Pensions are generally not included in your Net Worth, but do play an important role in retirement planning.
Future income streams, such as defined benefit pension plans and social security, primarily impact your retirement planning by lowering your projected income needs in retirement.
These future income streams allow you to withdraw smaller amounts from your portfolio in retirement as a portion of your living expenses will be covered by your pension and/or social security. We would hate for retirement planning to be focused around a pension, then it not be available once you are at retirement age. For more information, check out this article “Include Your Employer’s Pension Contribution in Your 25% Savings Goal?”
Learn more about pensions in this #AskTheMoneyGuy video:
