Passive Income composite

[racy]

44% my SS
30% DW SS
16% inherited variable annuity
10% deeds of trust interest

 

[ShokWaveRider]

I like the idea behind this thread, although I find it a little moot unless one knows what the total is. What I mean is, taking the numbers of post #26 above, if ones has an annual household income of say $50k, 74% covered by SS would be $37k., vastly different than if one had a household income of $120k.

BUT, it did prompt me to calculate our percentages for our household income. In our case the total would be over 100% as we get more in than we spend. Does one include income from annuities in this number? I know it is just for fun but I am just asking the question, as annuity income once set up could be classified as passive.

 

[COcheesehead]

I never consider capital gains or sales of investment assets as income. It might be for the IRS, but not for me. Income is additive, not just moving stuff around.

 

[ShokWaveRider]

I never consider capital gains or sales of investment assets as income. It might be for the IRS, but not for me. Income is additive, not just moving stuff around.

Depends, if one is living off it in retirement, and it is not "earned" as such, I would. It would have been better if the OP had laid out what would be considered passive income. If interest is included there is no reason why capital gains should not be. (For the purpose of this thread). I would also include annuity income.

As usual folks here are reading too much into it, me included, but I get the OP's point, and like the thread.

 

[COcheesehead]

Depends, if one is living off it in retirement, and it is not "earned" as such, I would. It would have been better if the OP had laid out what would be considered passive income. If interest is included there is no reason why capital gains should not be. (For the purpose of this thread). I would also include annuity income.

As usual folks here are reading too much into it, me included, but I get the OP's point, and like the thread.

I would consider annuity payments and interest as income because they are additive. Capital gains exist already in the asset value. All you are doing is moving it from one pocket to another.

 

[ShokWaveRider]

I would consider annuity payments and interest as income because they are additive. Capital gains exist already in the asset value. All you are doing is moving it from one pocket to another.

Only when the assets are sold or gains taken from them. Then it becomes income.

I think the OP should have stipulated that ANY income that is not "earned" would be counted. Although I would consider short term CG to NOT be included as this would be earned from a job called "Stock Trading" .

 

[Al18]

Lots of different methods people are reporting income. My interpretation is income is actually spent each year. I wouldn't consider income generated inside an IRA to be spent unless you withdraw it each year and spend it. I also wouldn't consider Roth IRA conversions as income. While it is a taxable event, you didn't actually spend it this year.

 

[MRG]

45% from our SS
CEFs provide another 25%
Boggleish investments provide the other 30%

 

[jollystomper]

Our passive income trend in retirement (we have had earned income, but I am following the thread title ):

 

[Flieger]

Lots of different methods people are reporting income. My interpretation is income is actually spent each year. I wouldn't consider income generated inside an IRA to be spent unless you withdraw it each year and spend it. I also wouldn't consider Roth IRA conversions as income. While it is a taxable event, you didn't actually spend it this year.

+1

Flieger

 

[SouthernHeaven]

OK @jollystomper wins for best visual. Nicely done!

 

[RunningBum]

I'm not clear if you are looking for taxable income or just that income used for living expenses or sources of money for living expenses, so I'm not going to try to break this down by %. Not really interested in doing that anyway since I don't see using that information for myself.

QDivs off index funds is much of it.
A few years ago I sold off a managed mutual fund and put proceeds in Fixed Income and gradually used that base for living expenses, so I consider part of that LTCGs, and the rest return of capital. You can call it what you want, your thread.
Interest income, mostly from the above diminishing stash, so it's less each year.
A small annuity in my Roth which gets deposited monthly in my checking account. Less than 10%, and not taxed.
A small pension starts later this year and will be less than 10%.
I will be taking a large HSA withdrawal (using past receipts) this year, also not taxed.
SS will start sometime in the next 5.5 years, not this year though.
Until SS starts I will be selling more of my index funds and incur LTCGs/return of capital.
I may also withdraw from my Roth before SS starts, and later for large expenses if I want to avoid more income.

 

[ShokWaveRider]

Not sure of the Percentages yet, I really do not track them that closely. No particular order of magnitude.

