On 1/5/2018 1:05 AM, David T. via gnucash-user wrote:
David—
I see where you are coming from on this.
For reference, I accept your 5 assumptions; I believe they are accurate for
many US retirement accounts as well.
.........
I guess, from a philosophical perspective, the question really is: when do
these funds become income? Is it when you get paid, or is it when the money
actually gets disbursed? It seems to me that most of us are looking at it from
the first perspective, but that the taxing agencies are looking at it from the
second. So, for example, I have paycheck transactions that document my
retirement contributions, transferring to the retirement asset accounts from a
special (retirement) income account
David
There are ADDITIONAL questions if a US 401k. For example, are company
contributions vested immediately or only over time? Here is a typical
case (yours might be different)
1) Company contributions are vested 10% per year.
2) Any still unvested contributions become fully vested upon retirement
at normal age (possibly also separation earlier but after age 55) or
upon death if earlier.
In other words, the company contributions are conditional on staying
with the company. They are in the account and earning but there is a
diminishing liability (you have to pay back the unvested portion if you
leave)
The 401k account MAY also have after tax contributions made to it, but
that only affects how distributions will be taxed.
Another benefit that some companies offer is "split dollar" insurance.
Very complicated to figure its affect on net worth. With split dollar,
the company still owns the policy but you get to select the beneficiary
<< the rights associated with ownership of an insurance policy can be
separated >> Called "split" because the employee is taxed for the
premium of the same amount term policy. Often to prevent that
complication, the employee is billed that amount. At termination the
employee has the right to:
1) Surrender the policy paying the company back for the premiums from
the accumulated policy values keeping the remainder.
2) Pay the company that amount and keep the policy.
Note that there is a hard to calculate value associated with that choice
<< what is your health status at this time in the future when you have
to make that decision.
Note that this is simply a special case of things that might affect
"effective" net worth or income but are difficult to carry on the (main)
books. For example, a job might provide in addition to salary, housing,
use of a vehicle, etc. << and this could even be tax free "income"
depending on the circumstances >>
Michael D Novack
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