(11-29-2013, 05:46 PM)NilesMike Wrote: I'm not a big fan of selling assets, especially income producing assets, for additional income.
I agree, but that may not be possible for everyone, and it assumes that you've decided to die leaving your whole pile of income-producing assets intact. That's fine, but may not be everyone's choice.
A corollary of this discussion is that while we usually focus on the risk of not saving enough, there is a risk of saving too much. It is great if you happen to love your job and would keep working to generate more assets regardless of need, but if you would rather be doing other things -- time with friends and family, travel, volunteering -- then leaving tons of assets to your heirs or to charity represents an economic loss. The time you spent generating those assets in excess of what you needed to get through your life was time you did not spend pursuing your passions.
If the choice is between: (1) working until 68 to have enough income-producing assets to live off of without selling any of those assets (and leaving those assets to my heirs or charity when I die); or (2) only working until 62 and living off my assets through a combination of income and selling -- to maintain the exact same lifestyle as option (1) -- but leaving a lot less to my heirs or charity, I may well choose option (2).
And for many, option (1) may not even be an option at all. If you cannot save enough to generate the income stream you need, then you must consider using the capital itself as well as the income to fund retirement.