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Originally Posted by Walkinwood
I think they're counting income as reported in tax returns which would be dividends/cap-gains on taxable accounts & withrawals on tax-deferrred accounts.
As you draw down your taxable portfolio - ie. withraw principle - , there will be less cap-gains / dividends on the remaining amount.
Could that be the reason?
ww.
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I would think the biggest reason for "affluent" retirees' income to go down is a reduction in IRA withdrawls. If you need less, you'll take out less and then it appears that your income drops.
Another option is that the older retirees have much smaller IRAs than the younger retirees. Hence, their money is already taxed and sitting in their accounts. Less desire for money turns into less liquidation resulting in capital gains. They are literally living on their interest and dividends. My FIL retired in the early 80's and he didn't have time to build much of an IRA. His withdrawls are at the required minimum.
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