Value of pension and net worth

[NW-Bound]

Oh, and 30 years ago when we bought a house, and had to provide a list of assets to the mortgage company. They were interested in dividends and interest, but were not at all interested in our eventual pensions.

And now, I read that bankers are more interested in incomes. Some posters reported having to jump through hoops to get mortgage for a home worth a small percentage of their net worth. No pension, no SS? Lordly, how are you going to make the monthly payment? Look at my investable assets. But, but, but you do not show an income stream, so we can compare to the monthly payment.

This was a few years ago after the subprime bubble burst, after those shenanigan years of "no doc" loans. I do not know if the income stream requirement is still true today.

Crazy, crazy stuff. Real life is so weird and interesting, I stopped reading fictions a long time ago.

 

[Amethyst]

We recently mortgaged half the cost of our FL home, while waiting for the house in MD to sell.
The bank required access to our tax returns, so they could verify we had the income to cover the payment.
They also required proof that we had the money for the down payment - we gave them our Vanguard account info.
And they had to have proof that we had no mortgage on the MD home (just checking our credit reports wasn't enough, apparently).

And now, I read that bankers are more interested in incomes. Some posters reported having to jump through hoops to get mortgage for a home worth a small percentage of their net worth. No pension, no SS? Lordly, how are you going to make the monthly payment? Look at my investable assets. But, but, but you do not show an income stream, so we can compare to the monthly payment.

This was a few years ago after the subprime bubble burst, after those shenanigan years of "no doc" loans. I do not know if the income stream requirement is still true today.

Crazy, crazy stuff. Real life is so weird and interesting, I stopped reading fictions a long time ago.

 

[NW-Bound]

Financial vetting is good and necessary. However, it appeared that they did not know how to evaluate different financial situations. Perhaps they do now.

 

[Big_Hitter]

Financial vetting is good and necessary. However, it appeared that they did not know how to evaluate different financial situations. Perhaps they do now.

not sure - I just got a heloc and all they cared about was LTV and income - they could care less about assets

 

[2retireearly]

This is simply a present value calculation using your life expectancy, (I assumed you as Male) and an assumed interest rate (I used latest treasury rate 2.92) and a cola =4%, and set it up to pay out today. I get 1,161,964. But..its all based on your life expectancy. Is there a set Death Benefit? Ah...this makes me miss my job...loved actuarial formulas and programming...But..bottom line..this is not your net worth..you could die tomorrow..so using this life expectancy for a finite dollar amount, is meaningless. But..its a fun amount to know.

 

[Tyrone]

This is simply a present value calculation using your life expectancy, (I assumed you as Male) and an assumed interest rate (I used latest treasury rate 2.92) and a cola =4%, and set it up to pay out today. I get 1,161,964. But..its all based on your life expectancy. Is there a set Death Benefit? Ah...this makes me miss my job...loved actuarial formulas and programming...But..bottom line..this is not your net worth..you could die tomorrow..so using this life expectancy for a finite dollar amount, is meaningless. But..its a fun amount to know.

COLA of 4%? Man, I would have loved to take out an annuity with your company!

 

[retire202052]

This is simply a present value calculation using your life expectancy, (I assumed you as Male) and an assumed interest rate (I used latest treasury rate 2.92) and a cola =4%, and set it up to pay out today. I get 1,161,964. But..its all based on your life expectancy. Is there a set Death Benefit? Ah...this makes me miss my job...loved actuarial formulas and programming...But..bottom line..this is not your net worth..you could die tomorrow..so using this life expectancy for a finite dollar amount, is meaningless. But..its a fun amount to know.

Great formula. I plan on taking my pension next year at age 52. My cola is 3% and I have a spousal benefit. Once I start receiving it, I'll include it in my NW based on either me or my wife living to 70. So based on 18 years.