1) DH SS
2) DW SS
3) DH Annuity
4) DH UK Pension (UK SS)
5) DH Canada Pension (Canadian SS)
6) DH Canada OAS (Canadian SS)
7) DW Canada Pension (Canadian SS)
8) DW Florida State Pension

In Addition:

Return from 5 MYGAS
Return from DW & DH IRAs
Return from DH CD
Return from Schwab MM

No Stock Exposure.

 

[1242Vintage]

Just wrapped up taxes. Looking at income from our 2025 filing …

20% pension
2% social security
70% rental income
8% other investment income

After a very long career in private sector, wife changed careers to be a part-time school teacher for a couple years. At retirement she was hit by the windfall elimination provision on social security. Thanks to the repeal of WEP, her social security will be a bigger percentage of our income going forward. I haven’t started SS yet.

 

[Midpack]

fwiw... I don't consider Roth conversions or RMD as a passive income. In fact, it's an expense (taxes) in my book.

I get that. OTH it's income I am forced to take - since I have no choice I consider it passive. Soc Sec and dividends/STCG/interest also force "expense (taxes)"...

 

[Sue J]

Interesting.

For us -
DH's pension 68.5%
My SS 13.7%
DH's SS 6.4%
My part time income 11.4%

There is also interest income but we don't spend that. We live on less than DH's pension so all the rest goes to saving and investing..

 

[youbet]

1. Social Security x2
2. Pension
3. Dividends
4. Interest

The stacking order is accurate. #1 & 2 cover all regular expenses, and then some. The income from #3 is not all realized.

How do you not "realize" dividend income?

 

[target2019]

How do you not "realize" dividend income?

In an IRA or Roth?

 

[youbet]

In an IRA or Roth?

OK......... I can see looking at divs generated inside an IRA that you don't withdraw from as "unrealized." Of course, that implies that when you do withdraw from the IRA, it is realized income.

Thanks!

 

[Steelpony]

2025

1. Both cap gains and traditional bonds or levered bond types = about 11.5%.each. = 23%

2. SS = about 6% or so.

3. MM = a weekend trip.

We live off of SS plus an addition amount of about 2-3% of the monthly bond distributions. Everything left over is automatically plowed back in monthly into equities and traditional or levered bonds.

So we live on about 8-9% (SS + 2-3% bond income) of that and reinvest about 8-9% into bonds and leave equities alone to grow (11.5% last year).

 

[target2019]

OK......... I can see looking at divs generated inside an IRA that you don't withdraw from as "unrealized." Of course, that implies that when you do withdraw from the IRA, it is realized income.

Thanks!

AND when I did realize some IRA income this year, it wasn't from dividends really. I sold stock funds and withdrew cash.

I only spent a minute on my original reply, and didn't see any reason to calculate a percentage either.

 

[mrfeh]

Only when the assets are sold or gains taken from them. Then it becomes income.

I think the OP should have stipulated that ANY income that is not "earned" would be counted. Although I would consider short term CG to NOT be included as this would be earned from a job called "Stock Trading" .

I took the thread title literally for my response. And since I'm not working, all income is passive.

So, anything that went into my AGI last year was categorized.

 

[harley]

Early on after ER at age 50, I had a very difficult time getting a new mortgage due to lack of income. Almost everything was either in cash or pre-tax. So I spent a few years working on income. Now, 20 years later, I need to reverse the process. When I start RMDs in 3 years I'm going to be forced heavily into the 24% bracket, even after significant Roth conversions. I'm working on transferring the side gig to DD. But until then here's my breakdown:
35% side gig
35% SS (just started mine at age 70)
25% rental income
5% Interest and Capital Gains

 

[lem1955]

2025 (Big spending year)
SS (2) 14% (first yr for me)
Private Real Estate investment 23%
Inherited IRA 36%
Interest& Dividends 3%
Cap gains 3%
Taxable account WD 22%

Projected 2026
SS (2) 24%
Private Real Estate investment 25%
Inherited IRA 42% (may be able to save some in Taxable account)
Interest& Dividends 5%
Cap gains 3%

RMD for tIRA begins 2028, Inherited IRA and 2nd tIRA should be almost depleted.

 

[Winemaker]

No Roth conversions are not spendable income, but since all my income is "mailbox money", I took the question as taxable passive income.