Author Topic: Retired 6 years..  (Read 2458 times)

iris lily

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Retired 6 years..
« on: May 08, 2021, 07:38:43 PM »
....oops, never mind...
« Last Edit: May 15, 2021, 04:03:13 PM by iris lily »


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Re: Retired 6 years...most income ever
« Reply #1 on: May 08, 2021, 07:44:51 PM »
Congratulations @iris lily. Your experience mirrors a few people I know - they earn more in retirement than they ever did from working.

One thing I've always wondered about those income "league tables" is how they account for a lot of people who earn income in private companies and trusts (and retirement funds), but keep the money within those vehicles, hence they never show up on individual tax returns as taxable income.

But yes, it's phenomenal how much more can be gained from the "unearned" assets than the "earned" income sources.


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Re: Retired 6 years...most income ever
« Reply #2 on: May 09, 2021, 07:41:35 AM »
Not I. But my stash is a modest one, thinFIRE by some standards, arguably one step away from ERE.

My income (roughly 23k according to me, 14k to 20k gross per IRS) is definitely lower than my average from work (maybe 35k average after tax, depending on calculation details, and inflation adjusted); it's far lower than peak income from work (about 45k after tax, maybe 51k inflation adjusted. I'm about 7 years in). Also, stash is not mostly stock, over half is real estate equity. My house has rocketed in value but that has created little to no income.

And as Marty998 pointed out, most of the stocks i do have are in retirement accounts (IRAs, a 401k). Even selling a stock there to realize a gain produces no income for me.

Longer term, I figure if my spending is "safe" (stable) during down markets (I don't have to cut spending), it also should be stable in "up" markets. So I don't view myself as having a changed situation, really. Plus, since my wiggle room is low, I'd just view any sustained gains as safety layer.

Looking forward to the other replies though. Time to live vicariously. Maybe the bigger incomes will inspire me to un-retire! :)

In any case it's good for people to see ER is safe. Congrats on the exciting results.
« Last Edit: May 09, 2021, 07:58:58 AM by BicycleB »


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Re: Retired 6 years...most income ever
« Reply #3 on: May 11, 2021, 09:12:08 PM »
I harvested some capital losses in 2020 and dividends got cut, so not me!

If you are experiencing taxable income beyond what you need to live on, you may want to adjust your portfolio in the following ways:

1) Set your AA to be more conservative. You can alway dial it up again if the SHTF some day, and that's a nice position to be in.
2) Reduce your holdings of dividend-paying stocks, and pivot toward the broader indexes.
3) If you had any earned income, you could move it to tax-sheltered accounts like IRAs. Sounds like this is not the case.
4) If it looks like you will overshoot any portfolio survival or SOR risk, might as well start gifting and donating. Being a rich philanthropist is the end goal, not buying stupid crab because the money is piling up and has to be spent somewhere.


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Re: Retired 6 years...most income ever
« Reply #4 on: May 11, 2021, 09:28:23 PM »
I am reeling at our income this year (just got our tax package back from our preparer.) Good lord, we have never had this much income.We are in the top 5% of 2020 income earners according to this chart:

And all of it “unearned” in the parlance of the IRS.

Now I’m thinking the barbarians at the gate will be coming for me soon. Here I was, fairly comfortably distant from that evil 1% but now...yowza.

Granted this chart covers 2019 numbers and perhaps 2020 is much higher.

Are you other retirees seeing this jump in income?

What is driving your income gains? Is it simple dividend increases or have you been rebalancing into yield?