Net worth calculator

[TheWizard]

I don't believe that Net Worth is equivalent to "your estate after you pass away" as it doesn't include life insurance.

Net Wealth may be ok for young people, but it is not a useful measure of wealth for older retirees who often have pensions and SS.

Actually, I'm pretty sure that Net Worth DOES include lfe insurance in force on the date of your demise.

And I'm an older retiree with significant pension/annuity + SS income to the extent that I'm investing excess income most months rather than drawing down my nest egg by some SWR.
So yes, whatever my current Net Worth is has little bearing on my monthly finances.

Having said that, we need to be aware that there are low-income retirees who pay rent rather than own their home, so I'm sure it matters to them what their Investible Assets are in addition to their modest SS payment...

 

[Sojourner]

The article comes across as something hastily thrown together without much effort or fact-checking. It contains this gem of obviously bad data:

• Number of individuals with a net worth between $5 million and $30 million, Ultra High Net Worth, UHNW = 821,596 individuals
• Number of individuals with a net worth greater than $30 million, Very High Net Worth, VHNW = 830,520 individuals

Even the most perfunctory proof-reading of the article would have noticed that there cannot possibly be fewer people in the $5MM-$30MM group than in the $30MM+ group!

 

[Car-Guy]

The article comes across as something hastily thrown together without much effort or fact-checking. It contains this gem of obviously bad data:


Even the most perfunctory proof-reading of the article would have noticed that there cannot possibly be fewer people in the $5MM-$30MM group than in the $30MM+ group!

+1

I saw that and it seemed odd to me too.

 

[rodi]

From reading the link it appears to be networth for INDIVIDUAL, not household.

Still came out with a big percentage.

Further down in the article it talks about HOUSEHOLD incomes, most expensive cities, etc...

That led me down a rabbit hole of AMI (area median income)... which is an interesting metric since a lot of services like inclusionary housing are based on the metric. My county breaks it down by household size... so AMI for 1 person is $81,750, for a 2 person household it's $93450. Link. With kids in college we're a family of 4, and our household income is pretty close to the 80% AMI ($110,250), so we would qualify for low income housing, lol... But our networth is high enough we'd much rather live in our paid off home. LOL.

Disclaimer - I'm very interested in this stuff because the city is currently up-zoning my area of the city, and I've been on the planning group subcommittee for 5 years working on this. (When I say working on, I mean submitting input that the city ignores). We have advocating for requiring MORE inclusionary housing because market rate housing is too expensive for dual income households. AMI is a much discussed figure in these discussions.

 

[Sojourner]

That led me down a rabbit hole of AMI (area median income)... which is an interesting metric since a lot of services like inclusionary housing are based on the metric. My county breaks it down by household size... so AMI for 1 person is $81,750, for a 2 person household it's $93450. Link.

Hmm, interesting. I had never heard of the AMI metric until now. I looked it up for my county using the Fannie Mae AMI Lookup Tool, and it's $103,000... which seems crazy high to me! But I believe this must be median household income, not individual income. There is no way that half of all individuals in my county make over $103k.

 

[USGrant1962]

The article comes across as something hastily thrown together without much effort or fact-checking. It contains this gem of obviously bad data:


Even the most perfunctory proof-reading of the article would have noticed that there cannot possibly be fewer people in the $5MM-$30MM group than in the $30MM+ group!

That. I didn't double check but they claim the data is from Census which uses households, not individuals. Sloppy author. I don't think any source compiles individual net worth - too difficult to figure out on a survey.

 

[tmm99]

Don't put real numbers. Put in much lower numbers, like 100K, 200K, 300K, etc. They came back 10%, 20%, 30%.

I think this calculator is totally bogus.

 

[HI Bill]

This household net worth calculator is based on Federal SCF data, and it's more granular:

https://dqydj.com/net-worth-percentile-calculator/

 

[mathjak107]

^If you get down to including a chain saw, you also should include liabilities like paying "got-junk" to empty out your house of stuff nobody wants.

not only that but once someone starts creating lump sum values of future income streams as part of net worth , well what about future liabilities

 

[Ultrac]

not only that but once someone starts creating lump sum values of future income streams as part of net worth , well what about future liabilities

I don't think Net Wealth is a useful concept for retirees with pensions and SS as it does't indicate how much effective wealth someone has.

Some can have more Net Wealth but only be able to support a much lower lifestyle because they don't have a pension. So I think pensions should be part of determining how wealthy someone is - let's call it Effective Wealth.

 

[rk911]

not only that but once someone starts creating lump sum values of future income streams as part of net worth , well what about future liabilities

Precisely...which is why our net worth is based on what we have in our 'pockets', garage, in our home, real property or in the bank. Our pensions and SS are counted in our NW only when the monthly payment hits the bank.

 

[Car-Guy]

I don't think Net Wealth is a useful concept for retirees with pensions and SS as it does't indicate how much effective wealth someone has.

Some can have more Net Wealth but only be able to support a much lower lifestyle because they don't have a pension. So I think pensions should be part of determining how wealthy someone is - let's call it Effective Wealth.

+1

I've argued that exact point here ~100 times with minimal acceptance. Of course I don't really care since to me it counts! Some may call it "guaranteed" deferred income/wealth.

 

[TheWizard]

I don't think Net Wealth is a useful concept for retirees with pensions and SS as it does't indicate how much effective wealth someone has.

Some can have more Net Wealth but only be able to support a much lower lifestyle because they don't have a pension. So I think pensions should be part of determining how wealthy someone is - let's call it Effective Wealth.

No.
I've already spoken about this.
If you have a certain Net Worth and a NEGATIVE withdrawal rate, then you're in a lot better situation than someone with a similar Net Worth and a 4% withdrawal rate...

 

[youbet]

Precisely...which is why our net worth is based on what we have in our 'pockets', garage, in our home, real property or in the bank. Our pensions and SS are counted in our NW only when the monthly payment hits the bank.

Yep. You’re using the measurement of “net worth” as intended and is customary.

 

[youbet]

I don't think Net Wealth is a useful concept for retirees with pensions and SS as it does't indicate how much effective wealth someone has.

Some can have more Net Wealth but only be able to support a much lower lifestyle because they don't have a pension. So I think pensions should be part of determining how wealthy someone is - let's call it Effective Wealth.

But we’re not discussing how wealthy someone is. We’re talking about calculating their net worth at a point in time.

 

[mathjak107]

But we’re not discussing how wealthy someone is. We’re talking about calculating their net worth at a point in time.

that is how i view net worth , its a snap shot in time not the future .

i wouldn’t count future income from my job anymore then i would assign some lump sum value to my pension or ss .

i mean if one is counting future income or the potential for a lump sum which hasn’t been taken like a pension buyout , then it isn’t present in this snap shot in time yet .

i don’t get involved in taking part in net worth questions as to me they lack any standard as far as what each of us wants to count

 

[ShokWaveRider]

If including one's home in one's net worth, do not forget to include selling and closing costs. In our case it would be over $100k.

 

[tryan]

Just for giggles I added 15 years of SS and my pension .... Only moved the dial 1%

 

[Lewis Clark]

Just for giggles I added 15 years of SS and my pension .... Only moved the dial 1%

Nice to be high up there ... !

 

[BearD]

Anyone know where to find a calculator that will do the same for your state?

 

[Flieger]

It amazes me the continuing saga/debate on NW.

It really is simple: Assets minus Liabilities.

All the consternation on what is used for withdrawal rate, etc are individual determinations. I don't use NW to determine WR, but that doesn't change the calculation for NW.

Flieger

 

[mathjak107]

unless there are guidelines when one posts net worth as to what is being included it’s a waste of time responding .

with no guidance as to what everyone is going to count then it’s just a personal number that shouldn’t be compared in my opinion to anyone else’s number publicly

 

[TheWizard]

unless there are guidelines when one posts net worth as to what is being included it’s a waste of time responding .

with no guidance as to what everyone is going to count then it’s just a personal number that shouldn’t be compared in my opinion to anyone else’s number publicly

Flieger just gave perfect guidance in #46...

 

[mathjak107]

you can ask 100 people here what they would include and get 100 different answers .

on a personal level who cares what anyone counts .

but if one is going to take the time to respond to a survey in a forum or on line it’s a waste of time unless we are on the same page as far as what should be counted for this purpose

you have people who always want to add future values of pensions or social security but don’t include future liabilities

 

[Ultrac]

you can ask 100 people here what they would include and get 100 different answers .

on a personal level who cares what anyone counts .

but if one is going to take the time to respond to a survey in a forum or on line it’s a waste of time unless we are on the same page as far as what should be counted for this purpose

you have people who always want to add future values of pensions or social security but don’t include future liabilities

If a person with whatever investments or future liabilities was given a free $100K a year COLAed pension are they effectively wealthier or not?