How Do You Answer Income Questions Once Retired?

[Sunset]

Quote:

Originally Posted by Fermion Just make up a number, they won't check.

+1
I usually say about 130K - 150K when applying for a credit card.

In any year I "could" make it that number by just selling a bunch of old investments and take a bath on the capital gain.

[pb4uski]

Quote:

Originally Posted by Fermion Just make up a number, they won't check.

I wonder if that is true because when I bought my truck I gave them a nice even number that was in the ballpark an was immediately approved. Perhaps my high duck score was sufficient for their purposes though.

[Another Reader]

AGI does not work for me because of the real estate. Because the credit report shows the mortgages, I use total income before mortgage debt payments.

Credit card applications never ask for back up information. However, I have the numbers available to substantiate the cash flow calculation, as I never want to be accused of fraud.

[Senator]

Quote:

Originally Posted by pb4uski I wonder if that is true because when I bought my truck I gave them a nice even number that was in the ballpark an was immediately approved. Perhaps my high duck score was sufficient for their purposes though.

The only way to check employment income directly is to call employers. That takes time, and many employers do not give that information out. After that, it's tax forms, W2s, bank statements, and pay stubs. That's what a bank requires when you get a mortgage.

Income is a private matter between you and who you give that information to directly. A car company knows they make a bunch of money, get a down payment, and can repo the car very fast. Their risk is small. A mortgage company's risk is much higher, plus there are Federal rules they have to follow. The mortgage companies used to use stated income (i.e. liar) loans...

If you have a decent credit score, and say you have enough income, you are in for a credit card or a car loan. If you want a high credit limit, or a car loan, make sure you say a high number.

[misanman]

Had to answer this question when I leased my truck. I really didn't know exactly how to answer and told the salesman that since we were retired our income in any given year was "whatever we want it to be". He told me to put in $80,000 and we'd be fine.

[Danmar]

Pensions, and dividends. Interest is immaterial and cap gains may not be repeated. Hardly ever have to do this. Had to show we had enough cash to buy our last house in Arizona.

[RE2Boys]

I usually report the approximate total of taxable income that is regular. For me, a pension and an approximation of expected interest and dividends. I don't include what I may or may not make from my seasonal job, or my wife's activities.

Of course, other than credit card applications, I haven't had a car or house loan since 1994.

The 1040 AGI is essentially whatever I want it to be, usually at top of 15% bracket due to cap gains or Roth conversions.

[karen1972]

The only issue is likely mortgage, as I was told to leave off anything that wasn't required to be proved, since the more you state, the more you need to prove even when you don't need it. Many underwriters don't like dividends and certainly don't take capital gains (since they vary so much year to year). Pensions are fine if you have been receiving them for a year or so direct into a verifiable account.. basically when it comes to mortgage you better have all your paperwork handy and be able to prove it is sustainable for anything you write down. Personally, I knew this is stupid since my honey wrote down his paycheck and we knew he wouldn't be at that job very long, but that's the way it works. ie his paycheck was worth more than the million in the bank to the underwriter.

I have always assumed for everything else AGI is fine since such small credit can easily be paid off.

[kcowan]

For a bank credit card, we used our last income tax submission. For our permanent residence visa in Mexico we stated that we had slightly more than the minimum needed in a letter to immigration. We just do the minimum needed in each case.

[Lake161]

I use my annual spend, not my taxable income.

I am pulling from my taxable accounts right now, so I only show cap gains (which are a net loss due to TLH) and dividends (too low to look good on a credit application) in my AGI.

I'm using rewards cards to pay most bills, and sign up for a new one every few months to get the sign on bonuses. I've never been asked to document my income.

[Golden sunsets]

Thanks all. We have no debt either but applied for two new credit cards this year to take advantage of better rewards and no annual fees, thus I had to answer the income question. I also requested an increase in credit limit on one card so that the closure of other cards would not lower our overall credit limits. But I haven't been using AGI because it does not include DH's substantial VA disability pension.


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[ls99]

Timely topic. I keep getting CC offer from USAA. I don't need it, but might apply just to see if they are serious about my "preffered" status.

[Alan]

Quote:

Originally Posted by youbet Was this early in the process Alan? It seems like if you had already made an offer and it was accepted, you could just give them a check in lieu of proving you'd be able to give them a check later. Or was it a case where the seller still had some loops to jump through and you didn't want to give them a check until seller completed their to-do's?

It's a short chain. The seller has to buy a house and the house he is buying has an occupant who is moving to another city to be near his son. ( I think he is about 90 and will be moving in with his son while he finds somewhere else).

