Jack Kahrs from NJ posted over 2 years ago:

If pension and social security income should be part of ones' investment assets, I assume they should be capitalized into a 'fixed income' amount which provides their payment. What is the interest rate that should be used, the average rate of return of all your investments? The present money market rate of return? Some arbitrary rate which might have long-term stability? Or what?

Dennis Farley from PA posted 9 months ago:

Following up from Jack's question above, and what your article indicated, I assume I should consider my social security and pension income part of my investment portfolio, since I am retired. As to determining the average rate of return of all my investments, I would probably use something like the going money market rate as an appropriate fit for social security, and medium - to - long term bond rate for the pension portion of the portfolio, perhaps 3%-4% or so today. My pension is fixed and was based upon a 4% base when I retired, so I would use that for my personal situation.

K Boscha from PA posted 4 months ago:

I have seen interest rates of 3% suggested more recently to calculate the basis of the fixed income portion. Of course it decreases the total basis and doesn't look as good on the ledger as the 4% rule allows.

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