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Old 01-14-2021, 07:49 PM   #61
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The newsweek data/article and the fed's data aren't reconcilable--the former's richest state doesn't meet the latter's national number for top 1%.

As others have said, we are happy with where we are at, no matter what percentile that slots us into.
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Old 01-14-2021, 08:01 PM   #62
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I came here to feed my ire against the evil 1%ers, then read the Newsweek link to find out I am one

dammit
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Old 01-14-2021, 08:49 PM   #63
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Here is a Newsweek article about the minimum NW required to be in the top 1% by State. I don't have any idea if this is comparable to the data posted by the OP.

"The analysis used population estimates from the 2019 U.S. Census Bureau and net worth estimates from Windfall's wealth database of more than 80 million households. For each state, the minimum net worth required to qualify in the top 1 percent for that state is included, along with the median net worth of all homeowners with a primary residence in that state, and total homeowners with a net worth of $1 million or more. Net worth represents an individual's assets like homes, cars, and investments, less their liabilities like and other debt."

California -$6.8M
Georgia - $2.2M

Very interesting data. While many data points can be expected, quite a few states are not as wealthy as I thought.
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Old 01-14-2021, 09:08 PM   #64
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I wonder if the value of any pension or SS payment is added to these net worth rankings.
According to the links provided by MichaelB in post#22, "net worth" in this study does not include the NPV of DB pensions or SS:

Quote:
Unfortunately, future income streams from OASI and DB plans cannot be translated directly into a current value because valuation depends critically on assumptions about future events and conditions—work decisions, earnings, inflation rates, discount rates, mortality, and so on—and no widely agreed-upon standards exist for making these assumptions.
It does seem to include so-called quasi-liquid, account-type pensions, which I interpret to mean DC or hybrid type pensions that have an easily-quantifiable cash redemption value, which is likely to be portable across jobs..

Financial assets also include the current cash value of whole life insurance, as well as annuities and trusts where there is an equity interest, not just the right to receive a stream of income. Financial assets also include oil and gas leases, futures contracts, royalties, proceeds from lawsuits or estates in settlement, and loans made to others. Interestingly, it specifically excludes employment-related stock options because:

Quote:
...such options are typically not publicly traded or their execution is otherwise constrained, their value is uncertain until the exercise date; until then, meaningful valuation would require complex assumptions about the future behavior of stock prices.
Lastly, non-financial assets include not just the primary home but vehicles, including: cars, trucks, RVs, motorcycles, boats, airplanes, and helicopters. It also includes vacation homes, rental properties, and the net equity value of businesses.

No mention as to whether tax-deferred accounts are valued at gross pre-tax amounts or after tax. My guess would be the former, just based on the difficulty of estimating the latter.

All in all, I'd say it's a well-reasoned definition for the purpose of the study. Although I don't really think it's all that difficult to calculate a reasonable NPV of a DB pension, annuity, or SS. It would be a much more complete and meaningful study of comparative wealth if those items were included. Also, when working, I valued employee stock options using current stock value (minus tax). This was much more meaningful and useful compared to zero, until exercise date. That's just goofy.
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Old 01-14-2021, 10:17 PM   #65
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Well according to the Newsweek article we are in the 1% in SC, but sure doesn't feel like it.
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Old 01-14-2021, 10:42 PM   #66
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Well according to the Newsweek article we are in the 1% in SC, but sure doesn't feel like it.
I never does seem to “feel like it”. But, when you take some time to reflect, you realize how much different it is for you compared to others and compared to yourself before you had substantial wealth.

It’s kind of like looking in the mirror at yourself all your life. Your logical brain knows you’re getting older, part of you just sees the same person.

I’m not at the 1% but I struggle with the same feelings. I think it also has to do with expectations. Maybe we expected some magical change when we became FI, but you still feel pressure financially even if self imposed, so that magical day never really comes.
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Old 01-14-2021, 10:45 PM   #67
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We do have to remember that the majority of all those households are still w*rking, not retired and certainly not early retired as we are. Of more significance would be retiree household percentages, which would then reflect the amounts owned by households that are “finished”, not working to get there. If the numbers were/are still similar, then wouldn’t it just seem wrong, that we in this small group, who consistently claim to be comfortable but certainly not rich, are in the top 10%ish , meaning that 90% are not comfortable and do not have secure retirements? I KNOW most are not set, and most depend entirely on SS. It just seems like a fail that so many are so lackadaisical about their futures.
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Old 01-14-2021, 10:47 PM   #68
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Well according to the Newsweek article we are in the 1% in SC, but sure doesn't feel like it.
It’s a hard feeling to adapt to. We’re in the top 1% for our state too. My husband was out today and really wanted a Whopper. When I asked him why he didn’t stop and get one he said, “I was going to but I didn’t have any coupons with me!”

He cracks me up. Old habits are hard to break.
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Old 01-14-2021, 11:37 PM   #69
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Old 01-14-2021, 11:51 PM   #70
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It’s a hard feeling to adapt to. We’re in the top 1% for our state too. My husband was out today and really wanted a Whopper. When I asked him why he didn’t stop and get one he said, “I was going to but I didn’t have any coupons with me!”

He cracks me up. Old habits are hard to break.
That's how we made it to FIRE , coupon's to retirement
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Old 01-15-2021, 05:15 AM   #71
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I am assuming uphill both ways.....
In a snow storm? Oh wait, that was walking to school back in the day. LOL
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Old 01-15-2021, 05:26 AM   #72
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When we did our estate planning, the attorney documented our net worth based on investable assets, savings bonds, retirement accounts (including tax-deferred annuity accounts, which can be redeemed for cash minus taxes), value of home(s) and personal property (had me estimate the sale value of my jewelry, for example). Our Federal pensions were not included, because they can't be sold, borrowed against, or inherited.

