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Bear Mkt has begun.My FIRE plans solidified.
Old 12-06-2018, 10:12 PM   #1
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Bear Mkt has begun.My FIRE plans solidified.

I think we have finally begun this inevitable Bear. The S&P 500 peaked Sept 20 at 2930 and is falling. I知 in this OMY or TMY mode right now, but I知 also banking on a 3.5 SWR, and SORR is a concern if i want to maintain a nice/current life in my high COL area of Seattle. I知 only 51. When I punch out I want to do it for good and not have to go back and be a Walmart greeter. Plus, I love living in the great PNW. But, everday is precious; 典he future is uncertain and the end is always near. A handful of close friends have died or are battling cancer.

The Plan: With the average Bear market lasting approx. 18 mo, then I think the bottom of this Bear will be somewhere around March 2020; S&P 500 at 2344 (-20%). Therefore, I should work for the mega corp man until March 2020 and then FIRE. During now and then I do some major DCA, load up on Dividend ETFs for the after tax account, and reap the benefits of the 401K employer match. I値l be 53 and DW 57 by then. I can do it even though my heart wants to FIRE now!
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Old 12-06-2018, 10:26 PM   #2
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I think we have finally begun this inevitable Bear. The S&P 500 peaked Sept 20 at 2930 and is falling. I知 in this OMY or TMY mode right now, but I知 also banking on a 3.5 SWR, and SORR is a concern if i want to maintain a nice/current life in my high COL area of Seattle. I知 only 51. When I punch out I want to do it for good and not have to go back and be a Walmart greeter. Plus, I love living in the great PNW. But, everday is precious; 典he future is uncertain and the end is always near. A handful of close friends have died or are battling cancer.

The Plan: With the average Bear market lasting approx. 18 mo, then I think the bottom of this Bear will be somewhere around March 2020; S&P 500 at 2344 (-20%). Therefore, I should work for the mega corp man until March 2020 and then FIRE. During now and then I do some major DCA, load up on Dividend ETFs for the after tax account, and reap the benefits of the 401K employer match. I値l be 53 and DW 57 by then. I can do it even though my heart wants to FIRE now!
What if the bear doesn't really start for 2 more years? Can you just work 2 more after that? Get your numbers right whether the markets cooperate or not. The market never does what you think it will do it seems. Good luck in your quest for FIRE.

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Old 12-06-2018, 10:48 PM   #3
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If this is truly the start of a bear, then it will serve to perhaps break some of the irrational exuberance that some folks may have based on the past 10 years of performance. The market will do what the market feels like doing. Sitting on enough cash and income that the accounts can sit there and get dusty, if that is what it takes.


I think it is a bit early to put dates on when the low will be in, but it does not hurt to do some planning, and consider the 'what ifs' associated with market volatility, and the ups and downs.
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Old 12-06-2018, 10:58 PM   #4
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The Plan: With the average Bear market lasting approx. 18 mo, then I think the bottom of this Bear will be somewhere around March 2020; S&P 500 at 2344 (-20%). Therefore, I should work for the mega corp man until March 2020 and then FIRE. During now and then I do some major DCA, load up on Dividend ETFs for the after tax account, and reap the benefits of the 401K employer match. I’ll be 53 and DW 57 by then. I can do it even though my heart wants to FIRE now!
That’s not going to be the timing. Every bear market is different. No one knows when it will start or how long it will last. It will confound everybody, including you.

You certainly don’t know if one has started yet.
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Old 12-06-2018, 11:13 PM   #5
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Bears around here are going to sleep for a few months. I'd be like a bear.
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Old 12-06-2018, 11:26 PM   #6
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Of course you can't predict. I'm just going from averages. I run firecalc a lot and play with 'what if' scenarios. But SORR is a real concern. The longest running Bull has to end sometime. Retiring at the beginning of a Bear could cause pain since I need to 72T due to my limited amount of after tax $. I know firecalc accounts for this, but I still stress over it. I think everyone that is "close" to FIRE has to wrestle with the OMY decision and whether I'm close enough. That's where I'm at. I just hope this Bear kicks in while still working and then I'm golden. Of course, if the Bull kicks in and rages OMY, then that would be good too ...and it might be a wash. Its a major decision as to when to FIRE as you all know. Too many unknowns with HC and SS.
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Old 12-06-2018, 11:28 PM   #7
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Some food for thought - If your investments just keep up with inflation your 30 year SWR is 3.33% (100 / 30 years). Ten year TIPS are yielding inflation + 1.06%, with the relative safety of Treasury bonds.
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Old 12-07-2018, 01:23 AM   #8
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Of course you can't predict. I'm just going from averages. I run firecalc a lot and play with 'what if' scenarios. But SORR is a real concern. The longest running Bull has to end sometime. Retiring at the beginning of a Bear could cause pain since I need to 72T due to my limited amount of after tax $. I know firecalc accounts for this, but I still stress over it. I think everyone that is "close" to FIRE has to wrestle with the OMY decision and whether I'm close enough. That's where I'm at. I just hope this Bear kicks in while still working and then I'm golden. Of course, if the Bull kicks in and rages OMY, then that would be good too ...and it might be a wash. Its a major decision as to when to FIRE as you all know. Too many unknowns with HC and SS.
Part of retirement planning is planning for SORR, but trying to time your retirement date as a way of eliminating SORR is not a plan, it's a guess. There are other ways of dealing with SORR.

