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Do you have a "Plan B"?
Old 02-12-2009, 11:04 AM   #1
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Do you have a "Plan B"?

My "Plan A", to retire comfortably on the portfolio I was accumulating (and foolishly leveraged) in a few years is a plan I have had to abandon.
My mother and aunt both died young, a few years older than I am now, so I am becoming increasingly conscious of my mortality.
I have to delay retirement. For how long I don't know, one would be a fool to try to predict anything in this global financial upheaval.

So....it is time for Plan B

And here it is: I have taken most of my money out of the market and have purchased my retirement condo. A block away from the ocean, you can see the water at the building's entrance. Premature and foolish? Maybe. But I have my reasons. I hope to live there 6 weeks this summer and various times throughout the year.

My DH and I still live in our home close to our work, but we will be using the second residence as often as possible. It is a two bedroom and my neice rents the one room as it is close to her university. Her rent covers the taxes/heat and modest condo fee.
I have someone to take care of the place when I am not there. I have arranged a self-funded sabbatical in three years time and will have at least one year to savour the FIRE lifestyle. After that I will see about perhaps working less (job share?).

Regretting my previous financial missteps does not do any good. I have paid off my debts and mortgage and I will continue to set aside 50% of my take home pay to buy ETF stocks or low MER mutual funds regularly over the next few years to build back my investment portfolio. Anyone else have a "Plan B"?
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Old 02-12-2009, 11:08 AM   #2
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My plan B is as follows -- instead of planning a full ER at (say) 50 or 55, I may plan a career change doing something I find a bit more enjoyable until (say) age 60 or so.

I can pull the plug on the Megacorp rat race sooner if I'm willing to work longer and for lower pay doing something different and somewhat fulfilling.

And the more I watch my retirement portfolio melt down, the more I'm thinking I may need a plan C...
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Old 02-12-2009, 11:17 AM   #3
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I probably retired from “Plan R” or was it “Plan T”? Never mind, I’m not a detailed planner. Sounds like FITNB and Ziggy are on the right track, finding a way to enjoy the ride.
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Old 02-12-2009, 11:25 AM   #4
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Plan B: win the lottery.
Plan C: find a big bag of money that fell off an armored truck.

Seriously, the only change in my plan is to delay retirement a bit. Meanwhile, I'll keep saving and investing pretty much as before.

I'm not sure I understand why you abandoned your Plan A, cashed in your investments and bought a condo. Won't that just hurt you in the long run? Sorry to hear about the deaths in your family, and I'm starting to be more conscious of my own mortality too, but it sounds like you've decided to delay your retirement just so you can have a 2nd home by the Ocean now. But only you can say if that's worth the trade off.
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Old 02-12-2009, 11:37 AM   #5
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My plan B is getting a part-time job....for a "need" only and not a "want".
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Old 02-12-2009, 11:42 AM   #6
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I *always* have a Plan B, since it is in my nature to overthink these things. Right now I am pretty well set for retirement from a financial standpoint, but you never know what could happen and hence the Plan B.

I do plan to retire in November, come h*ll or high water, as long as HR doesn't tell me I can't for some reason. I am determined.

Plan B, in event of catastrophic economic collapse: retire to an area with a low cost of living, grow vegetables, maybe barter, and live off my fixed income, frugally.

Plan A is pretty much the same thing, except for the bartering and living off fixed income frugally. When push comes to shove, basically I would rather work on the expenditure end of things than work on the income end of things. Instead of working, I'd rather do some major penny pinching.

Right now I need free time more than I need things.
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Old 02-12-2009, 11:45 AM   #7
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Joe-here is the question though.....how long is "the long run". I am realistic. I try to live a healthy lifestyle, hopefully I will live a long life. But what if I don't?
I've moved my investment $ into real estate, an investment that unlike my stock portfolio, I can get use and enjoy. I am still going to remain an active investor, and still want to achieve an early retirement date. I will have to patiently rebuild my portfolio.
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Old 02-12-2009, 11:49 AM   #8
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I'm living my Plan B . My original plan was to retire in my early 50's but my husband's death derailed that plan so I decided I was still going to retire in my 50's just not my early 50's . I retired at 59 and now I'm living plan B . Plan C is to sell my house when the housing market starts to recover and buy a smaller house and invest the profit .
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Old 02-12-2009, 11:50 AM   #9
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I'm already retired so.... Plan B, in event my portfolio drops to a level that my current lifestyle is unaffordable:

Sell all (non monetary) assets. Purchase RV trailer and tow vehicle. Hit the road full time.
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Old 02-12-2009, 11:52 AM   #10
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Points 8 and 9 are very relevant to this discussion... Ziggy, his words are almost the exact same as yours from above. I always thought his investing style was way too conservative (until now of course).

