Net worth Poll

[Moemg]

I resent the big spread between 2-5 million. Why not give us credit for achieving an important milestone in between. Poll must have been designed by a member of the lumpen proletariat!

That would be me not Lumpen Proletariat but sadly middle class. Sorry ! I did not know how to divide the numbers but if you are somewhere in that category good for you !

 

[steelyman]

It's too bad there is not a choice labeled "Enough". That's what I think most people are after.

 

[traineeinvestor]

It's too bad there is not a choice labeled "Enough". That's what I think most people are after.

Since surveys consistently show that most people believe that a number which is quite a bit higher than what they have would be sufficient, you might not get many takers....but then again this board is populated by people who retired early which implies either deciding that they have enough or belief in the Mayan calendar.

 

[NW-Bound]

Don't recall that one NW. Please do tell the story. I'd love to hear it. I adore stories about people supporting each other

Thank you for the interest, but perhaps it is my fault for making it sounded more exciting that it really was.

We had been continuously working since we got married, and we never thought we would retire early. She first supported my desire to quit the megacorp where I had a really secure position to pursue my dream, which of course later turned out to be a mirage. So, it was simply my turn to tell her that it was OK for her not to suffer fools at her workplace, and we would find a way to survive financially, even if I myself would have to go back to a megacorp full-time.

So far, she has been happy being home, and I am still doing some part-time work now and then.

That would be me not Lumpen Proletariat but sadly middle class. Sorry ! I did not know how to divide the numbers but if you are somewhere in that category good for you !

I think Kcowan was just hinting that he had more than 2 but still less than 5, and had to be lumped in with a lower class.

But look at the distribution. With each breakpoint nearly doubling the previous, it turns out to be nearly a textbook log-normal distribution. Equal intervals may not result in such a beautiful Gaussian curve.

It's too bad there is not a choice labeled "Enough". That's what I think most people are after.

Yes, but in a way, in the end, we have to be happy with what we've got. Or we have to learn to be.

 

[Spanky]

It's too bad there is not a choice labeled "Enough". That's what I think most people are after.

I suspect this choice may get the lowest vote.

 

[Geoffrey]

Numerous discussions have revolved around the question of "how much" does it take to comfortably retire. While this poll does not directly answer that question, it appears that those on this Board who have successfully retired (and presumably done so comfortably) have a typical net worth of over $1M, and that a substantial number have NWs well in excess of that. Further, few members report lavish lifestyles. Perhaps, then, this poll is the best evidence of "how much" it takes to retire and enjoy a comfortable, but not lavish, lifestyle. N'est pas?

 

[calmloki]

As others have pointed out the comfortable, but not lavish (if I may add - LWBYM) lifestyle may be a primary reason for the net worth rather than an effect of it.

 

[Westernskies]

It's too bad there is not a choice labeled "Enough". That's what I think most people are after.

I'm looking for "more than enough"- I don't like the idea of working the high steel without a safety net.

 

[MasterBlaster]

I'm looking for "more than enough"- I don't like the idea of working the high steel without a safety net.

I concur, Especially when the inflation, taxation, SS, and Medicare outlook are so questionable.

 

[GregLee]

Net worth need have nothing to do with lifestyle during retirement. My wife and I, e.g., own our home and have pension income more than sufficient for our needs, so our savings/investments are for other purposes than day-to-day living.

 

[accountingsucks]

I voted and it has gotten me abit down. My # is something I know puts me well ahead of the curve for my age group, but it only makes me realize how so far I have to go for a realistic retirement nest egg.

 

[kcowan]

I think Kcowan was just hinting that he had more than 2 but still less than 5, and had to be lumped in with a lower class.

But look at the distribution. With each breakpoint nearly doubling the previous, it turns out to be nearly a textbook log-normal distribution. Equal intervals may not result in such a beautiful Gaussian curve.

I rent my residence NOTB and own in Mexico. So I need the extra portfolio to support another $40k of rental in expensive Vancouver real estate. So it is just a scoreboard win. In fact, it enabled me to retire 5 years earlier than if I owned my Vancouver condo.

