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Thread: Net worth and housing

  1. #41
    Senior Member jp1's Avatar
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    Quote Originally Posted by Tybee View Post
    So it tells you if you are on target for your age and income? So if you require a 50000 income, and you are 50. then is your target asset 250k?
    Then if you still require a 50,000 income, and you are 70, your target is 350k?

    Or is it your current income while working?

    And if you can only withdraw 4% a year on 250000, that is only 10k? And at 70. in same scenario, it is only 14k?

    Or is it all about how much they want you to save by a certain age to be on track?
    The problem I have with simple calculators like this is that there's a lot of details that get left out, some of which matter, as you've pointed out.

    Personally when I look at my income vs. what I'm saving and what I'm spending, I include my employer match for my 401k and ESOP as income. I also include SS withholding as tax since I won't be paying that once I retire. When I do that I find that 26% of my income goes to taxes, 35% goes towards savings and the remaining 39% goes towards current spending. Of the current spending about 40% goes towards rent. We don't own real estate so the OP's questions is easily answered for me. What does matter to me is that when SO and I retire we will be moving somewhere cheaper. We will buy a home with cash and our rent expense will disappear. So, in order to maintain my current lifestyle, my retirement income need will be approximately 24% of my current (all in including employer savings matches) earnings, plus whatever additional costs homeownership will entail, plus whatever additional health insurance/healthcare costs we will have.

    A simple "you need to have saved X by this point in your life" calculation doesn't seem sufficient for me because details matter.

  2. #42
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    I am finally getting to be less of a freak about net worth. I am retired with a great pension and a paid off condo. Next year when my wife pulls social security that will pay my health insurance. I’m consulting more than I planned, it is fun but we just sock away the funds. We will be those people who at age 70 1/2 are required to pull money from deferred accounts. Our children will do well when we die as we did when my folks passed and they did when granny passed. It is how you live and earn that determines how you can give. Now at time of Financial Independence the tracking Of net worth isn’t as crazy as it has been but I do love studying finance and the markets, it is how I am wired

  3. #43
    Senior Member jp1's Avatar
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    Quote Originally Posted by San Onofre Guy View Post
    I am finally getting to be less of a freak about net worth. I am retired with a great pension and a paid off condo. Next year when my wife pulls social security that will pay my health insurance. I’m consulting more than I planned, it is fun but we just sock away the funds. We will be those people who at age 70 1/2 are required to pull money from deferred accounts. Our children will do well when we die as we did when my folks passed and they did when granny passed. It is how you live and earn that determines how you can give. Now at time of Financial Independence the tracking Of net worth isn’t as crazy as it has been but I do love studying finance and the markets, it is how I am wired
    RMDs are fascinating to me. I get the idea, from a tax policy perspective, but it's just one of so many tax policy issues related to old people and to inheritances. And it seems completely separated from most of the rest. Personally I inherited a few thousand in an IRA from my father. He was probably having to take pretty big chunks every year as a distribution since he was 85 when he died. Now that it's mine I have to only take a small amount since I'm only 52, but I still have to take something. So every December I get a deposit in my bank account for an absurdly small amount. This year it was $93.

  4. #44
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    I have an MBA, although I use the soft leadership skills a lot and the facts/figures leadership skills only a little in my work. My one son has a math degree and the other is an accountant. Husband makes a hobby of following small investments and the markets, and he’s very conservative.

    I think there’s plenty of input in my world without any financial advisors involved. We advise ourselves for free. 😄

    I don’t worry about net worth. Our only debt is the mortgage and we’ll retire with S.S. and a pension. And some smaller IRAs and 403Bs, etc. I really don’t care what the exact number is.

  5. #45
    Senior Member iris lilies's Avatar
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    Good lord I am so efficient! I pulled out our financial “Legacy” file and found
    I had already documented the part about my pension having a cash value until the year 2025.

  6. #46
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    I used to not think about net worth but then I started to feel like my life was sort of spread out all over, financially speaking, and I couldn't really tell what impact my decisions were having on my finances and my future.
    So for the past couple of years I keep track of everything a couple of times a week and do a net worth figure too, so at least I can tell where I am versus where I was a year ago, for example, and see how the pieces fit together--it has helped me feel grounded and in control of things a bit more, because I tend to worry about money.

  7. #47
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    No matter how you slice it. NET WORTH WILL ALWAYS BE ASSETS Minus LIABILITIES. and at any given time.

  8. #48
    Senior Member bae's Avatar
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    Quote Originally Posted by Lon View Post
    No matter how you slice it. NET WORTH WILL ALWAYS BE ASSETS Minus LIABILITIES. and at any given time.
    Is there some reason you feel you need to SHOUT using CAPS?

  9. #49
    Senior Member catherine's Avatar
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    Quote Originally Posted by bae View Post
    Is there some reason you feel you need to SHOUT using CAPS?
    I believe Lon said he's hard of hearing.
    "Do any human beings ever realize life while they live it--every, every minute?" Emily Webb, Our Town
    www.silententry.wordpress.com

  10. #50
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    For the past 10 years I aimed for owned real estate to be 16% of total assets. I think a younger person realistically could say 20-22%.

    I use Zillow now to obtain an appraised value for our home, but I am skeptical.

    I always paid cash in my dealings for my hearth and home.

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