Can Your Artwork Collection Fund Your Spending in Retirement?

One of the key determinants of how much you can afford to spend in retirement is the amount of assets
you have accumulated. All things being equal, the greater your assets,
the more you can afford to spend. This truism can readily be seen from
the following basic actuarial balance equation for personal finance.Present value of assets = Present value of future spending + Rainy day fundThis
equation, of course, is the basis for the Actuarial Approach and the
Actuarial Financial Planner models found in our website. The ratio of
the left-hand side of the equation to the present value of future
spending is the Funding Status metric we encourage you to use to
measure, monitor and make changes to your spending plan.Please
note that we are talking about spending your assets in this post and not
withdrawing x% of your investment portfolio that strategic withdrawal
plans, like the 4% Rule, encourage you to do. Other retirement experts
want you to think about withdrawals from your portfolio as annual income
(or paychecks) and to compare whether this amount exceeds your annual
expenses. Unlike these approaches, the Actuarial Approach develops a
spending plan based on your spending goals and all your assets (and
liabilities). It is not a withdrawal plan based only on some of your
assets.So, can your artwork collection (or your antique car
collection, or any of a number of other types of assets you may own) be
used to fund your spending in retirement? If you own the asset and can
sell it, then the answer is yes.Many households
have complicated financial situations and may own properties,
businesses, collectibles and other assets that they would like to use
for retirement, but these assets may not be easily valued or
artificially “converted” into income. If you have any of these types of
assets, you may wish to revisit our post of July 17, 2025
for tips on how to use the Actuarial Financial Planner workbooks to
value your hard-to-value assets and include them in your Funded Status
calculation.SummaryIf you are struggling
to apply the 4% Rule or some other systematic withdrawal approach to
your financial situation because you have hard-to-value assets, or your
financial advisor is not properly reflecting your hard-to-value assets
in their Monte Carlo models, we suggest that you switch to the Actuarial
Approach and use a better metric for managing your spending that
reflects all your retirement assets and spending liabilities—Your Funded
Status.