Jorgen Vik: Count your assets to see where you stand | Lifestyles

OK, last week you figured out where you want to go financially.

Then, to stake out the course, you will need to know where you are.

In other words, how many assets do you have now? How much do you add? How much debt do you have? How much are you paying in debt service? And what future sources of income await you?

Knowing the amount of your assets is simple, but can be time consuming if you have many separate accounts and properties.

This is when some of you may regret having investment accounts with various institutions. This is in my opinion a form of misunderstood diversification that results in an unnecessary amount of administration on your part.

Next, how much do you add to the retirement accounts each year? Include all employer correspondence; in the end, it’s money you can spend one day.

You will also have to assume a rate of return on these assets in the future. Historically, stocks have returned around 10% per year. With lower interest rates, it may be prudent to assume lower yields than historical bond yields. Maybe 4%.

Next, plan for future sources of income. If you have a pension, congratulations; you are one of the 31% of current workers who do, according to capitalpersonnel.com.

Incorporate Social Security, which you can start at age 62, until age 70, or anytime in between. Special rules apply to widows, unmarried divorcees (married for at least 10 years) and spouses.

Unless you have a high income, I think it’s reasonable to expect Social Security to pay you what it currently states (you can go to www.ssa.gov to view your statement). For high earners, you might want to cut the pledge by a quarter, just in case the rules change somehow to cut benefits or increase Social Security taxation for These persons.

Once you understand all this, you will see if the expected income matches the desired income.

If the answer is “yes”, go for it. If it’s “no”, retiring later helps a lot. Increase savings by spending less on jobs too, although I think it’s more difficult, as it involves sacrificing current lifestyle for future benefits.

So there are the starting and ending points of a heritage plan. Start with the end in mind; sort out where you are and where you’re heading.

But, as they say of the best-laid plans, something else could happen. This is where insurance can help. More on that next week.