{"id":686985,"date":"2026-06-06T00:39:23","date_gmt":"2026-06-06T00:39:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/686985\/"},"modified":"2026-06-06T00:39:23","modified_gmt":"2026-06-06T00:39:23","slug":"the-hidden-1m-most-retirees-forget-to-count-according-to-kevin-lum","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/686985\/","title":{"rendered":"The Hidden $1M Most Retirees Forget To Count, According to Kevin Lum"},"content":{"rendered":"

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Kativ \/ Getty Images<\/p>\n

Many people worry about running out of money in retirement, but they may be sitting on hundreds of thousands of dollars \u2014 or even millions \u2014 more than they realize.<\/p>\n

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“It’s possible you’ve been calculating your net worth wrong your entire life and that mistake could be causing you to spend less than you could, to worry more than you need to and to make worse decisions in retirement than you have to,” Kevin Lum, a certified financial planner, said in a recent YouTube video<\/a>.<\/p>\n

Here’s why many Americans may be overlooking a major source of retirement wealth hiding in plain sight.<\/p>\n

Why Many Americans Underestimate Their Retirement Net Worth<\/p>\n

Traditionally, net worth is calculated by adding up retirement accounts, brokerage savings and home equity, then subtracting debt. That approach works well during the accumulation years, but it falls short once someone enters retirement.<\/p>\n

“That calculation is incomplete, because for someone in retirement, it completely ignores your more valuable assets,” Lum said. “It ignores your Social Security benefit and, if you have one, your pension.”<\/p>\n

These forms of guaranteed income may not show up on a balance sheet, but they have real financial value.<\/p>\n

One way to estimate that value is to convert the income into a “portfolio equivalent” \u2014 the amount of invested assets someone would need to generate the same cash flow using a standard withdrawal rate, such as 4%.<\/p>\n

Viewed through that lens, the income streams retirees tend to forget about can rival \u2014 or even exceed \u2014 the value of their investment portfolios.<\/p>\n

Discover More: Warren Buffett’s Advice\u00a0To\u00a0Prepare for a Recession Is S-Tier<\/a><\/p>\n

How Social Security and Pensions Can Be Worth Hundreds of Thousands \u2014 or More<\/p>\n

Lum offers an example of a retiree with $1.6 million in traditional net worth. Once Social Security and pension income are translated into portfolio value, that retiree’s “real” net worth could be closer to $2.8 million.<\/p>\n

In that scenario, Social Security alone may be equivalent to several hundred thousand dollars in invested assets. A pension can add several hundred thousand more. That gap can significantly alter how secure a retiree actually is and how much financial flexibility they have.<\/p>\n

“The problem is, it doesn’t show up on a statement, it doesn’t show up on a balance sheet, and so many people don’t calculate it,” Lum said. “When you add in what the equivalent portfolio would be needed to create the same amount of guaranteed income, you could be in a much better situation.”<\/p>\n

For retirees who feel behind or anxious about their finances, recognizing this income-backed value can be a huge comfort.<\/p>\n

How Guaranteed Income Can Change Retirement Spending and Investing Decisions<\/p>\n

Understanding this fuller picture can influence how retirees allocate assets, how confidently they spend money and how aggressively they invest for the long term.<\/p>\n

“If your Social Security amount is covering most of your fixed expenses, you might be able to be much more aggressive with your investment account and be able to create some larger, long-term wealth,” Lum said.<\/p>\n

“By having a fuller picture, you have a better understanding of how you’re doing,” he continued. “Many people \u2026 don’t take into account the long-term value of their pension or their Social Security, which can be worth \u2026 over a million dollars in wealth that they never really thought about.”<\/p>\n

Lum stresses that this realization isn’t about spending recklessly or ignoring market realities.<\/p>\n

“The answer is not to go and blow your money and say, ‘I’m rich, I just discovered I have another million dollars,'” he said. “But the answer is \u2026 to make decisions with the full picture, not just a partial picture, because when you see your real net worth, it begins to impact real-life decisions.”<\/p>\n

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