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The Income Floor Worksheet
How much of your life is already paid for before you touch your investments?
What your life costs, what income already shows up, what your investments need to provide, and whether that still works in a bad market.
You probably know roughly what your retirement accounts are worth. That number matters, but it doesn't tell you what retirement will feel like month to month.
What does the Income Floor Worksheet ask you to add up?
Two numbers: what your life costs, and how much income shows up without having to sell an investment.
Start with the life you actually live, not the version of your budget you think you're supposed to have. The worksheet takes what regularly leaves the checking account, then the expenses that don't happen every month but still happen. Then it takes the income that arrives without selling anything, for many people Social Security and a pension, at the amount that actually reaches your checking account. The difference is what your investments may need to provide each month.
There isn't a magic percentage that makes a retirement plan good or bad.
What happens to that gap when the market falls?
The worksheet puts you two years into retirement in a falling market, with your dependable income still arriving, and asks where the rest would come from, whether you would take the same amount from your investments, and which part of the answer you are least sure about.
The useful question is whether you've decided how the gap gets funded before a bad market, an unexpected expense, or a change in your life makes the decision for you.
What this is, and is not
Four short sections that end in three lines, with worksheets you can fill in on screen or print. Two sourced charts sit beside them: what can come out of a Social Security benefit before it reaches your checking account, and each time since 1960 the S&P 500 fell by a quarter or more, with how long it stayed below its old high.
It is education, not advice. It does not know your tax picture, and the worksheet's numbers are the ones you write in.
Inside the guide
- What your life actually costs. Your normal monthly life, then the expenses that don't show up every month.
- What already shows up. Social Security, a pension, annuity income, and what actually reaches your checking account.
- Now compare the two. What your investments may need to provide each month.
- Now put yourself there. Two years into retirement, the market falls. Where would the money come from?
- Your number. The whole worksheet in three lines, and one more question.