For example, temporarily putting aside enough cash to cover your first few years if necessary might be another approach. Then, after you have been retired for a while and SORR is no longer as big a concern, you can invest whatever you did not need for living expenses during those first few years.
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Old 12-07-2018, 03:33 AM   #9
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You'll work until you're 53 and then the market will present you with something new to think about. If a bear happens, will it have ended? OMY. If we are still in a bull, when will the bear cometh? OMY. If it is still suffering from ADD, OMY. You won't know anything more about the market 2 years from now than you already know now.

What you will have done is mitigate SORR by having 2 fewer years to fund and have more money saved. Therein lies the decision. Don't base it on what the markets are doing or might do. Base it on do I have enough.

I have a spreadsheet that I can simulate everything from armageddon to rosy. If I work long enough to mitigate armageddon, I may be able to retire in 8 years. If I am rosy, I could retire today. The answer lies somewhere in between.
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Old 12-07-2018, 04:14 AM   #10
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........典he future is uncertain and the end is always near. ..........
Not a bad plan. Not a bad plan at all!
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Old 12-07-2018, 05:32 AM   #11
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OP.....Never mind about the bear market.


Could you look into your crystal ball and tell me if the Rams will cover the spread versus the "Bears" this Sunday?


Right now that is the only "bear" I care about!


I can't bear to talk about this anymore.
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Old 12-07-2018, 06:12 AM   #12
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I think we have finally begun this inevitable Bear. The S&P 500 peaked Sept 20 at 2930 and is falling. I知 in this OMY or TMY mode right now, but I知 also banking on a 3.5 SWR, and SORR is a concern if i want to maintain a nice/current life in my high COL area of Seattle. I知 only 51. When I punch out I want to do it for good and not have to go back and be a Walmart greeter. Plus, I love living in the great PNW. But, everday is precious; 典he future is uncertain and the end is always near. A handful of close friends have died or are battling cancer.

The Plan: With the average Bear market lasting approx. 18 mo, then I think the bottom of this Bear will be somewhere around March 2020; S&P 500 at 2344 (-20%). Therefore, I should work for the mega corp man until March 2020 and then FIRE. During now and then I do some major DCA, load up on Dividend ETFs for the after tax account, and reap the benefits of the 401K employer match. I値l be 53 and DW 57 by then. I can do it even though my heart wants to FIRE now!
Never mind the dates. Maybe you should use the next two years (or however long it takes for you to feel comfortable) to restructure your savings so you don't have to rely on a 72 (t). Ramping up your after tax accounts makes sense, but why dividend payers if you are going to spend principal anyway?

What else is going on in the Jester financial picture? Paid off house? That helps a lot. No income taxes in Washington to plan for, that's very helpful on the expense side. Have you tracked your spending to see if you have a good handle on what you will spend after retirement? Are there places to cut so you can save more? Is Mrs. Jester working? Does she have separate savings? What about Social Security? Have you planned out who takes it when?

Sorting all of this out is more important right now than when the bear market starts or how long it lasts. No one knows that. Being prepared for the inevitable down market and planning for retirement in spite of it is what counts.
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Old 12-07-2018, 06:18 AM   #13
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Part of retirement planning is planning for SORR, but trying to time your retirement date as a way of eliminating SORR is not a plan, it's a guess. There are other ways of dealing with SORR.

For example, temporarily putting aside enough cash to cover your first few years if necessary might be another approach. Then, after you have been retired for a while and SORR is no longer as big a concern, you can invest whatever you did not need for living expenses during those first few years.
+1

1. Set your date
2. Select an allocation that you are comfortable with
3. Have 3 to 5 years of cash on the side to cover your fixed expenses.

Or as Ron Popeill used to say, "set it and forget it."

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Old 12-07-2018, 06:24 AM   #14
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"I woke up this morning and I got myself a beer."



Not a bad plan. Not a bad plan at all!
It's close enough to 5PM Friday in Moscow.
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Old 12-07-2018, 06:33 AM   #15
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OP.....Never mind about the bear market.


Could you look into your crystal ball and tell me if the Rams will cover the spread versus the "Bears" this Sunday?


Right now that is the only "bear" I care about!


I can't bear to talk about this anymore.
Da Bears!
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Old 12-07-2018, 06:43 AM   #16
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What is SORR?

If we are in a Bear dip, keep working and save, save, save.
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What the heck is going on ???
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Old 12-07-2018, 06:55 AM   #17
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What is SORR?

If we are in a Bear dip, keep working and save, save, save.
I believe OP was referring to Sequence Of Returns Risk. The same thing that's giving me heartburn at the moment, doing ER early Jan at 55 yo. Fortunately, we have enough after tax saved to weather a bear market without having to sell equities, but it's psychologically difficult to watch your paper net worth get hammered day in, day out right when you're getting ready to or have recently turned off the W-2 income streams..

I did feel a WHOLE lot better about things at Dow 26.7K than I do at Dow 24.5K..I know stocks will go up and stocks will go down. In principal, that's all just fine and ducky. But none of us want that to happen RIGHT AS we are ER'ing..
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Old 12-07-2018, 07:31 AM   #18
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I retired in spring of 2016. The markets at that time were sketchy and people would say I wouldn't retire the markets are going to crash. I still retired then and from about the time I retired the market started to go up from 16000 to above 26000 since the day I retired. Who would of known that would be the case. Trying to out guess what is going to happen equals failure and won't turn out how you wanted it to be any way.
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Old 12-07-2018, 07:37 AM   #19
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Two thirds of economists think we will be in a recession by the end of 2020, according to comments just made by a CNBC analyst.


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Old 12-07-2018, 07:39 AM   #20
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Two thirds of economists think we will be in a recession by the end of 2020, according to comments just made by a CNBC analyst.
Are they the same economists who predicted the last twelve of our three recessions?
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