Then the present value of your benefits is $135,000/ (1.05) raised to the fifth power. To raise 1.05 to the fifth power, simply multiply it by itself five times. The resulting value for the benefits is $105,776.03. That is the simple approach to valuing Social Security benefits.
To raise 1.05 to the fifth power, simply multiply it by itself five times. The resulting value for the benefits is $105,776.03. That is the simple approach to valuing Social Security benefits. The benefits actually are worth more than that for a couple of reasons. Social Security benefits are not fixed payment benefits.
Your Social Security benefits and any other pensions are valuable assets. They also are very conservative assets. They should be considered when computing both expected retirement income and your portfolio allocation.