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Reply to "How to account for pension values in net wroth?"
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[quote=Anonymous]There are calculators and fancy ways of doing it. But if you just want to have a number for guiding your worth, one shorthand is to do a reverse of the 4 percent rule. So if you had a lump sum conservatively invested and spent it down at 4 percent, the classic recommendation, how big would that lump sum be to give you the same income stream? In your case 70k/.04 = 1.75m It isn't an exact comparison - there is different risk associated with a fed pension vs savings (political vs investment), you have to consider whether you will pay for survivor benefits or not, and this doesn't take into account the fact that the pensions ARE different than savings in a lot of ways. But still a good shorthand. [/quote]
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