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The New Coffee Room

  1. TNCR
  2. General Discussion
  3. Net Worth and pensions

Net Worth and pensions

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    jon-nyc
    wrote 13 days ago last edited by
    #4

    Check the answer with grok or Claude

    Only non-witches get due process.

    • Cotton Mather, Salem Massachusetts, 1692
    1 Reply Last reply
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      jon-nyc
      wrote 13 days ago last edited by
      #5

      By the way there are better ways to impress the Italian chicks. Start with buying nicer clothes. 😁

      Only non-witches get due process.

      • Cotton Mather, Salem Massachusetts, 1692
      N 1 Reply Last reply 12 days ago
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        89th
        wrote 13 days ago last edited by
        #6

        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?

        1 Reply Last reply
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          jon-nyc
          wrote 13 days ago last edited by
          #7

          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.

          Only non-witches get due process.

          • Cotton Mather, Salem Massachusetts, 1692
          1 Reply Last reply
          • 8 Offline
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            89th
            wrote 13 days ago last edited by
            #8

            Ugh I just got an MBA flashback of Net Present Value and now I feel sick.

            1 Reply Last reply
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              jon-nyc
              wrote 13 days ago last edited by jon-nyc 13 days ago
              #9

              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.

              Only non-witches get due process.

              • Cotton Mather, Salem Massachusetts, 1692
              1 Reply Last reply
              • 8 Offline
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                89th
                wrote 13 days ago last edited by
                #10

                Ah so that's how Copper was able to retire.

                1 Reply Last reply
                • J jon-nyc
                  13 days ago

                  By the way there are better ways to impress the Italian chicks. Start with buying nicer clothes. 😁

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                  NobodySock
                  wrote 12 days ago last edited by
                  #11

                  @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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                    NobodySock
                    wrote 12 days ago last edited by
                    #12
                    This post is deleted!
                    N 1 Reply Last reply 12 days ago
                    • N NobodySock
                      12 days ago

                      This post is deleted!

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                      NobodySock
                      wrote 12 days ago last edited by NobodySock 12 days ago
                      #13

                      @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:

                      1. 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.

                      1. Estimate Annual Pension Income
                        Determine the annual amount you'll receive. For example:

                      $30,000 per year starting at age 65.

                      1. 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%).

                      2. Estimate Duration
                        Use life expectancy to determine how long you'll receive the pension.
                        For example: 65 to 85 = 20 years.

                      3. Calculate Present Value (PV)
                        Use the formula for the present value of an annuity:

                      Where:

                      𝑃
                      P = annual pension

                      𝑟
                      r = discount rate

                      𝑛
                      n = number of years

                      PV=P×(1−(1+r (-n) /r

                      The formula did not translate perfectly here. that is (1 +r to the negative n)

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                        NobodySock
                        wrote 12 days ago last edited by
                        #14

                        I'm worth half of a Steve Austin!

                        1 Reply Last reply
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                          NobodySock
                          wrote 12 days ago last edited by
                          #15

                          Thanks for the ChatGPT Jon. Wonderful use of AI

                          1 Reply Last reply
                          👍
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                            jon-nyc
                            wrote 12 days ago last edited by
                            #16

                            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?”

                            Only non-witches get due process.

                            • Cotton Mather, Salem Massachusetts, 1692
                            N 1 Reply Last reply 12 days ago
                            • J jon-nyc
                              12 days ago

                              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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                              NobodySock
                              wrote 12 days ago last edited by
                              #17

                              @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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                                jon-nyc
                                wrote 12 days ago last edited by
                                #18

                                Ha

                                Only non-witches get due process.

                                • Cotton Mather, Salem Massachusetts, 1692
                                1 Reply Last reply
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                                  taiwan_girl
                                  wrote 12 days ago last edited by taiwan_girl 18 days from now
                                  #19

                                  @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"

                                  N 1 Reply Last reply 12 days ago
                                  • T taiwan_girl
                                    12 days ago

                                    @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
                                    wrote 12 days ago last edited by
                                    #20

                                    @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

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