Deferring "income" until needed in retirement without messing up cashflow in budget

This is a low priority question, but if someone has a good strategy, I’d be happy to hear it. I can’t shake the feeling that my mental model is wrong.

A fundamental reality of budgeting is normally that your income is what it is and you budget to have your expenses (at a maximum) not exceed that. Typically, each slug of income is a transaction from employer to my bank account, not under my control. But now that I’m retired, my “income” is actually withdrawals each month from retirement accounts, for which I control the timing. I put such a withdrawal into a checking account, and that is the “income” transaction.

When I was working, if I had a low expense month, the cash flow would be positive, but the flow of income in the following month didn’t change, so that month’s cash flow vs budget would be correctly calculated also. In retirement, if I have a low expense month and therefore extra dough in the checking account vs the budget, I don’t withdraw more money from the retirement account until just before needed (because of taxes and investment return). But as a result, there is no further “income” transaction for however long my checking account can handle my expenses, and cash flow in the “Monthly Budget” sheet for the subsequent month looks as if I am having a negative flow, even though I am not short of money for expenses. The “Savings Budget” fixes one small piece of this (by showing an accurate “Available” number for income), but even it shows cashflow as being in the red.

One fairly simple fix that occurs to me is to designate the withdrawals from the retirement accounts into my checking account simply as transfers. Then do a manual “income” item once a month of the budgeted amount. This would not actually come from or be deposited to any real account (so I guess I would have to make sure it is never flagged for reconciliation). That would work (because my “income” stays fixed each month). Any other ideas welcome.

– Michael

I think I understand the problem, @michael303, but I don’t know of a great solution. I don’t :heart: your manual income solution since it seems to be creating work to manually create cruft in your spreadsheet so the numbers match up.

I think you are right that the Savings Budget is helpful at managing the ebbs and flows of expenses. One idea might be to log the bank transfers as either Income or Transfer but hide them either way (in the Categories) sheet and only worry about if your expenses are in line with expectations over the budget month/year.