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Re: Vanguard Now Offering Inflation-Adjusted Annui
Old 01-09-2005, 10:17 AM   #21
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Re: Vanguard Now Offering Inflation-Adjusted Annui

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The calculator shows the lump sum I would have to invest now to begin drawing an immediate annuity benefit equal to my pension. *If I didn't have the pension then my net worth would have to be higher by that lump sum to produce that same guarenteed income stream. *Right?
Yep, that's how I do it too.
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Re: Vanguard Now Offering Inflation-Adjusted Annui
Old 01-10-2005, 09:58 AM   #22
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Re: Vanguard Now Offering Inflation-Adjusted Annui

Grumpy, JWR or Bob;
Once you have the value of you pension in dollar terms via the annuity calculator, do you use that figure to set asset allocations in the rest of your portfolio? If so, do you count the pension/annuity as fixed income -- perhaps like treasuries? Or is it more about having the satisfaction of knowing what the value of the hard-earned pension actually is?

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Re: Vanguard Now Offering Inflation-Adjusted Annui
Old 01-10-2005, 11:24 AM   #23
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Re: Vanguard Now Offering Inflation-Adjusted Annui

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Grumpy, JWR or Bob;
Once you have the value of you pension in dollar terms via the annuity calculator, do you use that figure to set asset allocations in the rest of your portfolio? If so, do you count the pension/annuity as fixed income -- perhaps like treasuries? Or is it more about having the satisfaction of knowing what the value of the hard-earned pension actually is?

I treat the value of the pension as a big slug of fixed income. Therefore I have a very low allocation to any other fixed income investments. Put another way, if I ignore the pension, my allocation to stocks is 75%.

It is also nice to know the value of the "hard earned pension".

Grumpy
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Re: Vanguard Now Offering Inflation-Adjusted Annui
Old 01-10-2005, 12:35 PM   #24
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Re: Vanguard Now Offering Inflation-Adjusted Annui

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Grumpy, JWR or Bob;
Once you have the value of you pension in dollar terms via the annuity calculator, do you use that figure to set asset allocations in the rest of your portfolio?..Or is it more about having the satisfaction of knowing what the value of the hard-earned pension actually is?
My pension is more than sufficient to meet my needs. I use such calculations to satisfy my curiosity.

More often, I use it to help others as they make their own plans.

Have fun.

John R.
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Re: Vanguard Now Offering Inflation-Adjusted Annui
Old 01-10-2005, 01:14 PM   #25
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Re: Vanguard Now Offering Inflation-Adjusted Annui

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Grumpy, JWR or Bob;
Once you have the value of you pension in dollar terms via the annuity calculator, do you use that figure to set asset allocations in the rest of your portfolio? *If so, do you count the pension/annuity as fixed income -- perhaps like treasuries? *Or is it more about having the satisfaction of knowing what the value of the hard-earned pension actually is?
For me it's all about knowing the value. The only way I can compare my situation relative to those who have no pension is to include the pension's value in my net worth. I don't add it to my fixed income allocation like Grumpy does.
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