Stand Up and Be Counted: How to Value a Stream of Payments

Stand Up And Be Counted: How To Value A Stream Of Payments Splash image

Your portfolio may have a much larger pot of assets than your valuation figure reflects.

How can a large pool of assets possibly be overlooked in a portfolio valuation? It occurs when those assets are hard to put a number on. And among the most difficult assets for retirees to assign a number to are any guaranteed steady payment streams—the most common being defined-benefit pension plan and Social Security payments. Other examples include immediate annuity payments, income payments from trusts, and even—should you be so lucky—annual payments from winning the lottery.

Why Does It Matter?

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Discussion

Don Nix from Texas posted 10 months ago:

I read this article with interest in 2008 and more carefully today as I approach my full retirement age for Social Security. However, the extraordinary treasury rates of today make me worry that I will get a very erroneous number and over weight stocks. My math skills aren't sterling, but the assumptions one must make to use to determine the PV of a guaranteed income stream seem more like random guesswork.
What software is out there that would enable me to run multiple scenarios without separately doing the math for each situation.


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