Putting a value on Military Retirement

[Out-to-Lunch]

Quote:

Originally Posted by Nords I use I bonds for two reasons. First, as far as I can tell they're the easiest proxy to use to check your inflation-adjusted life-annuity math. This may not be rigorous, and you certainly can't buy that many I bonds, but they're an easy proxy.

This makes sense to me so far...

Quote:

Your $27,500 annual income could be delivered by a portfolio of I bonds. This month they're yielding 1.68%, so the value of your pension would be ~$1.6M.

But this does not make sense to me. The portfolio you describe would indeed throw off the inflation-adjusted dividends equal to the pension. However, when you die, your estate would STILL HAVE the I-bonds.

Wouldn't a better comparison be to construct a theoretical ladder of I-bonds out to, say, your life expectancy? For corn's ~35 year horizon, that would cost ~$740k at that I-bond rate.

Or, said another way: If you had $1.6M in the bank, few people would opt to use it to purchase a COLA annuity paying $27.5k.

[WWDog]

I've kept a spreadsheet for several years. Quite detailed calculating my net worth, projecting by month my expenses etc. After several years I came to realize that since I am putting away each month more than I used to make while on active duty. The military retirement and savings in health care etc. is the key to that savings. My grown children will some day inherit a nice bundle that should set them up well.

[Mook1e]

[friar1610]

Quote:

Originally Posted by braumeister I've never even attempted to calculate it, because I see no reason. I look at what I plan to spend, then subtract what I get in military retirement pay (and also what I get in SS now). The remainder is what I'm going to withdraw from my portfolio. A simple (perhaps simple-minded) method.

I’ve always thought the same way about mine.