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Old 09-07-2014, 10:40 AM   #21
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I track total net-worth but also track how much in each bucket (pre, post, taxable).
We converted some 401k to Roth in the years when the market was down. Total networth trend was not looking good but we also knew we had shifted some from pre to post tax which was a good thing. We don't assume a marginal tax rate for a "net" number since there are too many unknowns but I give a certain % mental hair-cut to pre-tax/401k.
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Old 09-07-2014, 10:49 AM   #22
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I'm in this camp:

Quote:
Originally Posted by Gumby View Post
Calculating net worth at any particular point in time is pretty much just an academic exercise. For retirement planning, I simply gross up my income needs to account for taxes.
Honestly, I don't even USE net worth. I just compute a percentage of my investible assets, and taxes must come out of that percentage. I leave my house and so on completely out of this.
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Old 09-07-2014, 11:05 AM   #23
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95% of my holdings are post-tax.

Makes it easier to move around too, no government trying to chase me with regulations and such.
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Old 09-07-2014, 11:42 AM   #24
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I'm very conservative, so when I think of net worth, I think of turning everything I own into a giant pile of $1 bills and rolling around in it. So I do accrue deferred taxes as a balance sheet liability next to each of my tax deferred accounts.

I accrue the tax deferral at a rate of 48%...about my marginal tax rate. It sits on my balance sheet just like the mortgage on my house did. ("Did"...past tense...still makes me smile ).

To the many posts, this is undoubtedly a ridiculously conservative way to think about it...but when I say I'm "done", I want to be done. No down side surprises.

I'm now searching for other, future expenses that I should stick on the "future me" balance sheet and start hammering on. There are likely two weddings in the future and my daughter watches those d*mn bride shows every day...probably ought to accrue big for those...
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Old 09-07-2014, 12:06 PM   #25
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. . .those d*mn bride shows . . .
I have often thought that the prospective groom should be given a tape of his betrothed appearing on the show, so he can run for the hills before it's too late.
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Old 09-07-2014, 01:04 PM   #26
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I have often thought that the prospective groom should be given a tape of his betrothed appearing on the show, so he can run for the hills before it's too late.
Amen
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Old 09-07-2014, 02:20 PM   #27
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I print out a version of "net worth" as part of my retirement projections I don't use it for anything. I simply use 85% of pre-tax accounts for that. That makes Roth conversions look more reasonable.
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Old 09-07-2014, 02:22 PM   #28
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I don't take into account any taxes on the tIRA value. Maybe when I begin taking withdrawals from it in at least 8 years from now I'll think differently.
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