Net Worth Update – August 2017

I finally got a chance to go through all of our financial updates and was pleasantly surprised to see that our net worth is continuing it’s upward trend.  As of today our net worth is $1,517,338.  If only that was just in investment accounts, we might consider throwing in the towel and driving off in to the sunset but, alas, it’s our total net worth including our home equity and vehicles.  I’ve been tracking another figure besides our total net worth which I call our “retirement assets”.  This includes the equity we have in our primary home that we will sell when we move to our secondary home outside the city and excludes our vehicle values.  When you include that equity and our investment accounts you get a figure of $1,216,061.  Why do I do this?  Because it’s a more accurate figure of how much money we have to generate an income from.  My hope is that number will get to about $1.7M by the time my daughter goes off to college.  Once we get to $1.7M, I might actually start feeling comfortable enough to consider retiring.

One thing that I don’t include in my net worth is the value of a small pension I’ll receive from my company in retirement.  They froze it a while back so it’s not increasing in value but should provide around $1250 a month at 55 years old.  Realistically we’d like to have about $75,000 a year in retirement income once we hit 62 and that little bit of pension helps us cross the line.  When you include 1 of our social security payments (I don’t like to plan the future assuming both of us will be around forever), and then add in the small pension amount, I’m estimating that will be somewhere around $3000 a month or $36,000 a year.  That means I only have to generate about $39,000 a year from our investments, which should be a conservative figure if we can get our retirement assets up over the $1.5M mark or so.  Like I said, I’m being ultra conservative on the estimates at this point.  With a 4% withdrawal rate on $1.5M in retirement assets we’d be able to take out $60,000 a year.  Add that to the pension/SS income and we’d be up over $96,000 a year.  I’d rather plan with a 3% withdrawal rate which would give us a total income of about $81,000.  At this point, I’m still just throwing numbers and estimates around while we are in the accumulation phase of our life but it does help give me an idea of how close we are to being able to pull the trigger and retire.