Hello All,
I'm new hear, so I'll jump right in and see how silly I can sound.
I'm almost 60, and I retired from the federal government a couple of years ago after 40 years of federal service including my 4 years of military time. I paid 7 percent of my salary into my retirement system and that enabled me to receive approximately 76 percent of my high-three salary years, which were the last three years that I worked. As best as I can tell, I paid approximately 160K into my retirement system over my career plus a few thousand to Social Security that I will never be eligible for since I don't have my 40 quarters nor do I intend to get them. The value of my home, savings, cars, toys, and my wife's small 401K is about 500K and I have no debt whatsoever.
I don't want to dig through my attic to find 40 years of tax returns, so I'll WAG it this way:
Since: Total Salary over 40 years X 7% per year contribution = 160K
Then: Total Salary over 40 years = 160K/.07
Therefore: Total Salary over 40 years = 2.28 million$
If that is correct, my net worth of 500K would be 21.9% of my career earnings.
On the surface, it doesn't seem like I've done very well over the years. But, since I have a very nice annuity every year after 40 years of working, I'm very comfortable.
So, how does one take into account a yearly annuity when figuring net worth?
Do you use the 4% rule and project what you would have to have in an actual cash account to draw what your annuity is?
Thomas