How to value a military pension into NW

[Anonymous]

Anonymous wrote:Why are you asking? Can you live off of it? Otherwise it’s an income source or savings plus health care for life. Take the annuity if you are married or young kids in case you pass first so it goes to them.

It’s a pension paid monthly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m a 51 yo who just retired from the Navy as an O-6 naval aviator after 29 years of service. Does anyone know how to value a military pension with COLA into a Net Worth calculation? Various websites out there with suggestions on how to do this (lump sum, TIPs model, annuity comparison) and obviously you have to make assumptions about your longevity but was wondering if any of the military retirees on DCUM had a formula that “worked” for them. TIA

On another note, you missed the hiring wave.

You be a senior wide body FO or mid-range narrow body CA if you separated at 20.

OP here - appreciate your concern for my “missed” employment opportunities. I stayed in because I wanted to serve my country and liked the naval aviation community and camaraderie despite the inherent risks. Unfortunately, due to some unforeseen medical issues as well as being too senior for most flying tours I wasn’t able to fly the last few years of my Navy career. Those same medical issues prevent me from flying commercially as a civilian. I plan to “retire” and manage our finances and multiple rental properties (two in San Diego, one in Lake Tahoe, and a small condo in Pensacola, FL). My wife and I have done very well investing our income over the years (a few incredible stock picks should helped that) and can FatFIRE if we wanted to.

However, speaking of flying commercially, my lovely and beautiful wife who I met in flight school retired as an O-5 naval aviator over 9 years ago at 20 years of service and is currently a 777 FO for a major airline so I get to enjoy many of those airline perks. We have two 100% eligibility 36 month 9/11 GI Bills that we can gift to our children, two TSP accounts from our military service that have grown quite a lot (no matching funds since we have pensions) plus her airline 401K, Roth IRAs that continue to be funded using the Backdoor Roth process, and multiple taxable investment accounts. I think we’ll be fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m a 51 yo who just retired from the Navy as an O-6 naval aviator after 29 years of service. Does anyone know how to value a military pension with COLA into a Net Worth calculation? Various websites out there with suggestions on how to do this (lump sum, TIPs model, annuity comparison) and obviously you have to make assumptions about your longevity but was wondering if any of the military retirees on DCUM had a formula that “worked” for them. TIA

On another note, you missed the hiring wave.

You be a senior wide body FO or mid-range narrow body CA if you separated at 20.

Not OP but who would do that? Rather stay in than go out. Money not that important.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why are you asking? Can you live off of it? Otherwise it’s an income source or savings plus health care for life. Take the annuity if you are married or young kids in case you pass first so it goes to them.

It’s a pension paid monthly.

I understand what it is. We get it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m a 51 yo who just retired from the Navy as an O-6 naval aviator after 29 years of service. Does anyone know how to value a military pension with COLA into a Net Worth calculation? Various websites out there with suggestions on how to do this (lump sum, TIPs model, annuity comparison) and obviously you have to make assumptions about your longevity but was wondering if any of the military retirees on DCUM had a formula that “worked” for them. TIA

On another note, you missed the hiring wave.

You be a senior wide body FO or mid-range narrow body CA if you separated at 20.

OP here - appreciate your concern for my “missed” employment opportunities. I stayed in because I wanted to serve my country and liked the naval aviation community and camaraderie despite the inherent risks. Unfortunately, due to some unforeseen medical issues as well as being too senior for most flying tours I wasn’t able to fly the last few years of my Navy career. Those same medical issues prevent me from flying commercially as a civilian. I plan to “retire” and manage our finances and multiple rental properties (two in San Diego, one in Lake Tahoe, and a small condo in Pensacola, FL). My wife and I have done very well investing our income over the years (a few incredible stock picks should helped that) and can FatFIRE if we wanted to.

However, speaking of flying commercially, my lovely and beautiful wife who I met in flight school retired as an O-5 naval aviator over 9 years ago at 20 years of service and is currently a 777 FO for a major airline so I get to enjoy many of those airline perks. We have two 100% eligibility 36 month 9/11 GI Bills that we can gift to our children, two TSP accounts from our military service that have grown quite a lot (no matching funds since we have pensions) plus her airline 401K, Roth IRAs that continue to be funded using the Backdoor Roth process, and multiple taxable investment accounts. I think we’ll be fine.

Police, I'd like to report a murder. God damn that is good stuff.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m a 51 yo who just retired from the Navy as an O-6 naval aviator after 29 years of service. Does anyone know how to value a military pension with COLA into a Net Worth calculation? Various websites out there with suggestions on how to do this (lump sum, TIPs model, annuity comparison) and obviously you have to make assumptions about your longevity but was wondering if any of the military retirees on DCUM had a formula that “worked” for them. TIA

On another note, you missed the hiring wave.

