think it is preferable to reduce the numerator by guaranteed income streams than artificially increase the denominator.

If you're comparing household economic wealth then I agree.... I think it makes comparisons fairer (for example, in comparing the net worths of a long-time state employee to a small business owner).

Agreed. Adjusting the numerator for guaranteed income streams is better because it puts the risk where it belongs, with the portfolio subject to a WR.

But, I didn't mean to get that analytical (silly me on this forum ). I meant that I think including the NPV of guaranteed income streams in an equivalent NW calc is a good 'short hand' way to look @ real/equivalent NW.

I find this way more difficult because my income streams start at different times. I don't have any guaranteed income stream right now, and won't for at least 7 more years, probably longer. I will get a pension at 65, and start SS sometime between 62 and 70. I haven't found a simpler way to represent that then to calculate a present value for that, and base my withdrawal rate including that value. If I were drawing my pension and SS immediately when I retired, I am pretty sure I would do it your way.

Yep, a quick NPV calc for guaranteed income streams is what I do. It's not precise and requires assuming a discount rate but, I think it's a good shorthand way to evaluate one's overall position.

 

[karen1972]

Yes but lets put this in perspective, likely most on this forum were pushing top 30% even in their 20s.. you save $50K by the time your 29, your already @ 72%. And this accounts for tons of people that clearly dont' save a dime. Take $40K at age of 40 and your already in the 44th percentile, I mean if you start at 20 and you worked 20 years and only put in $2k/yr your already almost at the 50th percentile... so if your company matched, then your talking more like $1000/yr and well its household so now your saying couple isnt' even able to put away $500 each? something very sad about that.

 

[devans0]

I see polls like this and realize how blessed we are compared to a lot of people. It came from a lot of hard work, and scrimping at times, but also a lot of luck, too.

 

[Texan1636]

I find this way more difficult because my income streams start at different times. I don't have any guaranteed income stream right now, and won't for at least 7 more years, probably longer. I will get a pension at 65, and start SS sometime between 62 and 70. I haven't found a simpler way to represent that then to calculate a present value for that, and base my withdrawal rate including that value. If I were drawing my pension and SS immediately when I retired, I am pretty sure I would do it your way.

I agree with this. I have a significant pension that won't kick in for >10 years after retirement. We've decided to base our withdrawal off of our assets including an approximation of the NPV of that pension (based on pricing of a deferred annuity purchased now that would start payments when the pension kicks in).