Bichon Frise wrote:
The calculation should be pretty easy. Typically it is avg of 5 highest years salary and then a % of that earned for every year worked. What you need to be careful of, and this would always worry me, is if they were ever take the pension away. What's earned is earned, but you won't get anything going forward.
The NYS teachers pension is about as ironclad as you can get. There are currently laws against changing the pension at all. The only changes they can make are for new hires.
I do understand though nothing is guaranteed...even the actual money they we have saved for retirement could drop dramatically.
Also, yes the calculation is easy as in I can project what she will receive each year for life assuming she continues to work until age 55. My question was how should I go about incorporating that into our net worth calculation...should I even bother?
I don't think you understand what I am saying. They can't take away what is earned, but you can stop earning going forward. It's happened before.
Networth to me is just a number. If I shared it with people other than my spouse, it would just be something we brag about at parties. But we don't share it with other people. YOU DON'T RETIRE BASED ON A NETWORTH NUMBER. It is a yardstick, nothing more, nothing less.
Since you can calculate, under current rules, the future annuity payments, this actually is more helpful than incorporating into your networth. You should always start with how much income you will need in retirement. If your needed monthly income is $XXXX, and the monthly annuity payment will be $YYYY, the difference is what needs to be covered by investments. You can then convert that to portfolio value using a WR.
I understand the want to "boost" your networth number, but it is in no way helpful for tangible retirement planning.