We've had a survey done and our lawyer has now completed searches on the property we are buying, has received some documents on construction that was done and is waiting on an electrical safety certificate following replacement of a fuse/breaker box. I assume they are having similar searches and surveys done on the property they are buying.

The goal is exchange of contracts first week of January followed by closing on January 18th. 10% deposit required on exchange of contracts, otherwise a copy of brokerage and bank statements was sufficient to assure ability to pay.

[medved]

Quote:

Originally Posted by Fermion Just make up a number, they won't check.

You might be right that they won't check. But I think it is better not to commit fraud on an application for credit.

[RobbieB]

You and me both.

[fritz]

Quote:

Originally Posted by Alan We are currently in the process of buying a house, for cash, and had to produce current brokerage statements to prove we had the funds to buy the house. I also provided pension statements to show that we also had other income streams.

Quote:

Originally Posted by youbet Was this early in the process Alan? It seems like if you had already made an offer and it was accepted, you could just give them a check in lieu of proving you'd be able to give them a check later. Or was it a case where the seller still had some loops to jump through and you didn't want to give them a check until seller completed their to-do's?

Quote:

Originally Posted by Alan It's a short chain. The seller has to buy a house and the house he is buying has an occupant who is moving to another city to be near his son. ( I think he is about 90 and will be moving in with his son while he finds somewhere else). We've had a survey done and our lawyer has now completed searches on the property we are buying, has received some documents on construction that was done and is waiting on an electrical safety certificate following replacement of a fuse/breaker box. I assume they are having similar searches and surveys done on the property they are buying. The goal is exchange of contracts first week of January followed by closing on January 18th. 10% deposit required on exchange of contracts, otherwise a copy of brokerage and bank statements was sufficient to assure ability to pay.

We've bought eight homes - five of them for cash in several states, and never had to prove we had the funds with brokerage/bank statements. Just showed up with a cashiers check at the closings. Nothing more than earnest money upfront (believe all were under $10k earnest), and no income verification except for mortgages on the three that weren't all cash purchases. All were typical purchases with realtors on both sides and lawyers handling closings.

[old woman]

I don't know what to put so just give a wild guess. I am retired but take money out of different accounts as needed without tracking. First time I was asked was right after I quit working, I wasn't expecting the question so just said I don't know I get SS and have a million invested so I guess about 80K. So this week when I wanted a credit line increased I told them 80K. My investment grow faster but to get a mortgage if I need to prove income they want me to set up automatic withdrawals and have enough to last 5 years. So I will do whatever I want like taking 10K a month until the mortgage settles then stop doing it. I made 93K on investments so far this year but only withdrew 50K so with SS 80K is in the ball park.

[scrabbler1]

Last year, I requested an increase in the limit on my main CC. It was pretty low and thought I'd need a boost due to a big hospital bill coming due and I wasn't sure I'd have enough cash on hand to pay it. (I could always write a check from my bund fund account.)


I don't remember if my bank asked me for my current income. They did want to see a credit report. I had locked it after the BCBS hacking but I had the info needed to unlock it temporarily so they could look at it. During a conference call including me, the bank, and credit reporting agency, I gave them my PIN, they unlocked it, and the bank granted me the increase.

[braumeister]

Quote:

Originally Posted by Alan We've had a survey done and our lawyer has now completed searches on the property we are buying

Wow! It just occurred to me that title searches must be a nightmare in Europe. They take long enough in this country where they only have to go back a couple of centuries or so, but OMG how deep do they search where you live?

[Alan]

Quote:

Originally Posted by fritz We've bought eight homes - five of them for cash in several states, and never had to prove we had the funds with brokerage/bank statements. Just showed up with a cashiers check at the closings. Nothing more than earnest money upfront (believe all were under $10k earnest), and no income verification except for mortgages on the three that weren't all cash purchases. All were typical purchases with realtors on both sides and lawyers handling closings.

Financial regulations in the U.K. Must be different than in the USA, perhaps when it comes to money laundering the U.K. is more careful as to determining the source of the money. Anyway, it was easy to produce statements to show the existence and source of the money and no deposit money is required to be paid prior to exchange of contracts which is only about 2 weeks prior to closing when the money is actually handed over. (This is done electronically, you never actually meet up together on the day holding checks or cash). When we sold our house in the USA we were amazed to walk away with a cashiers check worth almost a quarter of a million dollars. A cashiers check is as good as cash I think so we were very nervous until we got to our bank to deposit it.

Remember also that we have been out of the country for 29 years and therefore have no credit score or other U.K. financial history.