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Old 01-09-2019, 02:52 PM   #121
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Originally Posted by RunningBum View Post
For one thing, a $30,000 pension that you won't be getting for 20 years isn't the same as a $30K pension that you get today.
I must have missed this was a deferred annuity.
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Old 01-09-2019, 04:10 PM   #122
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Originally Posted by akck View Post
Just before my wife retired, we decided to get a HELOC just in case. As part of the process, the bank wanted a copy of my determination letter from the pension fund, so they are interested in the income stream. I had just thrown it in a stack of papers, but now they’re filed away with our retirement papers for future use.
Agreed. Pension is part of income - which banks are more interested in. Not NW.
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Old 01-09-2019, 04:57 PM   #123
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This thread has been interesting to follow. I don't have a pension and when I start SS I personally won't use that pension in my numbers. I do include IRA's, 401K, Mutual Fund accounts, CD's and cash to see where I am at with my portfolio. NW I have no idea what it is, because I don't really know for sure. My home and ranch and all the other assets who really knows what they are worth till you sell. I have an idea but how can you come up with a true honest number?
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Old 01-10-2019, 07:59 AM   #124
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This thread has been interesting to follow. I don't have a pension and when I start SS I personally won't use that pension in my numbers. I do include IRA's, 401K, Mutual Fund accounts, CD's and cash to see where I am at with my portfolio. NW I have no idea what it is, because I don't really know for sure. My home and ranch and all the other assets who really knows what they are worth till you sell. I have an idea but how can you come up with a true honest number?
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Old 01-10-2019, 08:11 AM   #125
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^ thanks. I don't always use the right terminology or explain in terms that people understand. You can say IRA's and 401K's are pensions but in my case I don't take any funds from them or will I use them as a pension. I will have to do the RMD at some time but most likely the distributions will go back into investing.
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Old 01-10-2019, 09:13 AM   #126
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Originally Posted by RunningBum View Post
It's easy enough to ignore a thread if you don't care to see it. It won't even pop up on the list anymore.

For me, how to account for my future pension and SS is something I'm least sure I'm calculating correctly. Some say considering it in my net worth (with respect to calculating my withdrawal amount allowed) is incorrect, but I've yet to see a good alternative. So I'll continue to throw it in as an asset based on what it would cost to buy a similar annuity until someone comes up with a better way. Once I start taking them, I'll just take it out of my net worth and use at as a reduction of expenses, and calculate my withdrawal to cover the rest.
You are misconstruing my comment. If you have a pension (like DW and I do) that gives you a positive cash flow, how would you value it? The same way as a either a income source or a asset source, as a rental property (as DW and I do)?

I, for one, do not include rental income as portfolio income in my plan, despite receiving $8-22k/year. The rentals have to be cash positive and stand alone, but I do count their cost as part of my asset/net worth. They have gone up in value, but I use their cost in my balance sheet.

Conversely, i do not count our pensions as assets, as they can very well be bankrupt or reduced. They both are joint lived. But I do count their cashflow as part of my plan as they are immediately paying cash.

When I created my FIREplan, DW and I were living comfortably on our net salaries. After monitoring expenses for three years, I created my plan to provide the same pre-FIRE income with a 5% boost each year.

And the same thing can be said for placing a value on SS benefits. They provide an income for some, but for those of us not collecting benefits yet, it would be difficult as we don't know exactly when we would file, or whether the benefit would be trimmed, means tested or one of us croaks.
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Old 01-10-2019, 11:59 AM   #127
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I've never found it reasonable to count my pensions and SS monthly income as part of my NW. For that matter, I have never found my NW number to be of much value.

Cash is king. The income that I receive from my pensions, SS, and RMD annually pays for more than what my expenses actually are. What to do with the overage? I just stash it in my PMMF and let it collect 2.44% (currently) awaiting me to unleash it so I can spend it on future fun.


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Old 01-10-2019, 02:49 PM   #128
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To me NW is what's left if I were to get struck by lightning tomorrow.
Cash flow and NW is not the same thing at all.
It would be like counting your future paychecks from a job as net worth?
Again / just the way I see it. Assets V.S. Liabilities.
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