retire202052
Recycles dryer sheets
- Joined
- Nov 28, 2017
- Messages
- 87
Next year I will be receiving approx. $3100 a month (3% COLA) from my pension at age 52. What would be the value of my pension to use for my net worth next year?
Next year I will be receiving approx. $3100 a month (3% COLA) from my pension at age 52. What would be the value of my pension to use for my net worth next year?
Why would you want to include it? What's the point?
Do you include your other income sources (like salary or social security benefits)?
Just to compare your wealth against pensionless people on the internet of course.
Yup acts just like a fixed income investment except you can't sell the asset. Can't pass it on in your will, it's just yours and if you die tomorrow, so will your pension.
I have considered my pension to be a Phantom Asset. It's there, it's real, the money I get from it is real, it's a solid reason to take a somewhat more aggressive approach to my stock index funds. But, I can't touch it.
I don't include it on my balance sheet, but once a year I do what Running Bum suggested and price an Immediate Annuity to see what it would be worth to me today. That makes me feel better.
What is the purpose of the net worth calculation?Next year I will be receiving approx. $3100 a month (3% COLA) from my pension at age 52. What would be the value of my pension to use for my net worth next year?
Good question, but to be clear, a pension is not comparable to salary. You work for salary. Stop working, then payment stops.Why would you want to include it? What's the point?
Do you include your other income sources (like salary or social security benefits)?
.... Pensions which have been earned (or annuities which have been purchased) are financial assets not dependent on doing work.
Good question, but to be clear, a pension is not comparable to salary. You work for salary. Stop working, then payment stops.
Pensions which have been earned (or annuities which have been purchased) are financial assets not dependent on doing work.
I never understood the need for one to figure out ones net worth. Can someone tell me the usefulness of that metric? Thanks
Easy. I have a target withdrawal rate. I multiply that by my investment net worth to figure out my spending allowance. How else would you decide? Unless you generate enough income to cover all expenses without touching principal? I did not want to work long enough to get to that point.I never understood the need for one to figure out ones net worth. Can someone tell me the usefulness of that metric? Thanks
You likely don't want to plan on a withdrawal rate as a percent of your net worth. Net worth typically includes things (like homes) that cannot be spent in small amounts. Withdrawal rate should be calculated from a narrower set of assets.Easy. I have a target withdrawal rate. I multiply that by my investment net worth to figure out my spending allowance. How else would you decide?