Net worth calculation with a pension as opposed to a 401k?


I don’t know if this will help but as another pensioner, this is how I compare it.

We all track net worth, then use the 4% rule to let us know a rough estimate for what we can spend per year (cash flow).

So, I track

  1. The amount that I have already earned in my pension.
  2. The net worth of my other investments that. Note: I discount my pretax investments by 15% for taxes and exclude things like cars and houses for my 4% rule.

Then I add to two together to see where I am at.

  1. My pension is currently 700 per month
  2. My investments are currently 430 per month.

Nobody has a crystal ball, so remember that these numbers are all live and can change day to day.

Hope this helps.


People with pensions vs. people without will be the haves vs. the have-nots of the retirement age demographic within the next couple of decades.


Being in Australia and reading about 401k’s is interesting.
In Australia we have a 9.5% compulsory contribution to our Superannuation or Pension fund or whatever you want to call it. This 9.5% comes out of our personal wages, it’s not a contribution by the company we work for.
For example, if I earn $60,000 gross per year, my actual taxable income is $54,794 as $5,205 is actually taken out an placed into my super/pension fund which I cannot access until I’m 65. Essentially a compulsory retirement/pension saving fund.
In contrast to this, when I was working in the UK, the company contributed 3% of wages to your pension fund. This was not taken from my wages. They also had a scheme where for every 1% that I contribute over the 3% the company will contribute up to a maximum of 4%. So, if I contributed the full 4% the company will add another 4%, plus the initial 3% for a total of 11%, essentially giving me 7% ‘free money’. I cant access this until I’m 65, however there is another added complication being that I cant transfer this money to my Australian pension fund until I’m 65.
If someone is willing to give you ‘free money’ I’d be taking up that offer.
I hope that this all makes sense and I have understood 401k’s, but if not then my apologies.
I think I’ll stick to property :slight_smile: