No. of Recommendations: 3
Should Social Security (and pensions) be considered an asset and factored into a retiree’s investment allocation?

Michael Kitces has a nice article on valuing SS on the household balance sheet:

If you use i-Orp ( or Personal Capital ( to run some calculations where you plug in all of your data, including your expected SS and when you will take it, you can at least get an idea of how much you will need from your risk portfolio as an annual withdrawal to meet your expenses/needs over and beyond your other income streams (SS, pension, rental income, dividends, etc...) for the gap years leading up to SS, as well as once SS begins.

Think of it more as an income stream along with the other possible legs of your income stream:


•Pension Income
•Social Security Income
•Dividend Income
•Rental Income
•Part-time work/consulting Income
•Selling assets from risk portfolio Income

Depending on your various streams of income, and your goals for your wealth - you may or may not want to choose a particular asset allocation that will help you meet those needs/goals. For example, if you would receive enough of an income stream from SS and Pension alone to cover all of your expenses/needs, you may be able to be more aggressive with your asset allocation.
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