Net Worth and pensions
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wrote 13 days ago last edited by
i am striking out hard tonight trying to find a networth calculator that addresses pensions and how to value them into your net worth. can anyone assist?
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wrote 12 days ago last edited by
Look for cash value of an annuity.
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wrote 12 days ago last edited by
Try ChatGPT. Tell it the monthly amount and your age, tell it the payments stop at death and ask it to calculate the present value of the cash flows.
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wrote 12 days ago last edited by
Check the answer with grok or Claude
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wrote 12 days ago last edited by
By the way there are better ways to impress the Italian chicks. Start with buying nicer clothes.
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wrote 12 days ago last edited by
Sorry if a stupid question, but wouldn't net worth be summarized by year. In other words, current net worth (all assets minus all debts), then year after year you'll project your income and expenses to find out net worth projections by year?
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wrote 12 days ago last edited by
It’s true net worth changes with time. A pension’s value at 55 is very different than at 95. But at any point in time it has a value.
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wrote 12 days ago last edited by
Ugh I just got an MBA flashback of Net Present Value and now I feel sick.
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wrote 12 days ago last edited by jon-nyc 12 days ago
When I was at Credit Suisse I had all these tools on my desktop.
I remember when my buddy won the (VA) state lottery and chose the lump sum. He asked me if it was a good deal. It turned out it was more than we would have valued the 30 year cash flows from a tier 1 bank. VA probably assumed zero credit risk and zero inflation when they calculated it.
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wrote 12 days ago last edited by
Ah so that's how Copper was able to retire.
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By the way there are better ways to impress the Italian chicks. Start with buying nicer clothes.
wrote 12 days ago last edited by@jon-nyc said in Net Worth and pensions:
By the way there are better ways to impress the Italian chicks. Start with buying nicer clothes.
Ha! I'm afraid if they saw my cash flow in retirement, that I would need to hire a doorman at my villa to screen all the aspiring representatives of the fairer sex. I already have a small queue forming on my FB messenger from the American variety
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wrote 12 days ago last edited byThis post is deleted!
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wrote 12 days ago last edited by NobodySock 12 days ago@NobodySock said in Net Worth and pensions:
how to determine pension value in net worth
ChatGPT said:
To determine the pension value in your net worth, you need to estimate the present value of your future pension payments, since net worth is a snapshot of your financial position today. Here's how you can do that:- Know the Type of Pension
Defined Contribution (e.g., 401(k), RRSP): The account balance is already part of your net worth.
Defined Benefit Pension: You receive a fixed monthly income in retirement. You need to calculate its present value.
- Estimate Annual Pension Income
Determine the annual amount you'll receive. For example:
$30,000 per year starting at age 65.
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Choose a Discount Rate
This reflects the time value of money—commonly 3% to 6% depending on inflation, interest rates, and risk.
For conservative estimates, use a lower rate (e.g., 3–4%). -
Estimate Duration
Use life expectancy to determine how long you'll receive the pension.
For example: 65 to 85 = 20 years. -
Calculate Present Value (PV)
Use the formula for the present value of an annuity:
Where:
𝑃
P = annual pension𝑟
r = discount rate𝑛
n = number of yearsPV=P×(1−(1+r (-n) /r
The formula did not translate perfectly here. that is (1 +r to the negative n)
- Know the Type of Pension
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wrote 12 days ago last edited by
I'm worth half of a Steve Austin!
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wrote 12 days ago last edited by
Thanks for the ChatGPT Jon. Wonderful use of AI
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wrote 12 days ago last edited by
You could have entered your own values and let ChatGPT do the calculation for you, eg:
“I am 55 years old and have a pension of XX per month. Using standard actuarial tables and a conservative discount rate, what would you estimate the present value of my pension to be?”
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You could have entered your own values and let ChatGPT do the calculation for you, eg:
“I am 55 years old and have a pension of XX per month. Using standard actuarial tables and a conservative discount rate, what would you estimate the present value of my pension to be?”
wrote 12 days ago last edited by@jon-nyc said in Net Worth and pensions:
You could have entered your own values and let ChatGPT do the calculation for you, eg:
“I am 55 years old and have a pension of XX per month. Using standard actuarial tables and a conservative discount rate, what would you estimate the present value of my pension to be?”
I could tell the truth and admit to doing just that but then people here might think less of my mathamatical abilities and that bothers me.
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wrote 12 days ago last edited by
Ha
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wrote 12 days ago last edited by taiwan_girl 18 days from now
@NobodySock Here are a couple that I "fool around with"
https://cfiresim.com/#google_vignette
https://www.firecalc.com/index.php
They both seemed pretty good to me and were fun to play with. I haven't looked at them recently so dont know what (if any) updates or changes have been made.
They both run many simulations based on past stock market returns. I think they call it a "Monte Carlo"
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@NobodySock Here are a couple that I "fool around with"
https://cfiresim.com/#google_vignette
https://www.firecalc.com/index.php
They both seemed pretty good to me and were fun to play with. I haven't looked at them recently so dont know what (if any) updates or changes have been made.
They both run many simulations based on past stock market returns. I think they call it a "Monte Carlo"
wrote 12 days ago last edited by@taiwan_girl said in Net Worth and pensions:
@NobodySock Here are a couple that I "fool around with"
https://cfiresim.com/#google_vignette
https://www.firecalc.com/index.php
They both seemed pretty good to me and were fun to play with. I haven't looked at them recently so dont know what (if any) updates or changes have been made.
They both run many simulations based on past stock market returns. I think they call it a "Monte Carlo"
Thats where the variable “discount rate” comes into play. Considering market gains, losses, and good old dependable inflation. I plugged in 4 percent and then there is the crap shoot of picking the number of years one has left to live. With monthly pensions and SS, that magical number makes all the difference in placing value to the as yet untold true pot of gold
