That’s a pretty nice pension, so I don’t mind if you turn down the retirement saving a notch or two. I’d be okay with 10 percent instead of 15, but I still want you guys to save lots and lots of money!

Even though a military or government pension seems pretty stable, you should never rely on things that are beyond your control. So, don’t assume the Navy is going to take care of you. I’m not knocking the military, Megan. I just want you to have a separate nest egg over and above what they will provide. If something unforeseen happened and your husband couldn’t make it to 30 years, you guys would need an additional source of income more than ever!

- Dave

Dear Dave,

I’m in the middle of filling out an application for life insurance, and they are asking me for my net worth. Is there a formula for figuring this out?

- Sheila

Dear Sheila,

Assets minus liabilities equal net worth. That’s the fancy way of saying it. The easiest way to think of it is this: what you own, minus what you owe, equals your net worth. Let’s say your home is worth $200,000. If you owe $150,000 on it, you have $50,000 in equity to apply toward your net worth. You want to be careful not to significantly overstate or understate your net worth. Generally, things like furniture and everyday jewelry aren’t part of the calculation. Now, if you’ve got a $30,000 Rolex strapped to your wrist, that’s different. On the other hand, if a watch like that is a big part of your net worth, you probably shouldn’t have bought it the first place! Things like bank accounts, investments, and maybe businesses or real estate are the kinds of things that usually show up on a net worth statement.

- Dave * Please visit www.davesays.org for more financial advice. - 30 -