Income Over Wealth

A bigger balance rarely quiets the worry about running out of money in retirement. Dan runs the same $1.5 million from 2000 through 2007 on real S&P 500 returns, once selling shares to pay every bill and once with the bills covered by private mortgage note income, a year of cash set aside, and the rest left in an index fund. He then runs a second test starting in 2010, the decade when selling shares came out ahead. Like any investment, a note carries risk: the money is committed for the term, and a borrower can stop paying.

• What 3 straight losing years did to $1.5 million when every bill was paid by selling shares
• Why you don't get to pick your decade, and what the 2010s test showed
• How to work out your own number with 2 lines on a piece of paper

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=yUgvSEWgBhA

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

Your monthly bills are only part of the answer. This episode prices one couple's $7,000-a-month life at each target age, starting with what health coverage costs once the job stops paying most of it. KFF puts the average family premium at $26,993, with the employer covering about three quarters. Dan also covers which savings are allowed to pay you before 59 and a half, and how long the income has to keep up with prices when you plan to 95.

• Why the 10% early withdrawal penalty matters more at 50 than at 55
• How the Rule of 55 works, and the accounts it doesn't cover
• Why stopping at 50 is mostly about where your money sits

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=c8CC41z8SmU

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

Dan left the Air Force at 33 and let 6 rental properties pay every bill, including about 2 years of slow travel. This episode covers what a spreadsheet leaves out, from tenants who pay on their own schedule to the 3 months it took for the stress to wear off. The harder question turned out to be what to do with his days once work was optional. He closes with what carries over if you're 55 with bigger bills and no interest in becoming a landlord.

• Why income that shows up every month made leaving possible when a savings balance wouldn't have
• How $4,000 a month from 6 rentals compares to $1.2 million under the 4% rule
• Why the same health plan costs almost twice as much at 55 as at 33

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=e44Ro_nu46c

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

If most of your savings sits in the stock market, it only pays you when you sell shares. This episode prices the same $5,000 a month from dividend stocks, rental houses and private mortgage notes, and grades each one on what it asks of you and where it falls short. It also looks at what an 18% market drop does to someone whose bills are covered by notes.

• Why a dividend check still moves with the market, using the 2009 cut
• Where a rental fails the paycheck test, even at a 7.4% cap rate
• Why a note fits inside a self-directed IRA and a rental runs into the IRS rules

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=G1VXyV4lSwQ

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

The 4% rule tells a 56-year-old with $900,000 and $6,000 a month in bills that he needs $1.8 million, which means 8 more years of work. This episode prices those same bills as monthly income using private mortgage notes and shows how the date he can stop working moves years sooner. It also covers what can go wrong with notes, including borrowers who stop paying and payments that never rise with inflation. No Social Security is counted anywhere in the plan.

• Why your retirement number should come from your bills instead of your salary
• What health coverage before 65 costs, with KFF putting the average benchmark plan for a 60-year-old at $15,914 a year with no subsidy
• How to cover your bills in stages while you're still working, and why he keeps working 3 more years

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=s5GMqRBcPq4

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

This episode prices three retirement balances two ways and shows each one in dollars per month, with no Social Security in any of the numbers. The first way is the 4% rule, where everything stays invested and a little gets sold every month. The second is how Dan would set it up with his own money: private mortgage notes cover the bills with 12 months of cash behind them, and the rest stays in stock index funds that never get sold to buy groceries. It ends on a reader in his early 50s with $2.3 million and $7,000 a month of fixed bills, run both ways.

• What the 4% rule pays at each balance, and what Morningstar found in nearly 70% of the plans that ran out of money
• How each balance splits under the income approach, using the 8% to 12% market range for mortgage notes published by The Entrust Group, and which retirement accounts can hold a note
• What can go wrong with notes, from borrowers who stop paying to a payment that never gets an inflation raise

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=-tmnBnfg4tg

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

A couple both 62, with $1.2 million in a traditional IRA and $850,000 in a brokerage account, get one $500,000 Roth conversion priced out year by year. The same $100,000 runs about 30% at 63, about 11% at 65 through 69, and about 24% at 71, while the federal bracket at 63 and 65 is identical. What the conversion runs into is what sets the price. This episode follows the math from the first $50,000 through what the couple has left after tax at 92.

• Why the first $50,000 converted at 65 costs $1,450 and the second $50,000 that same year costs about $9,900
• The two ceilings that appear on no tax table: the marketplace subsidy cliff at $84,600 and the Medicare surcharge line at $218,000, which sits $28,900 below the top of the 22% bracket
• Why most of the saving lands in the years after one spouse dies, and the five things that break the whole case

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=IgZvX8hERgw

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

Whether you can retire comes down to five obligations: your housing, your kids, your health coverage, the years before your benefits start, and whether your money pays you without being sold. Your account balance is not on the list. A household at $900,000 that has cleared all five is further along than a household at $2 million that has cleared two. This episode gives the threshold for each condition and a check you can run on yourself.

• Why ending a $1,600 monthly mortgage payment does the same work as saving another $480,000
• What health coverage costs before and after Medicare, and why the pre-65 gap depends on your own zip code and income
• The J.P. Morgan finding that households with the same wealth spend 44% more when most of it arrives as guaranteed income

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=OH-bPzLNQmU

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

Where you keep cash in retirement comes down to what each dollar has to do. This episode ranks four places retirement cash sits for one job: the money you plan to spend. It walks through the real rates on each and what backs them, then covers how much of your money belongs in any of them.

• Why the same $100,000 in cash earns about $10 a year at one big brokerage and about $3,300 at the same firm on the same day
• Why the account paying the most today does not rank first, and how the answer flips inside an IRA
• The sizing rule for a cash cushion, and the study where five years of withdrawals in cash took the failure rate from under 10% to over 25%

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=rItYwOprLe4

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

Workers say they will stop at 65. The people who have actually retired stopped at 62, and 46% of them went earlier than they had planned. This episode walks through the 8 decisions that come due in the years before that date and what each one costs if you meet it late. At 55, every one of them is still open.

• Why rolling a 401(k) into an IRA on the way out can permanently cost you penalty-free access to it
• How the tax return you file in the year you turn 63 sets your first Medicare premium
• What the research says separates retirees who feel comfortable from the ones who don't

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=TEfjxxsSVCU

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.