r2i forum

Hi All,
Do you guys include 401K to calculate your Net Worth?. With 401K I look OK, but without it I look very bad.
rajesh

yes it is your money. 401K amount net of withdrawal penalties and anticipated tax amount. I would say you could use 70% of the amount. Your actual net will depend on when and and what amounts you withdraw.

rajeshamara;79544Hi All,
Do you guys include 401K to calculate your Net Worth?. With 401K I look OK, but without it I look very bad.
rajesh[/quote]

Yes, you should include all tax-deferred investments such as 401(k) in your net worth estimate. As #2 suggested, use an after-tax estimate, based on your withdrawal timeframe. If you intend to withdraw from these assets when your earned income is low or zero, your US tax rate could be as low as 10-15% depending on amount withdrawn. It is reasonable to use 20-25% factor for most people to be conservative enough. If you are using 30% or above, you probably have a large asset base and your withdrawals could be well over $150K/year.

Actually I am not going to withdraw from 401K till I retire (or unless there is no other alternative). When ever I look other AAP's with more than 300K assets, It just puts me down even though I am in US for the past 14 years, I couldn't accumulate much besides the 401K and some non tax investments. And now I can be a bit happier. I am some how habituated to include only the liquid cash I have.
rajesh