haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
If you are having another pissing contest, just have someone make up the rules.
Ha
Ha
If you are having another pissing contest, just have someone make up the rules.
Ha
I'll suggest that, for the next similar poll, if the main idea is to get a measure of expected lifestyle in retirement, then the poll should ask about expected retirement income, rather than net worth. Actually, for me, what is of most interest is expected household retirement income, because I'm concerned about the lifestyle also of my wife after I die or, depending, my lifestyle after she dies.
So what you are saying is that DW/my SS income, at a combined rate of $57K/year would be multiplied x 25 (or any number of years you wish, since that income would be at age 66/70 for us) would be worth over $1.4M added to our other "estate gross net worth" amount?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.
I'll agree to the point of if you don't have SS (or substantial SS income) you may have to plan on having other sources of income, including a higher value retirement portfolio, but it brings up another discussion point as related to if you look at SS as a bond and adjust your portfolio to include that future stream vs. today's holdings, e.g. if you treat it as a bond, your current portfolio will be equity heavy in anticipation of that future income and will be subject to more adjustment as time goes on, rather than just stick to an AA specified in your IP using the contents of your portfolio.Not critical stuff, but worth considering, since without SS (which I don't generally plan on getting) I'd have to replace that income some other way, or it will replace income that I've already accounted for and allow me to not draw down my savings by the equivalent amount per month.
This is an intersting point. When I was a teenager and I heard my Dad talk of net worth it just made me feel sad, as it seemed diminishing and pitiful to think of oneself in pure $$ terms."My" net worth is much higher than the net worth of my investments.....
So what you are saying is that DW/my SS income, at a combined rate of $57K/year would be multiplied x 25 (or any number of years you wish, since that income would be at age 66/70 for us) would be worth over $1.4M added to our other "estate gross net worth" amount?
Sounds good, but in the IT term, it's "vaporware" (in otherwords, making a position sound better than it actually is).
Sorry, I'd rather work with "real" current numbers of asset value, not future possibilities based on being alive at a certain age. That's a forecast net worth (same as you do in retirement income planning) but does not represent what your current net worth is, as of this moment in time.
I understand if you are younger and want to make your asset/net worth base look better (heck, I also played the game that way, at one time) but in reality the only thing you can count on is today from a measurment standpoint. The past, is past. The future is not guaranteed. That's why I always look at the question as the term "estate gross net worth" (e.g. before taxes - the same way most folks look at the value of their TIRA's).
Sell now, commit suicide, and die a winnah!SOOOO, a pension has a value today to the holder of that pension... and can be calculated.... true, when he dies, it is gone... but that is in the future..
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.
Just another rehash of an old subject ...
Sorry, I'd rather work with "real" current numbers of asset value, not future possibilities based on being alive at a certain age. That's a forecast net worth (same as you do in retirement income planning) but does not represent what your current net worth is, as of this moment in time.
You're pointing out that some assets have no value to you because you haven't collected them yet.I'll agree to the point of if you don't have SS (or substantial SS income) you may have to plan on having other sources of income, including a higher value retirement portfolio, but it brings up another discussion point as related to if you look at SS as a bond and adjust your portfolio to include that future stream vs. today's holdings, e.g. if you treat it as a bond, your current portfolio will be equity heavy in anticipation of that future income and will be subject to more adjustment as time goes on, rather than just stick to an AA specified in your IP using the contents of your portfolio.
I did that.And yes, including future SS benefits can change an AA. But I don't know any 62-70-year-olds who will go out and load up on equities once they start receiving their SS deposits.
I personally would not include SS or pension(unless lump sum actually in my possession) in net worth calculation. I would just use the monthly income from those and reduce that from my required expenses to figure out what I need to save to FIRE. Future monthly income has no place in net worth calculation IMO.
I'm going to really raise some eyebrows with my retort to the questions posed, but that's something I feel comfortable to do...Say I have $1M in cash and tomorrow I buy SPIA with it. Would my net worth become $1M less tomorrow?
And since SPIA is much less secure than SS stream, I would think if you answer "no" to above question, you should account for SS as part of your NW somehow...
A few thoughts. I would imagine there are significant differences in net worth as reported because:
i) Taxable vs. deferred-taxable accounts. To be accurate, the deferred accounts (IRA/401K etc.) should be net of taxes.
ii) Pensions: at a minimum if to be included they should be net of taxes and adjusted for expected life.
Personally, I would not include pensions/SS in a net worth calculation. A pension cannot be monetized due to death risk.