Another question about calculating Net Worth

[scfr]

My smart husband asked a very interesting question this morning ...

I was telling him about the Wealth Scoreboard (http://assetbuilder.com/?p=88) and discussing where we stand now and where we would like to be.

He asked: When calculating your Net Worth, shouldn't you discount your tax-deferred retirement savings a bit, because eventually (when you retire and start making withdrawals) you are going to have to pay taxes on that money?

My opinion is that, yes, we probably should discount those savings a bit, but I've no idea by how much. I already discount home value (tho' I don't own one at the moment) by 10% because I know I'll end up paying taxes & commissions when I sell.

What do you all think? Should tax-deferred retirement savings be discounted when you calculate your net worth? By how much? Anyone have any information on what the "experts" have to say about this?

For me, calculating my Net Worth is all about having a realistic idea of where I stand. It's not about getting the highest possible number I can come up with.

[Broken Arrow]

Yes, he does have a point, though how much to take out really depends and I am not qualified to make such a recommendation. Still, for my own use, I usually subtract 20% for taxes for retirement accounts.

[Aleta]

Your net worth is your net worth. It is about what you are worth at this moment. If you look at some of your savings (for example your car), that money will be spent one day because you are saving it. Everything that you have will eventually be spent. You just want to know where you are today and what you are worth in property. Don't try to make it more complicated than it is. If you were to sell an older car today, you could check it out on the Kelly Blue Book resale value to get an idea of what you could sell it for if you had to.

[Ima saver]

I agree with Aleta, it is what you are worth right now.