Course 310: How to Withdraw from Your Portfolio in Retirement
Other Sources of Income--and Taxes
In this course
1 Introduction
2 Find Your Asset Mix, Time Horizon
3 Determine How Confident You Want to Be
4 Find Your Withdrawal Rate
5 Estimating How Much of Your Portfolio You Can Spend
6 Other Sources of Income--and Taxes
7 Making Refinements

Many retirees rely on some fixed sources of income--things like Social Security, pensions, or annuities. The more fixed sources of income you have, the loweryour withdrawal rate from your portfolio can be.

The only trouble with fixed sources of income: inflation. Unless your fixed sources of income inch up as inflation does, you'll need to adjust your withdrawal rate over time to compensate for the income "lost" to inflation.

Enter your fixed sources of income on the worksheet. Add them to your withdrawal amount from the first year.

Let's go back to our previous example. If you expected to receive $12,000 per year from Social Security and another $10,000 per year from your pension, you would have total pretax income of $52,000--your withdrawal plus Social Security and pension payments.

Of course, that's before taxes. Subtract the amount you owe in taxes from your total income on the worksheet. This figure is the total income you'll have your first year in retirement after taxes.

Next: Making Refinements >>


Search
Print Lesson |Feedback
Del.icio.us Del.icio.us | Digg! digg it
Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.
Copyright 2015 Morningstar, Inc. All rights reserved. Please read our Privacy Policy.
If you have questions or comments please contact Morningstar.