Household cash flow plan
A net-worth chart hides the plumbing. This flow diagram traces every dollar the plan takes in — salary, withdrawals from each account bucket, the home sale — through household cash and out to spending, tax and whatever is retained, so the years that run a deficit are visible at a glance.
| Age | Inflow | Outflow | Debt service | Mortgage | Net worth |
|---|---|---|---|---|---|
| 45 | $120,000 | $116,235 | $26,092 | $343,158 | $1,553,833 |
| 50 | $139,113 | $132,337 | $26,092 | $302,870 | $2,177,630 |
| 55 | $161,270 | $151,983 | $26,092 | $250,216 | $3,011,374 |
| 60 | $186,956 | $174,758 | $26,092 | $181,399 | $4,124,802 |
| 65 | $170,581 | $170,581 | $26,092 | $91,457 | $5,414,578 |
| 70 | $167,502 | $167,502 | $0.00 | $0.00 | $6,132,609 |
| 75 | $1,360,654 | $219,841 | $0.00 | $0.00 | $6,774,985 |
| 80 | $265,063 | $265,063 | $0.00 | $0.00 | $7,601,729 |
| 85 | $331,354 | $318,238 | $0.00 | $0.00 | $8,378,365 |
| 90 | $405,303 | $377,550 | $0.00 | $0.00 | $8,973,427 |
| 95 | $455,876 | $440,127 | $0.00 | $0.00 | $9,386,752 |
Every fifth year, the year shown above, and the year the home is sold.
salary + withdrawals + home sale · Withdrawals are gross of tax.
spending + tax + debt service + retained · A deficit enters the diagram as an unfunded gap.
Σ sources = Σ uses · Every band that enters the hub leaves it.
assets = debt + equity · The same conservation, applied to the stock rather than the flow.
A clear path from inputs to results.
A net-worth chart hides the plumbing. This view shows what actually comes in and goes out each year — salary, withdrawals, the home sale — against spending and tax, so you can see the years that run a deficit and how the home sale changes them.
How to use
- Enter the household and its spending.
- Add the home value, appreciation and the age it is sold.
- Set the mortgage balance repaid at sale.
- Read the inflow/outflow chart and the deficit years.
The formula
Reference: Cash-flow view of the deterministic household projection, net of sale costs and mortgage (Brigham & Ehrhardt, Financial Management, cash budgeting).
Worked example
Age 45 to 95, $500k home sold at 75
- Income $120k, spending $80k.
- Home $500k growing 3% a year, sold at 75.
- No mortgage at sale.
- 1
The home is worth 500,000 × 1.03³⁰ = $1.21M at age 75.
- 2
Selling costs of 6% leave $1.14M of net proceeds.
- 3
That cash lands in the taxable account in the sale year.
- 4
Working years run a surplus; retirement years run a deficit funded by withdrawals.
- 5
The sale year is the single largest inflow in the plan.
Sale proceeds $1.14M · deficit years funded by withdrawals.
Interpreting the result
The sale year distorts everything around it, which is why a net-worth line hides the story. In the years before the sale, withdrawals do the work; after it, the taxable account carries the plan. If the sale slips by five years, the deficit years in between have to be funded from somewhere else.
Assumptions & limitations
- Deterministic returns and inflation.
- Selling costs of 6% and the stated mortgage balance.
- Proceeds move into the taxable account and are not separately taxed.
- No rental income before the sale.
Frequently asked questions
Why does the home sale matter so much?
It converts an illiquid asset into cash in a single year, which changes the drawdown order afterwards.
Can I model downsizing?
Enter a lower home value and the sale age; the difference is the equity released.
Is the gain taxed?
Primary-residence exclusions often cover it, but that is not modelled here.
Methodology last reviewed 2026-10-21. Results are informational and not financial or engineering advice — see our disclaimer.