How to value a military pension into NW

[Anonymous]

Anonymous wrote:Why go to a PE firm when you have a generous pension and separate IRA accounts, plus properties? Seems sophisticated but also unnecessary. You easily pass as a couple for the accredited investor with all your assets. That sounds like a sales gimmick, I bet they want your $$$. If you have excess funds, simply construct a portfolio of growth and dividend stocks in a taxable account. Or use ETFs if you like. Your heirs will get a stepped up basis upon your death.

OP here — I’ve had similar thoughts. I haven’t committed yet. Just going through the initial paperwork. Friend of mine referred me to this PE firm so thought I would check it out.

[Anonymous]

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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.

Not a smart move. People who have a lot of money or have been successful in their career fall for this stuff all the time. Having a lot of money doesn't give you any advantage when it comes to acess to investments in this day and age.

OP here — I generally agree with you about the advantages of having money and access to various investments. But frankly I wouldn’t really know since everything we’ve done for investment is fairly basic and straightforward with the exception of a couple of well-researched, below-the-radar stocks (at the time) we bought heavily that went ballistic.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why go to a PE firm when you have a generous pension and separate IRA accounts, plus properties? Seems sophisticated but also unnecessary. You easily pass as a couple for the accredited investor with all your assets. That sounds like a sales gimmick, I bet they want your $$$. If you have excess funds, simply construct a portfolio of growth and dividend stocks in a taxable account. Or use ETFs if you like. Your heirs will get a stepped up basis upon your death.

That’s what we did. Military pension, multiple retirement accounts, no debt and taxable accounts that yield $150,000 yearly in dividends.

No plan to liquidate shares, will pass to our sons w stepped up basis.

Op here - Great job. Our goal is for our investments to produce $500K in passive income when we “retire”. Rental income and dividends produce a large chunk of our “passive” income. We’re really excited about our Roths which have exploded in value due to some great stock picks. The tax-free income those Roths will eventually produce when we reach 59 1/2 in 8 years require very little effort unlike our rentals.

[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.

You two sound insufferable.

They are pretty typical of some officers.

I'm married to a down-to-earth O-6. They don't need to be this way.

[Anonymous]

Anonymous wrote:

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.

You two sound insufferable.

They are pretty typical of some officers.

Especially "naval aviators"...

+1000

We stopped socializing with them 10 years ago, except when mandatory.

[Anonymous]

Why not just take the annual payout amount of the pension and subtract that from your desired annual spend in retirement, and then recalculate how many other assets you'll need based on the desired spend amount that is left uncovered? The math would be easier.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why go to a PE firm when you have a generous pension and separate IRA accounts, plus properties? Seems sophisticated but also unnecessary. You easily pass as a couple for the accredited investor with all your assets. That sounds like a sales gimmick, I bet they want your $$$. If you have excess funds, simply construct a portfolio of growth and dividend stocks in a taxable account. Or use ETFs if you like. Your heirs will get a stepped up basis upon your death.

That’s what we did. Military pension, multiple retirement accounts, no debt and taxable accounts that yield $150,000 yearly in dividends.

No plan to liquidate shares, will pass to our sons w stepped up basis.

Op here - Great job. Our goal is for our investments to produce $500K in passive income when we “retire”. Rental income and dividends produce a large chunk of our “passive” income. We’re really excited about our Roths which have exploded in value due to some great stock picks. The tax-free income those Roths will eventually produce when we reach 59 1/2 in 8 years require very little effort unlike our rentals.

$500,000 passive income a year, plus two military pensions, plus your retirement accounts…. How much do you really need??

I’m the PP from above. We don’t have that much yearly income and cannot spend what we have as it is. No debt, sons out of college. I’m trying to simplify our estate as much as possible (age 55).

Maybe your lifestyle is much bigger than ours…. Are your properties still mortgaged? We owned rental properties in two states but it wasn’t worth the hassle. I much prefer investing in high yielding equities.