UnThreaded | Threaded | Whole Thread (28) | Ignore Thread Prev | Next
Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35397  
Subject: Re: The Net Worth of American Households Date: 1/7/2007 8:21 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
<Seems to me to be difficult to save when you're not earning. Unless they include all unearned savings also (i.e. something like saving some of your investment proceeds from a given year.)>

Of course, they include all income. Interest and dividends are an important part of retirees' income...if they were wise enough to save and invest, so they aren't just living hand-to-mouth, on Social Security.

It's unwise to retire, unless you know that you can live on less than your non-salary income. How can you know? You can keep accurate budget and expenditure numbers, and live below your means (LBYM) for years. You can do calculations, which project expected earnings from your investments (good resources at Motley Fool and www.fidelity.com).

If you plan to retire before you receive Social Security and Medicare, especially if you retire before age 59.5, you have to be sure that your nonretirement savings will produce enough income to cover all your living expenses, most notably private health insurance. (There is one way to tap into retirement accounts, without a penalty, before age 59.5 -- substantially equivalent distributions -- but I think that's a bad idea.)

Incidentally, I don't consider my investment income to be unearned, whatever the IRS may call it.

Do I spend less than my investment income? You bet I do. I've been a dedicated LBYMer, my entire life. I spend less than my taxable income...and that doesn't count the income in my retirement accounts.

When the government tallies up income, they include all income. The table includes retirement income, too. Where could they get the data for "all income"? Well, the IRS just happens to be a branch of the government :-).

Wendy
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (28) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Macro Economics

Russia Collapsing Again?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement