Hi,
I checked spending rates that show up in this table (Essential, Non-essential, Overall) and seems like they don't take into account SS Income. This may be correct for what these columns are described as, but it would be more useful (for me) to know my spending rate from assets (e.g., 4% rule etc.). Is this shown somewhere?
Thanks,
-Steve
Hi Stephen, this is Charlie Stone with Pralana. If you click on the little circled i in the column heading for the Overall Spending Rate column, it says this metric is Total Expenses / Prior Year-End Total Account Balances. Is this not the metric that you are are looking for? To the left are columns for both the numerator (Total Expense) and denominator (Total Account Balance).
@email12520gmail-com It sounds like you're looking for spend rate against "income" or cash flow, rather than "spending rate from assets (e.g., 4% rule)". If you are spending LESS than your SS income, the unspent SS income would end up in the cash flow that ultimately affects your Total Account Balance (as an asset), all else being equal. If you're spending MORE than your SS income, some portion of your Total Account Balance (asset) would be converted to income (cash flow) to cover your expenses. If you are trying to find spending rate vs income, it seems you'd have to calculate it for a given year from Review>Tabular Projections>Cash Flow, Cash Flow Statement. SS income is included in Total Spendable Income.
Thanks for the responses.
-Steve
Using an example. Asset Balance $1M, Yearly expenses $100K, SS income $50K. From what I can tell looking in the Expenses table, Spending rate is calulating as Expe ses / Balance = 10% (i.e., income isn't taken into account). I was expecting [Expenses - ss] / Balance = 5%. I'm sure that income (ss etc) are handled correctly, but just on the Expenses sheet, it seems like the spending rate doesn't include income (which may be correct - just different than I was expecting).
Update: I found what I was looking for as "Withdrawl Rate" (Review->Tabular Projections->Cash Flow: Withdrawls)
Thanks 🙂