Retirement Income

[RobbieB]

Ok, here's the "income poll".

Notice the title "retirement income", that's right income by retired people. If you are still working full time this isn't for you. If you work part time for "fun or hobby" that counts so include it.

Include all of these;

1) Interest
2) Dividends
3) Income from rental real estate minus expenses
4) Social Security or equivilent
5) Pensions
6) Annuities
7) Regular draw on investments or minimums required from IRA
8) Any sort of "other income" that happens on a regular basis; ex - some people are good at poker and win regularly

And for all those with paid off mortgages, the fair rental for your home minus property taxes and "mello roos" or other such assessments if still paying and 10% for upkeep.

Do not reduce income by either federal or state income taxes.

[Senator]

My rental income is projected (and has been) to be 150K+, and eventually I will have SS, a small pension, investment income. The house is paid off. And I also have free healthcare. No debt. I spend less than ~$2K a month. I have saved about 2x my gross job income for the past 3 years.

I could have voted over $200K. And I am still nervous.... 46 days left.

[RobbieB]

You should be nervous. I worry about you being one of those who just "needs to work"

You don't need to worry about dough though.

Have fun!

[Meadbh]

Quote:

Originally Posted by RobbieB Ok, here's the "income poll". Notice the title "retirement income", that's right income by retired people. If you are still working full time this isn't for you. If you work part time for "fun or hobby" that counts so include it. Include all of these; 1) Interest 2) Dividends 3) Income from rental real estate minus expenses 4) Social Security or equivilent 5) Pensions 6) Annuities 7) Regular draw on investments or minimums required from IRA 8) Any sort of "other income" that happens on a regular basis; ex - some people are good at poker and win regularly And for all those with paid off mortgages, the fair rental for your home minus property taxes and "mello roos" or other such assessments if still paying and 10% for upkeep. Do not reduce income by either federal or state income taxes.

That's easy. I just used my taxable income.

[RobbieB]

I had to add the interest from my munis.

[calmloki]

Household? She and me have income that seesaws up and down as we see need to have our respective AGI be at certain points. Good to have all shared accounts.

[RobbieB]

Yes, income per household.

[Another Reader]

If you are living in the house, it's not producing income. It's dead money. If you rent out rooms or a basement apartment, then the net income should be counted. Mortgages could be any amount, so trying to adjust for housing costs seems better left out of the discussion. Also, it depends on the area. My Silly Valley house would probably rent for well over $4k a month. Same house elsewhere would be less than half that.

[pb4uski]

Interest and dividends across all accounts is ~$50k but some of that is in tax-deferred accounts so is not being used and is reinvested. I do a regular monthly withdrawal from our savings account but that seems to be principal to me.

My tax return income would be irrelevant because much of it is a Roth conversion which is not income but just moving money from one pocket to another but paying tax on it because it was tax-deferred.

[RobbieB]

Income is income. Weather or not you spend it all is up to you.

As to the fully owned home, I added that as it is a major investment for those of us that own our home fully and do not have to pay rent. You do have to live somewhere and you do have to pay for it. If you own it you only pay tax and upkeep. If you live in Silicon Valley you get to enjoy the location and that is worth something.

Have fun!

[Car-Guy]

I had to vote over 200k since that's what I told the IRS.

[RobbieB]

Me thinks I should have extended the high end a bit.

Good to know we are doing well -

[mathjak107]

the polls show you how surveys can be quite skewed depending on the source of the survey .

folks who frequent financial forums tend to be wealthier and sometimes we forget that fact .

most americans suck at financial stuff , especially investing but you see it all the time .

advice is given out to invest yet most suck at it and lack the pucker factor for it .

how many times have you heard :

buy term insurance -invest the rest .

don't pay off the mortgage invest the rest

take a mortgage because money is cheap , you can do better elsewhere .

we tend to forget that most of the country are not bogleheads and make investing a hobby or even an interest .

you can see the bulk of incomes here are well above the norm .