(And BTW the $40k is one hell of a deal for a property valued conservatively at $2.5 million!)

And to Nords question: I do NPV my pensions but the key question is when am I planning to die?!

 

[NW-Bound]

Net worth need have nothing to do with lifestyle during retirement. My wife and I, e.g., own our home and have pension income more than sufficient for our needs, so our savings/investments are for other purposes than day-to-day living.

+1 regarding pension income.

If I remember correctly, in earlier polls, people were instructed to add 25X their annual income, if COLA'ed, or 20X if it is not.

I am above average in the poll, but I do not feel rich due to lack of other income or health benefits. And then, people keep talking about SS being reduced.

 

[calmloki]

Pension value. SS value. how depressing. I've mentioned that while no pension beckons me my anticipated SS monthly benefit should be just about enough to feed a single cat?

Our net worth is a tad on the guesstimation side. Do I use the tax man's value of property? Zillow's? Eppraisal's? Had a real estate agent give her guesstimate on what one of our places would sell for - which was substantially less than I thought was a reasonable price. Suspect that I may become one of those old grizzled landlords, to the benefit of whomever reaps the gain of inheriting at a stepped up basis. Be like one of those land poor farmers.

edit. Wait - health benefits? what are those?

 

[Tiger]

I guess size does matter. I have 4 children, 11 grandchildren & 4 great grandchildren. No brag, just fact.

 

[Westernskies]

Wait - health benefits? what are those?

You obviously didn't work in the public sector.

 

[NW-Bound]

Wait - health benefits? what are those?

Well, due to your, er, more advanced age , you are both closer to the magic age of Medicare than we are, if it is of any consolation.


PS. And here's another silver lining for you. Because you do not expect much SS, you do not need to worry about being "means tested" out of it.

Gee, my sense of humor is so perverted, I am so proud of it!

 

[jacob]

From a retirement perspective, the ratio between net worth and expenses is more interesting as this can be compared directly with withdrawal rates. $1M may sound like a lot, but not if you spend $80k/year.

 

[Amethyst]

All the discussions of net worth and withdrawal rates are beginning to remind me of the characters in Jane Austen's novels - who "have" 500 pounds a year, or 5,000 pounds in the case of a very rich person (and poor widows who have only 10 pounds a year and must take in boarders, sewing, etc.) The "have" is their inherited income...nobody in these novels ever works, except farmers and servants.

P.S. It was from this board that I learned to guess-timate the value of my pension by researching what it would cost me to buy an annuity that produced the same yearly amount. Turned out to be just about 20x, even though my pension will supposedly be COLAd and I am a woman, which I'd think would push up the cost of the annuity.

Amethyst

 

[Spanky]

Net worth need have nothing to do with lifestyle during retirement. My wife and I, e.g., own our home and have pension income more than sufficient for our needs, so our savings/investments are for other purposes than day-to-day living.

Your pension can also be considered as part of your net worth.

 

[rescueme]

Your pension can also be considered as part of your net worth.

No it can't, IMHO.

It only has "value" while you are alive. If it has survivor benefits, it will only have value while the survivor is alive.

It can't be measured or used in a legal sense to show total estate assets, but it does have value if you wish to buy or rent under a retail contract, since those usually require a constant source of income.

It's no different than looking at SS in the same manner. If I die first, my DW will get the increased SS over hers, measured as what I would have received on the day before my death (we're both retired and of SS age). However, once she dies there is no way the "value" can be passed on to our estate beneficiaries.

We provide an updated net worth document to our elder law every year since his firm is in charge of liquidating our estate. "Temporary" income sources are not counted as part of that "estate net worth" but the value of items such as life insurance and SPIA residual value (if we both die before the end of the guaranteed period) do have value.

BTW, if you are still wo*king, do you consider your pay part of your net worth (beyond the portion you are saving/investing)? Pensions/SS are no different.

Just another rehash of an old subject ...

 

[Meadbh]

There are pensions and pensions. I have a defined contribution "pension" which has no guarantees, so it's really just an employer sponsored savings plan. As I am leaving this year, I will get access to it, but I have to turn it into one of three forms of locked in vehicle (not the subject of this thread). That is "money in the bank" and I do count it in my net worth. But it is minuscule. 4% of my lump sum would be cat food.

Someone who has a defined benefit pension (i.e. guaranteed income) is in a much better position than I am because even a relatively low income can be multiplied by the SWR factor (25 @ 4%) to find out what it's real value is (unless you die). If posters with pensions are not including this number, you and I are talking apples and oranges. To replace that pension income, I need to have a higher net worth than people with defined benefit pensions.

When I do my annual calculations at the end of the fiscal year (in a week or two) my NW will be over $3m for the first time. That is, unless we have Armageddon next week.

 

[Moemg]

No it can't, IMHO.

It only has "value" while you are alive. If it has survivor benefits, it will only have value while the survivor is alive.

...

Since most pensions only allow you to have spouses or young children as survivors . I would think most single retirees would opt for the lump sum unless the pension comes with health benefits and then it is a guessing game on whether you will come out ahead .

 

[haha]

I really can't understand the problem here. Any stream of payments has value, and for some purposes it might help you to account for that value. For other purposes, such as collateral, an annuity will rarely have value to the banker. The fact that the stream stops when you die (if your particular pension does do that) will affect the value, but will not make it valueless. And even for the same purpose, different people will assign different value to the pension, depending on an assessment of the payer, the discout rate assumed, etc.

Ha

 

[jdw_fire]

No it can't, IMHO. you have the right to have your opinion but let me point out a few things.

It only has "value" while you are alive. therefore it has value, no quotes required If it has survivor benefits, it will only have value while the survivor is alive.

It can't be measured or used in a legal sense to show total estate assets this is true only from a probate perspective (what i mean by this is that someone who is interested in how your estate will be dispersed after you die wont be interested in knowing about income flows that stop at your death) however such income flows (eg, DB pensions, SS, SPIAs) are of value in such activities as borrowing money etc. as you point out in the following., but it does have value if you wish to buy or rent under a retail contract, since those usually require a constant source of income actually if you have enough liquid assets a constant source of income isnt required, you see the 2 are often interchangable, we often do the same (interchange an income flow with liquid assets) on this board by using the 25x (or 33x or whatever multiplier you are comfortable with) rule.

It's no different than looking at SS in the same manner agreed, SS has value too and not just what you state in the following. If I die first, my DW will get the increased SS over hers, measured as what I would have received on the day before my death (we're both retired and of SS age). However, once she dies there is no way the "value" can be passed on to our estate beneficiaries this is true but that doesnt mean it didnt have value while you and or your wife were living.

We provide an updated net worth document to our elder law every year since his firm is in charge of liquidating our estate since their purpose is specificly liquidating your assets that remain after you die your next sentance follows of course but that doesnt change the fact that while either of you are alive any cash flows you have are valuable. "Temporary" income sources are not counted as part of that "liquidatable estate net worth after death" but the value of items such as life insurance and SPIA residual value (if we both die before the end of the guaranteed period) do have residual value.

BTW, if you are still wo*king, do you consider your pay part of your net worth (beyond the portion you are saving/investing)? Pensions/SS are no different not so, to get income from your job you have to keep working (you are trading human effort for money) but to get income from a pension/SS already earned or a SPIA already purchased all you have to do is stay alive (no trading of labor is required as they are already paid for). if these income streams have no value how can an insurance company collect any money for an SPIA?.

Just another rehash of an old subject ...

comments imbedded above

the only way to try and make a net worth comparison between all the people on this board an apples to apples comparisons is to value all "guaranteed" cash flows and include them. probably the best way to do this valuation is to use the price of an equal SPIA, but using a 25x formula is an easy short cut for a COLAed lifetime income stream.