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Old 02-12-2009, 11:52 AM   #11
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I like your plan B, Frugality. Perhaps it is just your plan A in a different order--you've bought the retirement home now instead of later, and are still socking away half your paycheck?

We are already in plan A, which overbudgeted our expenses, so we are enjoying having a little more disposable income than anticipated, although we are not disposing of it.
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Old 02-12-2009, 12:01 PM   #12
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My original plan was to retire at my minimum retirement age of 56ysr 4 months with gov't pension (reduced a bit).

I have the option to work longer, to maybe 60 and retire with a pension, not reduced. Also my national guard pension will start at age 60.
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Old 02-12-2009, 12:05 PM   #13
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Yes, I intend to rebuild my financial assets. What has happened in the past few months has made me focus on investing. I watch the business channels daily now, I never took much notice of the markets/economy before, I had automatic mutual fund purchases every month.
The carnage of the markets and all the money that I've lost has not put me off investing. I will be buying more funds/stocks....Now that there has been a correction I am not fearful of buying over-priced securities. I will be better informed. If I was only thinking about the money I would keep my assets in the market, I know that the markets will recover. Buying the condo is a lifestyle shoice, and because my niece pays rent it is revenue neutral. The rent covers all associated costs.
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Old 02-12-2009, 12:07 PM   #14
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My family also has a history of passing around 60yrs old.

Recently we have had too many friends pass, mostly heart attacks 45-55 yrs old. Sure gets you thinking.

The economy completely changed my plans also.

Right now I'm in all cash situation and I hate my job. I can't fully retire but I can make a change. I want to trade quantity($) for quality of life.

We've poured all that we can into our 401K's just to lose 50% of it like others.

I'm pretty sure I'm going to make a change, question is should I pay for my house when I do move or finance it based on the current economy.

I can't honestly say that I'll get back into the market. I know it will come back but then we'll just lose it again in the next scam the crooks come up with.
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Old 02-12-2009, 12:10 PM   #15
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Of course I have a plan B: Eat only instant noodle and drink just tap water.

If plan B fails, the proceed with plan C: Get a job! ;-)
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Old 02-12-2009, 12:12 PM   #16
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Quote:
Originally Posted by Want2retire View Post
Right now I need free time more than I need things.
That's so true. I wonder how many people out there not knowing it?

Sam
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Old 02-12-2009, 12:13 PM   #17
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Quote:
Originally Posted by Frugalityisthenewblack View Post
I watch the business channels daily now, I never took much notice of the markets/economy before, I had automatic mutual fund purchases every month.
This is a big part of why sentiment is so awful right now. I'm not saying it's a good idea to ignore macroeconomic trends, but I think constant reinforcement of how bad things are, are only making things a lot worse.
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RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 02-12-2009, 12:18 PM   #18
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Quote:
Originally Posted by Want2retire View Post
....

Right now I need free time more than I need things.
Now that I'm retired with lots of free time, I'm appalled and annoyed by all the stuff I have. For example, lots of nice polo shirts that maybe were too faded for work are now perfect for a more casual lifestyle.
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Old 02-12-2009, 12:26 PM   #19
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Plan A: The "everything worked out" plan. Retire before 50 with a portfolio capable of producing enough income to continue living like we are living now (which includes plenty of money for discretionary spending).

Plan B: The "oops, I forgot about healthcare" AKA the "thanks for nothing Mr. Market" plan. Postpone retirement age (assuming it's possible) until we can accumulate a portfolio capable of producing enough income to continue living like we are living now.

Plan C: The "better than nothing" plan. Retire on about 2/3 of Plan A and a paid for home. Retirement income would easily cover the basics plus a bit more. Less discretionary income than Plan A or B, but still enough to enjoy life.

Plan D: The "$@%^$@!" plan. Retire on about 40% of Plan A and a paid for home. This one would require a simpler lifestyle, i.e. cutting some of the basics (smaller home, 1 car instead of 2, etc...), or moving abroad. It could also mean working part-time in the early years to reduce the chances of portfolio failure. In one possible scenario, I envision moving back to Europe and farm the land I own there to reduce expenses and even perhaps make some money on the side and live in a modest, energy efficient dwelling (500-700 sq.ft.) on the premises. This is also the base I use to envision retirement after a costly divorce (hopefully it won't happen).
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Old 02-12-2009, 12:44 PM   #20
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Plan A: I'm FI, but due to golden handcuffs, "maybe I'll work a few more years, as long as I can make the job pay off on my terms."

Plan B: FI is seriously winged, and suddenly the golden handcuffs are encrusted with diamonds: "I'm happy to work, on their terms if necessary, until the markets recover, if not longer."
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