Reply to Top 1% of Retirees Have 16.7M

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]How do you calculate a pension for total retirement assets?[/quote]

There are several ways and it depends on the type of pension. This is a good, if dense, explanation: https://andrewmarshallfinancial.com/what-is-a-pension-worth/

It gets easier to value a pension as you get closer to age of retirement to earn the full pension. I am 5 years out now, so I have a good idea of what my initial pension payment will be (mine is 60% of the average of the top three years of earnings, so I can extrapolate fairly easily based on current salary). My pension is inflation adjusted as well, so I follow the calculations at the link for inflation adjusted pensions.[/quote]

I do not think it makes sense to add pensions to net worth calculations. The income stream disappears when you die and usually cannot be cashed out for upfront if you are short on funds. You can use the pension to reduce the amount assets needed for your desired retirement lifestyle, but this “asset” cannot be passed on to heirs so it shouldn’t be included as part of net worth. [/quote]

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