There are two important terms related to withdrawals at Boldin, and those are Savings Drawdown and Shortfall Withdrawal.
Savings Drawdown represents the total amount withdrawn from your savings accounts for a specific year. Savings Drawdowns may include withdrawals made to cover shortfalls, fund one-time expenses, purchase annuities or real estate, or make lump-sum debt payments.
Shortfall Withdrawals are a specific type of savings drawdown which represent withdrawals that fund expenses and taxes when regular income sources—such as employment income, Social Security, or pensions—are insufficient. When a shortfall occurs, the planner automatically generates withdrawals based on your selected Withdrawal Strategy and Withdrawal Order.
Learn more from Nancy in this video:
One thing you may want to be aware of is that interest income is not used to fund expenses. So, it may appear that the income funds expenses, but you are also experiencing a savings drawdown.
PlannerPlus users can look at the Surplus-Gap chart to see their income compared to expenses and identify annual surpluses and gaps.
If the years where there are "Funded Gaps" or light red bars pointing downward you have an annual Savings Drawdown.
Another thing you’ll want to be aware of is that there may be years where you have shortfall withdrawals but no net savings drawdowns. Under the hood at Boldin, expenses are paid monthly, while our charting reflects annual amounts. So there are times when shortfall withdrawals are taken in January or February to pay expenses and taxes yet the income received so far is insufficient to fund those expenses. In this case, shortfall withdrawals are taken but replenished prior to year end when more income is received. In the years where you see a saved surplus and a gap you are likely drawing on savings to cover expenses early in the year and do not have you have an annual Savings Drawdown.
