Q. When I use the 4% withdrawal rule to calculate retirement money, should I include the house value?
A. No, you should exclude non-liquid assets in your 4% withdrawal calculation.
For example, if your retirement assets is $2 million, and your house is worth $1 million with $800,000 equity in it, you should only use the $2 million to calculate the 4% withdrawal.
If you sell your house and received the $800,000 cash, then bought a $500,000 smaller house, then you can include the now liquid $300,000 into the base for calculation.
A. No, you should exclude non-liquid assets in your 4% withdrawal calculation.
For example, if your retirement assets is $2 million, and your house is worth $1 million with $800,000 equity in it, you should only use the $2 million to calculate the 4% withdrawal.
If you sell your house and received the $800,000 cash, then bought a $500,000 smaller house, then you can include the now liquid $300,000 into the base for calculation.
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