The pensions do have a "value" compared with the current cost of an inflation-indexed annuity producing the same monthly income for someone of the same age. That value is, naturally, diminishing as we age. It's tempting to include it, though, because the income is certainly there, and a person with no pension would need real assets to generate it. But the "assets," in our case, were the years we served and paid into the pension fund...and those are gone.

Quote:
Originally Posted by Cobra9777 View Post
According to the links provided by MichaelB in post#22, "net worth" in this study does not include the NPV of DB pensions or SS:

It does seem to include so-called quasi-liquid, account-type pensions, which I interpret to mean DC or hybrid type pensions that have an easily-quantifiable cash redemption value, which is likely to be portable across jobs..

Financial assets also include the current cash value of whole life insurance, as well as annuities and trusts where there is an equity interest, not just the right to receive a stream of income. Financial assets also include oil and gas leases, futures contracts, royalties, proceeds from lawsuits or estates in settlement, and loans made to others. Interestingly, it specifically excludes employment-related stock options because:



Lastly, non-financial assets include not just the primary home but vehicles, including: cars, trucks, RVs, motorcycles, boats, airplanes, and helicopters. It also includes vacation homes, rental properties, and the net equity value of businesses.

No mention as to whether tax-deferred accounts are valued at gross pre-tax amounts or after tax. My guess would be the former, just based on the difficulty of estimating the latter.

All in all, I'd say it's a well-reasoned definition for the purpose of the study. Although I don't really think it's all that difficult to calculate a reasonable NPV of a DB pension, annuity, or SS. It would be a much more complete and meaningful study of comparative wealth if those items were included. Also, when working, I valued employee stock options using current stock value (minus tax). This was much more meaningful and useful compared to zero, until exercise date. That's just goofy.
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Old 01-15-2021, 06:14 AM   #73
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Many of us with Megacorp pensions were offered lump sums, but chose the annuity as the NPV significantly exceeded the buyout offer. It just seems odd that this decision significantly decreased our net worth using the current definition.

It doesn't really matter as NW is just a "keeping up with Joneses" metric, but I know a few Joneses with large pensions but relatively modest savings who keep up with the 1% just fine.
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Old 01-15-2021, 06:49 AM   #74
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Based on home values and conspicuous consumption, we would seem to be the "poor people" in our neighborhood. Which is fine with us.
Yes - but the corresponding home values on the island in your neighborhood can be a bit eye-watering.
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Old 01-15-2021, 06:52 AM   #75
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We do these threads periodically, and I confess to reading them with interest. But, all these statistics are meaningless.

Do yo have enough?

Are you Happy?

Is your family well cared for?

If yes to the above:

Then you are in the top whatever percent you want to be.
Spot On!
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Old 01-15-2021, 07:03 AM   #76
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Originally Posted by Joylush View Post
It’s a hard feeling to adapt to. We’re in the top 1% for our state too. My husband was out today and really wanted a Whopper. When I asked him why he didn’t stop and get one he said, “I was going to but I didn’t have any coupons with me!”

He cracks me up. Old habits are hard to break.
Ha ha! Although there may be other good reasons to skip that Whopper!
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Old 01-15-2021, 08:14 AM   #77
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I'm going to assume that by choosing where to live, you have surrounded yourself with others who have just as much, or consume as if they did.
Have you driven through a median-income neighborhood recently? You may feel more like 1% there.

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Well according to the Newsweek article we are in the 1% in SC, but sure doesn't feel like it.
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Old 01-15-2021, 08:17 AM   #78
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Not to mention the lifestyles. Most of the people who own those eye-watering places don't even live there during the summer.

Our first winter here, I wondered to see so few out-of-state license plates, even as the traffic tripled. It's because so many have managed to declare Florida residency for tax purposes, while maintaining residences elsewhere.

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Yes - but the corresponding home values on the island in your neighborhood can be a bit eye-watering.
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Old 01-15-2021, 08:20 AM   #79
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The melancholy prospect of extremely expensive long-term care keeps us from spending in 1-percenty style. The Joneses may sniff, but they won't be the ones cleaning us up and stopping us from wandering away into traffic.

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It doesn't really matter as NW is just a "keeping up with Joneses" metric, but I know a few Joneses with large pensions but relatively modest savings who keep up with the 1% just fine.
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Old 01-15-2021, 08:49 AM   #80
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We do have to remember that the majority of all those households are still w*rking, not retired and certainly not early retired as we are. Of more significance would be retiree household percentages, which would then reflect the amounts owned by households that are “finished”, not working to get there. If the numbers were/are still similar, then wouldn’t it just seem wrong, that we in this small group, who consistently claim to be comfortable but certainly not rich, are in the top 10%ish , meaning that 90% are not comfortable and do not have secure retirements? I KNOW most are not set, and most depend entirely on SS. It just seems like a fail that so many are so lackadaisical about their futures.
Yes, the lifecycle of net worth is real and early-career people will always be in the lowest percentiles. We spend our whole lives accumulating net worth (or for some, spending/squandering net worth). And when looking at data in percentiles, guess what? There is always a top 1% and bottom 10%!

I did want to comment on your assertion that "most depend entirely on SS." That didn't sound right to me and a quick search suggests that based on census data it is really somewhere between 12% and 20%, depending on definitions. Here's one fact check: https://www.forbes.com/sites/andrewb...h=4689d5ea2db4
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