Retirement Income

[W2R]

I might be falling in love :^)

Sorry! That ship has sailed. But thank you. 50 years later, I look so different that I feel that using this photo doesn't even endanger my anonymity any more. Oh well, life is good even without that youthful appeal.

 

[Idnar7]

That is ok, mine has sailed also. Enjoy your posts and lifestyle. Love NOLA, but haven't been there for ages. Need to go again.

 

[Danmar]

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

Good to know we are doing well -

Agree.

 

[Danmar]

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! ).

My places generally are in the 3-5% of current market for maintenance. This includes all costs, taxes, upkeep, utilities, repairs, some professional management, etc. Most expensive is the house in Arizona(5%). Least expensive is the Toronto condo (3%). What really gets you is the periodic remodels. New kitchen at lake house ($90k). Remodel of Toronto condo (also $90k), new roof at Lake house ($50k). We like to keep our places well maintained so I suspect we would be at the higher end. But I think 1% would not be sustainable. Does that include taxes? Probably not, so if you add in .5-1% for taxes getting a little closer.

 

[Danmar]

Well, this is interesting. On one hand, we seem to have a lot of interest in folks that can't figure out how to spend $40k per year in retirement. On the other hand, we have very few in or even close to that income category!

Agree, a little surprised at the fairly high income proportions. Yet, the critical mass of discussion here appears to centre around lower income levels. Perhaps a reluctance on the part of some people to tip their hands re their income? A natural shyness or perhaps an unwillingness to buck the predominate culture here?

 

[Meadbh]

Agree, a little surprised at the fairly high income proportions. Yet, the critical mass of discussion here appears to centre around lower income levels. Perhaps a reluctance on the part of some people to tip their hands re their income? A natural shyness or perhaps an unwillingness to buck the predominate culture here?

Danmar, I think you have a hard time understanding just how much of an outlier you really are!

Besides, many contributors to discussions are early in their careers, while this poll targets those who have already retired. And there is a difference between retirement income and retirement spending.

 

[Danmar]

Danmar, I think you have a hard time understanding just how much of an outlier you really are!

Besides, many contributors to discussions are early in their careers, while this poll targets those who have already retired. And there is a difference between retirement income and retirement spending.

I think I do understand this, it just seems like I'm such a lone voice here, Turns out I am not as alone as I thought? I think the difference of retirement spending vs income not that much of a issue as pointed out by NW bound? Some will simply use the spend numbers. If anything a pure definition of income will understate the figures, no? I guess taxes would be an issue? Many people will also view forecasted or realized cap gains as available to spend?

Anyway, I am a little surprised at the higher levels 40% have incomes over $100k. I would have pegged the median around $50 but looks like it is more like $75k? Maybe that isn't such a big difference but there are quite a few at higher levels.

 

[Fedup]

I put the income I would report to the IRS. Not counting income earned in retirement account. I consider that investment asset to be used. Not income unless I take it out as distribution.

 

[kcowan]

I put the income I would report to the IRS. Not counting income earned in retirement account. I consider that investment asset to be used. Not income unless I take it out as distribution.

I included 5% mandatory distribution on my retirement account. included as taxable income.

 

[kcowan]

Anyway, I am a little surprised at the higher levels 40% have incomes over $100k. I would have pegged the median around $50 but looks like it is more like $75k? Maybe that isn't such a big difference but there are quite a few at higher levels.

I think it is because most of the discussion is about those that are close to the line rather than those of us with big buffers?

 

[tmm99]

I think it is because most of the discussion is about those that are close to the line rather than those of us with big buffers?

It must be. I am as surprised as Danmar. There is a lot of discussions on this board about spending less than 40K.

 

[NW-Bound]

People may be thinking that they can cut down to $40K if they need to, but they are in fact spending much more.

Is that wishful thinking? We do not really know unless the market takes another dump and loses 50% as it did in 2009, but I think they can. When there's no money but only $40K/year, people will figure out a way.

 

[Fedup]

I'm actually surprised there are more people in the lower brackets on this forum. Maybe they don't post that often.

 

[Fedup]

People may be thinking that they can cut down to $40K if they need to, but they are in fact spending much more.

Is that wishful thinking? We do not really know unless the market takes another dump and loses 50% as it did in 2009, but I think they can. When there's no money but only $40K/year, people will figure out a way.

Oh come'on, it's not likely going to happen. I think max is down 30% in a recession. But most likely down 20%.
I'm practicing fortune telling of course.

 

[jkern]

I voted based on my AGI before I read the requirements. If I counted the actual rental income (no depreciation), imputed income from paid off house and withdrawal from nest egg, my income would be 4 times higher.

 

[gerntz]

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;

7) Regular draw on investments or minimums required from IRA

I don't see how IRA draws or RMD's are income to you. It's yours already, counted in your net worth. Yes, it gets taxed then for the first time, but it was already assets.

