In 2019, I will begin taking distributions from an asset that I've always included in our net worth - the value of a deferred comp plan investment. I decided to estimate our WR for 2019 and wasn't sure which approach is more correct:
- Should I exclude the distributions I'll be taking from withdrawals (numerator), and exclude the asset value from the denominator?
- Or should I include the distributions in the numerator and include the asset in the denominator?
I calculated it both ways - the first way our estimated WR is 3.4% and the second way it's 4.1%. Not sure which way is more valid, but I'm thinking probably I should exclude both the withdrawals and the asset. I haven't included an estimated NPV of the pension I haven't started yet or SS payments in our assets, so I suppose perhaps I should not include the deferred comp balance either.
Please comment. Thanks!
- Should I exclude the distributions I'll be taking from withdrawals (numerator), and exclude the asset value from the denominator?
- Or should I include the distributions in the numerator and include the asset in the denominator?
I calculated it both ways - the first way our estimated WR is 3.4% and the second way it's 4.1%. Not sure which way is more valid, but I'm thinking probably I should exclude both the withdrawals and the asset. I haven't included an estimated NPV of the pension I haven't started yet or SS payments in our assets, so I suppose perhaps I should not include the deferred comp balance either.
Please comment. Thanks!