Annual Financial Performance and Retirement Planning Review

January is a good month to assess overall financial performance and track yearly progress toward retirement. Today I did just that.

This is actually going to be a six month performance review. In July, when we switched banks, I transitioned from using Quicken as our primary personal finance tool to using a custom Google Docs spreadsheet. I started with a net worth tracker and expanded the spreadsheet to include all of our assets, income, and accounts. I still have data from previous time periods in our Quicken file but because I use multiple computers at different locations to run our finances, I just don’t use Quicken anymore. The simplicity and ease of cloud computing  is wonderful.

So let’s summarize how we did. Our total net worth increased by 4.91% over the second half of the year. I am satisfied with this because during this period, we closed on the purchase of our condo. This caused us to burn through some cash, converting some of it to equity and some used to buy furniture and supplies. Fortunately, the condo appraised for more than our purchase price.

The total value of our retirement assets increased 7.39%. This is from a combination of additional retirement account contributions and increases in the market value of our investments. I am still fine tuning my spreadsheet so that it will accurately display the internal rate of return for each of our investments. At this point, I remain pleased with the non-correlated performance of the core holdings in my 401(k) account. We bought some TIPS in the last half of the year and intend to buy more in 2011, as part of our guaranteed retirement income plan.

Another metric I want to use to track progress toward retirement is the value of our retirement portfolio if it were annuitized into monthly retirement income for life.  I ran those numbers at the end of the year and will check them again monthly. This annuity income metric will reflect a combination of annuity returns and changes in the value of our retirement nest egg.

Do you track your financial performance in a similar way? Thoughts and suggestions for me?


  1. RICH ANSELMO says

    I do basically the same as you, however, i do not include the appreciated or (depreciated) value of my investments until positions are closed (sold).

    I know too many former retiree’s who in 1999-2000 had hundred’s of thousands of dollars of “potential” stock gains only to lose it and then some principle. These folks traveled and spent as if they had all that money because thats what their financial software indicated. Today these same folks are bitter, some depressed and most vow never to go into the stock market again. I do not, mark-to-market. All investments retain their same value unless I have stops in place indicating most likely gains(or losses).

    Additionally, I do not think this is a good time to buy TIPS as base rates will likely be higher in the upcoming years. One could probably buy the current TIPS on the secondary market at a discount to face value later. At least, thats my plan.

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