The Cash Flow Clock: For Retirees - Book - Page 98
The Cash Flow Clock
with our assets. It has everything to do with our
income and our expenses.
If our income in retirement (Social Security, pension,
rental income, etc.) is greater than our expenses, then
we won’t need to use our assets on a regular basis.
The number we need to reach in order to retire may
be relatively small.
If our expenses are greater than our income, then we
will have to rely on our assets to supplement our cash
flow on a regular basis. We not only need to save
more in order to retire but we need to have an
efficient income plan.
How much should we spend in retirement? The short
answer is – all of it. It is our money. We worked
hard for it. We should use it. The real answer is a bit
more complicated.
Even if we do want to spend every dollar of our
assets and have our last check bounce on our death
bed, it is impossible to do that unless we know
exactly when we are going to die. Assuming we
don’t have this information available, it is always a
good idea to leave at least some kind of cushion in
case we live a bit longer than expected.
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