You be a senior wide body FO or mid-range narrow body CA if you separated at 20.

OP here - appreciate your concern for my “missed” employment opportunities. I stayed in because I wanted to serve my country and liked the naval aviation community and camaraderie despite the inherent risks. Unfortunately, due to some unforeseen medical issues as well as being too senior for most flying tours I wasn’t able to fly the last few years of my Navy career. Those same medical issues prevent me from flying commercially as a civilian. I plan to “retire” and manage our finances and multiple rental properties (two in San Diego, one in Lake Tahoe, and a small condo in Pensacola, FL). My wife and I have done very well investing our income over the years (a few incredible stock picks should helped that) and can FatFIRE if we wanted to.

However, speaking of flying commercially, my lovely and beautiful wife who I met in flight school retired as an O-5 naval aviator over 9 years ago at 20 years of service and is currently a 777 FO for a major airline so I get to enjoy many of those airline perks. We have two 100% eligibility 36 month 9/11 GI Bills that we can gift to our children, two TSP accounts from our military service that have grown quite a lot (no matching funds since we have pensions) plus her airline 401K, Roth IRAs that continue to be funded using the Backdoor Roth process, and multiple taxable investment accounts. I think we’ll be fine.

Sounds like you are all set. So, why the value. You can always do consulting work since you don’t need the health care.

[Anonymous]

Take the annuity for the kids. Not sure if your wife is eligible to get yours if she has her own.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m a 51 yo who just retired from the Navy as an O-6 naval aviator after 29 years of service. Does anyone know how to value a military pension with COLA into a Net Worth calculation? Various websites out there with suggestions on how to do this (lump sum, TIPs model, annuity comparison) and obviously you have to make assumptions about your longevity but was wondering if any of the military retirees on DCUM had a formula that “worked” for them. TIA

On another note, you missed the hiring wave.

You be a senior wide body FO or mid-range narrow body CA if you separated at 20.

OP here - appreciate your concern for my “missed” employment opportunities. I stayed in because I wanted to serve my country and liked the naval aviation community and camaraderie despite the inherent risks. Unfortunately, due to some unforeseen medical issues as well as being too senior for most flying tours I wasn’t able to fly the last few years of my Navy career. Those same medical issues prevent me from flying commercially as a civilian. I plan to “retire” and manage our finances and multiple rental properties (two in San Diego, one in Lake Tahoe, and a small condo in Pensacola, FL). My wife and I have done very well investing our income over the years (a few incredible stock picks should helped that) and can FatFIRE if we wanted to.

However, speaking of flying commercially, my lovely and beautiful wife who I met in flight school retired as an O-5 naval aviator over 9 years ago at 20 years of service and is currently a 777 FO for a major airline so I get to enjoy many of those airline perks. We have two 100% eligibility 36 month 9/11 GI Bills that we can gift to our children, two TSP accounts from our military service that have grown quite a lot (no matching funds since we have pensions) plus her airline 401K, Roth IRAs that continue to be funded using the Backdoor Roth process, and multiple taxable investment accounts. I think we’ll be fine.

So why did you ask? You are filthy rich. Congrats! Go live your life!

[Anonymous]

Most retirement planning sites plan on a withdrawal rate of 4%/yr. If you’re starting with a monthly amount, multiply that by 12 to get your annual income then divide that by 0.04.

For example if your pension income is $40k/yr, divide that by 0.04 and you get $1 million.

Likewise if your retirement savings is $1 million, multiply by 0.04 to get your annual income = $40,000.

Just say you aim to have an annual income of $120,000 and have a pension that provides $40k/yr, then your savings goal by retirement should be $2 million. Your $120k annual income will be the same as someone who had $3M saved.

Of course this is just for planning purposes.

[Anonymous]

Anonymous wrote:Most retirement planning sites plan on a withdrawal rate of 4%/yr. If you’re starting with a monthly amount, multiply that by 12 to get your annual income then divide that by 0.04.

For example if your pension income is $40k/yr, divide that by 0.04 and you get $1 million.

Likewise if your retirement savings is $1 million, multiply by 0.04 to get your annual income = $40,000.

Just say you aim to have an annual income of $120,000 and have a pension that provides $40k/yr, then your savings goal by retirement should be $2 million. Your $120k annual income will be the same as someone who had $3M saved.

Of course this is just for planning purposes.

This is good practice for determining the income from an investment, sure, but doesn’t really work for the original question - the value of a lifetime income stream. The answer isn’t the wealth that generates it if the wealth evaporates when you die. Pensions are worth less than the equivalent asset calculated as above. The right calculation (there’s a link in an earlier post) withdraws more than 4% so that the equivalent asset reaches a value of zero at your life expectancy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m a 51 yo who just retired from the Navy as an O-6 naval aviator after 29 years of service. Does anyone know how to value a military pension with COLA into a Net Worth calculation? Various websites out there with suggestions on how to do this (lump sum, TIPs model, annuity comparison) and obviously you have to make assumptions about your longevity but was wondering if any of the military retirees on DCUM had a formula that “worked” for them. TIA

On another note, you missed the hiring wave.

You be a senior wide body FO or mid-range narrow body CA if you separated at 20.

OP here - appreciate your concern for my “missed” employment opportunities. I stayed in because I wanted to serve my country and liked the naval aviation community and camaraderie despite the inherent risks. Unfortunately, due to some unforeseen medical issues as well as being too senior for most flying tours I wasn’t able to fly the last few years of my Navy career. Those same medical issues prevent me from flying commercially as a civilian. I plan to “retire” and manage our finances and multiple rental properties (two in San Diego, one in Lake Tahoe, and a small condo in Pensacola, FL). My wife and I have done very well investing our income over the years (a few incredible stock picks should helped that) and can FatFIRE if we wanted to.

However, speaking of flying commercially, my lovely and beautiful wife who I met in flight school retired as an O-5 naval aviator over 9 years ago at 20 years of service and is currently a 777 FO for a major airline so I get to enjoy many of those airline perks. We have two 100% eligibility 36 month 9/11 GI Bills that we can gift to our children, two TSP accounts from our military service that have grown quite a lot (no matching funds since we have pensions) plus her airline 401K, Roth IRAs that continue to be funded using the Backdoor Roth process, and multiple taxable investment accounts. I think we’ll be fine.

Sounds like you are all set. So, why the value. You can always do consulting work since you don’t need the health care.

Since several PPs have asked — I’m working with a private equity firm and they want to know my NW before I can make investments with them when funding calls occur. I assume it’s part of their screening criteria. Wasn’t sure how to value the NW of my pension except what has been previously discussed. Wanted to see if the DCUM crowd had any other ideas. Thanks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m a 51 yo who just retired from the Navy as an O-6 naval aviator after 29 years of service. Does anyone know how to value a military pension with COLA into a Net Worth calculation? Various websites out there with suggestions on how to do this (lump sum, TIPs model, annuity comparison) and obviously you have to make assumptions about your longevity but was wondering if any of the military retirees on DCUM had a formula that “worked” for them. TIA

On another note, you missed the hiring wave.

You be a senior wide body FO or mid-range narrow body CA if you separated at 20.

OP here - appreciate your concern for my “missed” employment opportunities. I stayed in because I wanted to serve my country and liked the naval aviation community and camaraderie despite the inherent risks. Unfortunately, due to some unforeseen medical issues as well as being too senior for most flying tours I wasn’t able to fly the last few years of my Navy career. Those same medical issues prevent me from flying commercially as a civilian. I plan to “retire” and manage our finances and multiple rental properties (two in San Diego, one in Lake Tahoe, and a small condo in Pensacola, FL). My wife and I have done very well investing our income over the years (a few incredible stock picks should helped that) and can FatFIRE if we wanted to.

However, speaking of flying commercially, my lovely and beautiful wife who I met in flight school retired as an O-5 naval aviator over 9 years ago at 20 years of service and is currently a 777 FO for a major airline so I get to enjoy many of those airline perks. We have two 100% eligibility 36 month 9/11 GI Bills that we can gift to our children, two TSP accounts from our military service that have grown quite a lot (no matching funds since we have pensions) plus her airline 401K, Roth IRAs that continue to be funded using the Backdoor Roth process, and multiple taxable investment accounts. I think we’ll be fine.

Sounds like you are all set. So, why the value. You can always do consulting work since you don’t need the health care.

Since several PPs have asked — I’m working with a private equity firm and they want to know my NW before I can make investments with them when funding calls occur. I assume it’s part of their screening criteria. Wasn’t sure how to value the NW of my pension except what has been previously discussed. Wanted to see if the DCUM crowd had any other ideas. Thanks.

They want to see if you are an accredited investor.

Explanation here: https://www.investopedia.com/terms/a/accreditedinvestor.asp

[Anonymous]

This is backwards. The only reason to calculate net worth is to forecast retirement income.

[Anonymous]

Sometimes when my wife gets worked up and says “I’m not sure I’ll make it to 20yrs of servixe”

I respond with “they’re giving you a Starbucks in Xyrs…”

As in - the only comparable certainty of a military pension would be a triple net lease on a Starbucks location somewhere in America. So whatever a Starbucks in Jacksonville FL is selling for - that’s probably your answer

Happy trails LC.

[Anonymous]

Anonymous wrote:This is backwards. The only reason to calculate net worth is to forecast retirement income.

No the Accredited Investor reason above makes sense. It's just unusual because most people won't get into unregistered securities- because they shouldn't, generally.