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[quote=Anonymous][quote=Anonymous]Look there is no one I officially report by net worth to - it is something I try to assess every once in a while for my own benefit. And to keep it as meaningful for me as possible, I do roughly factor in taxes.

For example, I have $1M in a regular IRA and $1M in a Roth IRA. I do not consider those two accounts to be equally valuable - because the Roth one is not going to be taxed so it is worth more to me.

Similarly, I am in the highest tax bracket and planning to work for 10 + years (hopefully at this income level) and just inherited a $2M in an IRA. Do I consider myself $2M richer? Nope I consider myself to be about $1.15M richer because I mentally net out the taxes. [/quote]

Net worth is not a useful substitute for cash flow analyses, which indeed should incorporate taxes as an annual expense.  For most people, projecting growth of income and expenses to and after retirement is the valuable exercise.  Net worth is only tangentially relevant to that, to the extent that your assets can be 1) expected to grow at a certain rate over time, and 2) expected to generate a certain amount of dividends/interest/capital gains at specific points in time, which you can use to offset your anticipated expense, including taxes.  [/quote]

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