Any near term FIRE members reconsidering?

[purplesky]

Watching the Dow and S&P take a sharp downturn....not liking the trend...but not panicking and holding my ground.

BUT - it is making me concerned/worry about my plans to FIRE in '15.

If the market continues to sell off and slide - I may have to face OMY

I don't want to start FIRE with a 'bad sequencing'.

Anyone else feeling the same way?

You are going to see many downturns throughout retirement so I wouldn't worry about it.

If you are truly diversified(bucket strategy) and have several years of cash on hand you should be good to go. If not. You need more buckets.

 

[papadad111]

i agree with others who say this is hardly a blip.

A correction doesnt occur until a 10% fall. A bear market not til 20%.

SP500 still up for the year
Even Russell 2000 is down just a couple percent this year...

peanuts. normal volatility. buy the dips.

if this small "normal" september-october dip is causing anxiety, maybe you're not as ready as you think to retire. We've not been in correction territory in 3+ years. It's actually quite healthy for bull markets to correct now and then. Best we did was -6% back in Feb if I recall.

We need 10%. personally I'd like to see 15% with an excuse being Ebola or Fed raising rates or something like that. Good to wash off the decks now and again.

Keep to your strategy. Dont panic. Dont fear.

 

[BBQ-Nut]

Snarky reply from Wednesday

Oh, market is recovering a bit this AM - is everything OK now?

-ERD50

Snarky replay today - no

 

[ERD50]

Snarky reply from Wednesday

Oh, market is recovering a bit this AM - is everything OK now?

-ERD50

Snarky replay today - no

It wasn't snarky. It was just an observation that markets go up and down. Even today's (or this week's) drop is just a blip in the long run. Look at a long term chart.

If a long term investor got scared over every drop of this order, they'd be out of the market again and again. And when would they get back in?

edit/add: after going back to look at my post, I see you left out all the analysis I put into it. That last comment was just an 'exclamation point' to my previous comments. If I just wanted to be snarky, there wouldn't be any analysis, just something 'pithy'. Something bugging you?

-ERD50

 

[pb4uski]

If I were retiring now I would bake in a 20% correction and see if I was still good to go.

 

[Live And Learn]

If I were retiring now I would bake in a 20% correction and see if I was still good to go.

Agree, and I've been doing that all along. Without a correction I wouldn't feel "good" without 100% success; with the correction factored in I'm ok (but still somewhat nervous) with a 95% success rate but I keep trying to remind myself of the upside potential.

 

[2B]

If I were retiring now I would bake in a 20% correction and see if I was still good to go.

I have my worst case scenario set so I'd still be ok with equities going to zero. Obviously, that would indicate far greater problems and that the fixed income may no longer be good.

 

[Throwdownmyaceinthehole]

If you're crying, you should be buying.....

 

[Corporateburnout]

If I were retiring now I would bake in a 20% correction and see if I was still good to go.

Before I retired in June I adjusted my AA and planned on a 40% correction on the equity side of my portfolio.

My former employer hinted on my return for a project in January and I respectfully declined. Just the thought of having to be in the office again makes me anxious.

 

[Live And Learn]

40% planned correction ? 100% equity wipe out ? I thought I was conservative .... I look like a rebel

 

[Major Tom]

This is one of the advantages of a conservative WR - less need to be concerned or nervous about possible corrections/downturns/bad sequences etc. If you're withdrawing the maximum suggested by Firecalc (or even more, if you're one of the folk who profess to be comfortable with a less than 100% success rate), then you may have reason to be more concerned than, say, an individual who has a 2% WR.

If, during good times, you're one of the folk who claim to be comfortable with a 90% Firecalc success rate, I suspect you'll be one of the first to get a bit nervous whenever a bull market takes a breather, or hints that it might be getting ready for a correction or downturn.

I'm not proselytizing for a conservative approach, but am pointing out that if you live a bit closer to the edge, it really helps to be comfortable with edges.

 

[tuixiu]

If you're withdrawing the maximum suggested by Firecalc (or even more, if you're one of the folk who profess to be comfortable with a less than 100% success rate), then you may have reason to be more concerned than, say, an individual who has a 2% WR.

Well of course.

On the other hand the person with the goal of a 2% WR might have even less concern since they aren't retired yet, what with need to throw in enough extra working years to have double the nut of the 4% person.

 

[Corporateburnout]

40% planned correction ? 100% equity wipe out ? I thought I was conservative .... I look like a rebel

Recent history of the great recession in 2008 the stock market dropped 40%. It would be prudent to plan for another hoping it will not happen.....

 

[TrvlBug]

DH is still planning to retire next spring and, in fact, we'll most likely pull more $ from our HELOC to fund our remodeling than originally planned. We'll use the cash portion we had saved for the reno to take advantage of the buying opportunity presented.

 

[BBQ-Nut]

I ain't feeling better....

I am staying put on my holdings however, but I am going to keep my cards close to the vest and not tip my hand on giving notice just yet.

 

[Live And Learn]

I ain't feeling better....

I am staying put on my holdings however, but I am going to keep my cards close to the vest and not tip my hand on giving notice just yet.

Today is an interesting exercise in trying to stay calm (which I am). But I am thinking of changing my AA to allow me move some $ from cash and short term bonds to equities.

 

[BBQ-Nut]

Today is an interesting exercise in trying to stay calm (which I am). But I am thinking of changing my AA to allow me move some $ from cash and short term bonds to equities.

But is the market at or near the bottom? If not then people may be more inclined to add fuel the fire and bail out of equities

 

[NW-Bound]

If this bitty blip of the market causes one to do OMY, then he/she should continue to work [-]forever[/-] until death.

How is he/she going to keep from jumping off a high-rise in a really bad year like 2002 or 2009?

 

[Live And Learn]

I don't know if its the bottom, but I do know that we're having a bit of a sale with Dow being 8.6% below high. Will it go lower ? Maybe but I can't predict. I had been thinking of moving from 50/40/10 to 55/35/10. Now seems like as good a time as any.

We'll see what happens re OMY if it keeps going lower. Worst case I think I'll try and get a very P/T job making 6-8k a year to keep me at 3% WR.

 

[ERD50]

if this bitty blip of the market causes one to do omy, then he/she should continue to work [-]forever[/-] until death.

How is he/she going to keep from jumping off a high-rise in a really bad year like 2002 or 2009?

+1


-erd50

 

[NW-Bound]

... Worst case I think I'll try and get a very P/T job making 6-8k a year to keep me at 3% WR.

I would first cut out on the foie gras and truffle, then put my motorhome on blocks, then sell my 2nd home, then eat more ramen instant noodle, etc ...

Oh wait. When was the last time I bought foie gras and truffle? Darn, the 1st step is then the RV'ing curtail. That hurts!

 

[Major Tom]

I would first cut out on the foie gras and truffle, then put my motorhome on blocks, then sell my 2nd home, then eat more ramen instant noodle, etc ...

Oh wait. When was the last time I bought foie gras and truffle? Darn, the 1st step is then the RV'ing curtail. That hurts!

Or sell both homes and go boondocking in the RV!

Oh, hang on, I just remembered that DW wouldn't approve

 

[NW-Bound]

If it gets really bad, she would not have a choice.

Note that I said "put the motorhome on blocks", not to sell it. That last resort has always been in the plan, heh heh heh...

 

[rodi]

Today made my belly cringe a little. But it is what it is. I'm not selling anything. I did consider the options if this turns out to be a longer term trend. I don't want to go back to work, and I don't have multiple years of living expenses set aside... but I do have the money for our big Europe trip next year set aside in cash. (Family of 4, all summer, $ set aside are more than half of my planned investment funded spending.) If it continues to be gloomy in spring, we'll postpone the trip so I don't have to sell equities in a down market.

Best case scenario - the market melts down enough to create serious bargains in airfare and rental apartments, all while the dollar gets stronger (yeah right - those two don't go together) and I can take the vacation for less money.

 

[REWahoo]

For those of you who are nervous about what's going on and weren't around (or weren't paying attention) for the 'market unpleasantness' in 2008/09, try to visualize what happened today continuing for 18 months - and not stopping until the market takes a 50% haircut.

Better buckle up...