We just had 2 METAR polls regarding income. Notehound asked about taxable income, which can include many non-income factors that can mess up the results. DrBob2 asked about maximum household income, which could be many years ago for retired people.
Neither of these answers the question: what is your current income that can be used to pay for expenses?
Cash flow is King!
This is the income that can be spent without cutting into principal and assets. Please include earned income, dividends and interest from all sources (including trusts), retirement income (e.g. Social Security, annuities, pensions), and income from tax-deferred and tax-exempt accounts, such as Traditional and Roth IRAs. Don’t pay attention to taxation or the potential penalties from premature sale of bonds or CDs that you plan to hold to maturity.
Do not include unrealized capital gains. Several METARs have substantial capital gains but those are volatile (depending on market conditions) and not the same as cash flow.
As a point of reference, the median U.S. household income was $67,521 in 2020, a decrease of 2.9 percent from the 2019 median of $69,560.
- < $100,000
- $100,000 - 250,000
- $250,000 - 500,000
- $500,000 - $1,000,000