 

[rodi]

Using your rules I was just over $100k. That's because I have a paid for house in an expensive rental area. But I can't spend a house...

Our spending budget - inclusive of taxes, healthcare, etc is $84k for a family of 4.

Using AGI doesn't work since some of the income is DH's ss.... which is only partially taxable.

 

[W2R]

I don't know about other forum members, but in my case I spent far less during my working years and during my first few years of retirement than I am spending now.

I have settled into retirement and know that I can spend more so I am doing that. The bull market has helped, as well as SS.

 

[Mulligan]

It must be. I am as surprised as Danmar. There is a lot of discussions on this board about spending less than 40K.

I couldnt vote because I use Tapatalk for this but I am one of those types. My yearly income including pension (which is the majority, not my investing prowess or lack there of). I sneak over 6 figures yearly but spend around 40k. I was relatively poor my entire life so I am firmly ingrained in my spending habits, plus I live in a rural low cost area. Who wants to drive 80 miles daily just to eat a "fine dinner"? If I ate at the local dives daily, I would just be fat or dead.
Besides I got catching up to do, from my poorer and more wasteful days.....My stash isnt going to corner the gold market, and never will.
But my dad is worse... We were talking about his finances and I asked how much they spend monthly. He said he didnt know, but usually they have a $1000 a month left over from SS and tiny pension. Well it was easy for me to tell him he is spending $3k a month. Has a million in assets all earned after 45 and making no more than 40k a year...And yet at 78 he still adds $1k a month in addition to the earnings. Its hard to change spending habits if you have little desire for things and vacations.

 

[NW-Bound]

Oh come'on, it's not likely going to happen. I think max is down 30% in a recession. But most likely down 20%.
I'm practicing fortune telling of course.

As I said elsewhere, there's no cataclysmic event now that would knock the market down that bad. Knock on wood (Hey, isn't that a repeat of the same word?).

But if you look at the mean of the poll result, a cut back of 50% is what it takes for many to go down to $40K/year. As a thought exercise, it's not bad to think about that worst case.

That's what distinguishes posters here from the couple described in the revived "Broken Eggs" thread, who checked out a mortgage to buy a million-dollar home while already in their 60s.

 

[Hermit]

I may be in the same boat as Mulligan where I don't spend my income, let alone investments in a couple of years. Right now, I am having no trouble spending income and then some. Once my house gets built, I should be down to under that magical $40k. But, then again, I sure would like a pickup like Senator has been talking about. And then I will need a couple of ATVs to keep me busy! I guess I don't have to worry about being in the same category with Mulligan's dad!

 

[Fedup]

It's true, GoodtoGo did mention in one thread, take a 40% hair cut and see if you can survive. But some retirement income don't entirely depend on the stock market so may not have to cut back so much.

 

[jabbahop]

I think I do understand this, it just seems like I'm such a lone voice here, Turns out I am not as alone as I thought? I think the difference of retirement spending vs income not that much of a issue as pointed out by NW bound? Some will simply use the spend numbers. If anything a pure definition of income will understate the figures, no? I guess taxes would be an issue? Many people will also view forecasted or realized cap gains as available to spend?

Anyway, I am a little surprised at the higher levels 40% have incomes over $100k. I would have pegged the median around $50 but looks like it is more like $75k? Maybe that isn't such a big difference but there are quite a few at higher levels.

I am drawing from checking/savings currently for spending over my dividend income. Once that runs down I will be drawing from taxable where I still have substantial losses I have harvested so won;t be showing taxable income for another couple of years. Now SPENDING is another matter ;-)

 

[RobbieB]

I see that the "income producing residence" is a topic of contention. Some people don't even consider it part of net worth.

For me it is easy. I own a home worth $350,000. If I were renting it would cost me $1600/mo. That's $1600/mo I don't have to pay. It's pretty much the same as if I had that much invested and sent that income to the landlord. And it's not that bad of an investment either. 1600 x 12 is $19,200. Reduced by the 2 grand property tax and also 10% upkeep it's $15,480. About 4.5%.

Granted a house is not a liquid asset and there are serious costs involved in selling as well as significant time delays. Unless you are fairly "well rooted", you are better off renting. However you do have to live somewhere and you do have to pay for it. Food, clothing and shelter eh? One of the "primary human needs"

Interesting discussion. I would like to hear why those of you who do not consider a house to be an "income producing asset" think that way. For me it's easy, I own a house and I only have to pay 2 grand a year plus upkeep instead of $1600/mo. Not have to pay out is sorta the same as getting extra dough?

 

[NW-Bound]

It's true, GoodtoGo did mention in one thread, take a 40% hair cut and see if you can survive. But some retirement income don't entirely depend on the stock market so may not have to cut back so much.

Our SS alone will be significantly higher than $40K, even if we take them early. So, if our entire egg basket gets crushed, we can still survive.

However, if I croak before my wife, and that is most likely, with only my SS which is higher, she may have to do some tightening. Or not, as I have been the bigger spender.