Who counts part of their home value as "retirement savings"
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For most of us , when we reach retirement all we have is retirement savings .
There is no distinction in liquid assets
There is only a distinction between retirement money that is part of the income generation pool and net worth which includes non liquid assets and assets of value we choose not to sell or sell yet
Agreed on the first order to separate retirement savings from net worth.
But some of us further distinguish retirement "savings" into retirement "income" and "savings".
"Income" will include Soc. Sec. income, pension (if withdraw as an annuity), and investment incomes (annuity, dividends, rents, etc.)
"Savings" are the cash you have in your accounts, safe deposit box, and under the mattresses.
Income streams are income streams , they are not savings .
You may add some of it to savings / investments but they in themselves are considered sources of income
Social security, pensions , annuity income , alimony , rental income , structured payouts , etc are all considered income streams . Money from future income sources that is not in hand are not your savings for purposes of creating a retirement income from savings .
Income sources like the above I mentioned have nothing to do do with money we accumulated invested and saved which makes up the short falls between our income streams and what we have to provide from our own piles of money.
When determining whether your pile of money allocated the way you will allocate it , first all income sources are subtracted out of what we need first .
Then what is left is stressed tested by the likes of firecalc or the fidelity planner to see if your savings / investments can safely fill that gap.
Last edited by mathjak107; 01-17-2022 at 03:21 PM..
Income streams are income streams , they are not savings .
You may add some of it to savings / investments but they in themselves are considered sources of income
Social security, pensions , annuity income , alimony , rental income , structured payouts , etc are all considered income streams . Money from future income sources that is not in hand are not your savings for purposes of creating a retirement income from savings .
Income sources like the above I mentioned have nothing to do do with money we accumulated invested and saved which makes up the short falls between our income streams and what we have to provide from our own piles of money.
When determining whether your pile of money allocated the way you will allocate it , first all income sources are subtracted out of what we need first .
Then what is left is stressed tested by the likes of firecalc or the fidelity planner to see if your savings / investments can safely fill that gap.
It doesn't matter how you classify it. It is unrealistic to ONLY consider "savings" and "net worth" in your retirement.
Call it however you like, income stream vs retirement income. The key word is "income" that means you have money coming into financing your retirement.
Failing to account for it is a big miss that you failed to mention in your post.
It doesn't matter how you classify it. It is unrealistic to ONLY consider "savings" and "net worth" in your retirement.
Call it however you like, income stream vs retirement income. The key word is "income" that means you have money coming into financing your retirement.
Failing to account for it is a big miss that you failed to mention in your post.
Who said you only consider savings ? Everyone figures their income streams in to the calculation.. but the items I listed above are not considered savings….
Retirement income consists of your income sources AND THE INCOME YOUR SAVINGS CAN ADD TO THE PARTY.
But income sources are not part of savings , they get added to the income your savings can create.
It is a very important distinction because your savings / Portfolio is handled differently to determine your allowable draw from it.
Your draw is determined by a retirement calculator that will stress test your portfolio portion to see what it can safely provide so it is important to realize that income streams that are added to your total cash flow are not entered like a portfolio would be.
It isn’t call these things what ever you want , there is a reason these things are referred to separately with different terms.
A reverse mortgage would also be considered an income stream not savings
Last edited by mathjak107; 01-17-2022 at 03:52 PM..
I know at your age, the CRS is a real possibility. So let me refresh your memory below...
Quote:
Originally Posted by mathjak107
For most of us , when we reach retirement all we have is retirement savings .
There is no distinction in liquid assets
There is only a distinction between retirement money that is part of the income generation pool and net worth which includes non liquid assets and assets of value we choose not to sell or sell yet
I know at your age, the CRS is a real possibility. So let me refresh your memory below...
Exactly what I said , read it again .
once you retire ALL SAVINGS BECOME RETIREMENT SAVINGS unless it is money you are setting a side for a car or wedding or some large expense ..when working many people have a distinction between their taxable accounts ear marked for living today and raising a family and expenses they have that their pay checks don’t carry .
Their retirement money they accumulated is separate.
That goes away once you retire as all money carried over into retirement is now retirement money .
It is all used to calculate what you could potentially draw off it if you wanted to or needed to .
It has nothing to do with other income sources you will have .
Perhaps crs is effecting your ability to understand what was meant by that statement.
No where does my post refer to income sources like ss , pensions which are NOT SAVINGS
Quote:
Originally Posted by mathjak107
For most of us , when we reach retirement all we have is retirement savings .
There is no distinction in liquid assets
There is only a distinction between retirement money that is part of the income generation pool and net worth which includes non liquid assets and assets of value we choose not to sell or sell yet
Last edited by mathjak107; 01-17-2022 at 04:35 PM..
Not retired yet but my house will yield a big payoff whenever I sell it and whatever is left after buying my next place will become part of my retirement savings.
Anything from a business, to property to collectibles or even personal items you can sell and be converted to cash can be counted .
However it depends how close to retirement you are and for what purpose are you calculating .
If I was trying to calculate my draw and I was retiring next year I wouldn’t bank on that money yet in my calculation…..if I was a decade away well I would ball park it all in , FOR A GUESS AT TODAYS VALUE of my worth ..
Like anything where values fluctuate, maybe that is what I will have and maybe it isn’t.
I was way off my early projections when after 17 years of almost 14% returns from 1987 to 2003 markets went flat for a decade.
I never wasted my time again projecting out decades …..when I got close to retirement I looked at what I had to work with and that was it .
It is what it is and there was nothing I was going to do that wasn’t already done to alter that number.
Imagine looking at your balance even a year before retirement with a million dollars in 2007 and planning on 40k from that portfolio but when you retired a year later you were no different than someone with 700k and a 28 k draw with a balanced portfolio.
All I ever was concerned with is my net worth yearly as it stood …I never tried to project out and guess what will be , as it served little purpose .
My buddy lost his job as sales manager for a National pharmaceutical company in his late 50’s
He had a lot of trouble finding a job like he had and spent a lot of money earmarked for retirement over the years . He worked as a waiter .
Once they decided to retire they couldn’t retire here in nyc ….they fell way short and it would have been a very stressful life here sweating every bill .
So they ended up leaving family and friends and moved to florida …..they are not thrilled about life there but they had to do what they had to do when the time came and they saw what they actually had to work with.
That was an outcome never in their projection
Last edited by mathjak107; 01-18-2022 at 03:28 AM..
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