[scrabbler1]

I used interest+dividends+cap gain distributions from my taxable accounts. I didn't use my tax return's AGI because it excludes muni bond fund income and includes state and local tax rebates which I consider offsets to state and local income/property taxes paid and not "income."

[Fedup]

Mathjak, I do all of the above, I still have a 3.5% mortgage. I have term insurance.

[Major Tom]

Quote:

Originally Posted by mathjak107 how many times have you heard : <snip> don't pay off the mortgage invest the rest

Actually, that's not necessarily bad advice if interest rates are low. It is, however, very understandable if someone wants to pay off a mortgage for the feeling of security it gives them.

[W2R]

Quote:

Originally Posted by RobbieB And for all those with paid off mortgages, the fair rental for your home minus property taxes and "mello roos" or other such assessments if still paying and 10% for upkeep.

10% for upkeep? Wow.

I went back to re-examine my actual records for upkeep, and found that I spend 1% on average for upkeep, not 10%.

When Googling "What percentage of home's value for upkeep?" I came across numerous sites and all that I clicked on gave 1%, not 10%. For example, here's one:

How Much Should You Budget for Home Maintenance?

Oh well. Anyway, I just didn't include anything for my paid off home, because it wouldn't have pushed me into another category even if I did. Just wanted to point this out (because I'm old and cranky! ).

[NW-Bound]

Quote:

Originally Posted by pb4uski Interest and dividends across all accounts is ~$50k but some of that is in tax-deferred accounts so is not being used and is reinvested. I do a regular monthly withdrawal from our savings account but that seems to be principal to me. My tax return income would be irrelevant because much of it is a Roth conversion which is not income but just moving money from one pocket to another but paying tax on it because it was tax-deferred.

Quote:

Originally Posted by RobbieB Income is income. Weather or not you spend it all is up to you...

I can make my income what I want it to be. So, I voted using actual expenses ever since I fully retired (FIRECalc says I can go at least 30% above it).

This year, without extraneous non-recurring expenses, it looks like I am spending about 1/2 of the FIRECalc value. It's OK. Who knows what the market will do the next few years.

[RobbieB]

Quote:

Originally Posted by W2R 10% for upkeep? Wow. I went back to re-examine my actual records for upkeep, and found that I spend 1% on average for upkeep, not 10%. When Googling "What percentage of home's value for upkeep?" I came across numerous sites and all that I clicked on gave 1%, not 10%. For example, here's one: How Much Should You Budget for Home Maintenance? Oh well. Anyway, I just didn't include anything for my paid off home, because it wouldn't have pushed me into another category even if I did. Just wanted to point this out (because I'm old and cranky! ).

You got me thinking about that and I'm coming up with a number very close to 10%. I've been here a long time though, 27 years. The big ticket items I contracted were;

1) Complete roof replacement with tear off. Needed as the solar assist water tanks on the roof leaked and rotted some roof boards.

2) Replacement of HVAC, old one was 30 years, inefficient and broke down often.

3) Gutter replacement twice and paint exterior of home.

Smaller items;
Tree trimming and removal, replacement of rotted out retaining wall and repair of underground sprinkler system.

I'm painting the inside myself right now and I've also DIY'ed 2 sinks, 2 garbage disposers, 2 dish washers, 2 toilets and a few clothes washers and dryers. After I get the painting done I'm going to contract the replacement of all the flooring in the house.

All of that is very close to what 10% of the rental value was for the 27 years. One percent wouldn't even have covered the HVAC replacement.


Oh, I just looked at your 1% thing and saw it was 1% of purchase price and not 1% of fair rental value, which is closer to my reality. That number is closer to 10% of fair rental value.

[jabbahop]

Based on the rules of the poll.

Rental income less expenses, depreciation is zero

Have a temp consulting gig but that isn't regular

Taking what we need from after tax savings so living on more from a cash flow basis.