Other Income: Pensions, Annuities, and Property

Your portfolio and Social Security aren’t the only things that can fund retirement. RetireRange also models pensions, income annuities, and rental property — guaranteed or semi-guaranteed income that reduces how much you have to draw from your investments. Adding them makes your plan more realistic, and the guaranteed income is especially valuable in the early years, when leaning less on the portfolio protects you from sequence-of-returns risk.

Pensions

Add one or more pensions per person (or any fixed recurring income — military retirement, a defined-benefit plan, etc.):

• Monthly amount (in today’s dollars) and a start date.
• COLA — how it grows: none (fixed nominal), with general inflation, or a fixed rate you set.
• Survivor percentage — the fraction that continues to the surviving spouse when the pension holder dies (e.g., a 50% joint-and-survivor benefit). This ties into surviving-spouse modeling. A new pension starts at 0%, so it pays nothing to your spouse unless you set it — enter your survivor percentage only if your pension has a joint-and-survivor election. Leaving it at 0 is exactly right for a single-life pension: the model won’t invent a survivor benefit you won’t actually receive. (Annuities work the same way — 0% unless yours carries a survivor benefit.)

Pension income is taxable and flows into your yearly tax picture. See Taxes.

Retiring twice? If you drew a pension from a first career (military, police, fire, federal) and are now retiring from a second job, you model the second retirement and add the pension here — the walkthrough is in Already collecting a pension?.

Income annuities

Annuities (SPIA, DIA, or QLAC) work like pensions, with a couple of annuity-specific additions:

• Exclusion ratio — for a non-qualified annuity (bought with after-tax dollars), part of each payment is a tax-free return of your principal. Set the tax-free fraction here. (IRA/401(k)-funded annuities are fully taxable — exclusion ratio 0.)
• QLAC — a Qualified Longevity Annuity Contract held inside a Traditional IRA. Flagging it as a QLAC lets the premium defer the RMDs that would otherwise apply to that money until the annuity’s payments begin — a real longevity-and-tax planning tool. See RMDs.

Like pensions, annuities carry a COLA and a survivor percentage.

A note on the percentage fields. The survivor percentage (pension and annuity) and the annuity exclusion ratio must be between 0% and 100%. Enter something outside that range and RetireRange shows a clear error (e.g. "Alex: pension #1 survivor benefit of 150% must be between 0% and 100%") and blocks the run until you fix it, so a typo can’t silently change your plan.

Rental property (and modeling a home sale)

Add property at the household level. Each property can contribute two things to your plan:

• Net rental income — a monthly amount (with its own start/end dates and growth rate, or general inflation), added to your spending power.
• Appreciating value — the property grows at the appreciation rate you set and counts toward your total portfolio and legacy.

You can also model a sale: set a sale date and the net proceeds (in today’s dollars — net of selling costs and any replacement home, i.e. only the cash that actually reaches your portfolio, since the model makes the full amount available to spend), and RetireRange deposits that lump sum into an account you choose when the sale happens — point it at a taxable (brokerage) account, since a cash windfall like a home sale can’t go into a 401(k) or IRA — the dropdown lists only Taxable accounts, so you can’t misroute it. That’s exactly how you model downsizing your home: set the rental income to zero, give it a sale date and the cash you’d free up, and the proceeds land in your taxable account. See what if I downsize my home?

Why it matters

• Guaranteed income is longevity insurance. Pensions and lifetime annuities keep paying no matter how markets or your lifespan turn out, and they’re inflation-aware if you give them a COLA.
• Less portfolio strain early = lower sequence risk. Every dollar of outside income is a dollar you don’t withdraw during the portfolio’s most vulnerable years.
• Survivor protection. Set survivor percentages so the model reflects what the surviving spouse would actually keep.

For how these streams show up in your results, see Understanding your results; unfamiliar terms are in the Glossary.