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Financial Anxiety
Old 07-27-2015, 01:21 PM   #1
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Financial Anxiety

Getting ready to go PT for a year (turning 60). From most all the models that I have seen we are in good shape on what is now the cresting of a long bull market. I am a numbers guy. I follow the news, read a lot on the markets, etc. I was reviewing my net worth weekly. Now I see that I need to let go of this bad habit. Not to necessarily be ignorant on what's going on around me but at what time to you just make the decision and trust your advisor(s)?

How do many of you deal with the anxiety that goes with leaving a comfortable living to trusting that all will work out? I want to make sure I enjoy ER and not fret.

Really enjoy reading all of the forums.
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Old 07-27-2015, 01:26 PM   #2
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I came to realize that worrying and reading the "news" didn't change anything anyway. And once underway, I was surprised at how little I actually spend in retirement.
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Old 07-27-2015, 01:31 PM   #3
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How do many of you deal with the anxiety that goes with leaving a comfortable living to trusting that all will work out? I want to make sure I enjoy ER and not fret.
I would guess nearly everyone has this anxiety initially, to one degree or another. Easing into retirement (and thus, no earned income) by going PT for a while should certainly help. It definitely has for me. I would think being within 5-10 years of claiming SS should also be reassuring. Those of us still in our 40s don't really have that luxury.
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Old 07-27-2015, 01:32 PM   #4
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... at what time to you just make the decision and trust your advisor(s)?
Since I meet with my advisor daily - usually face-to-face in the mirror immediately after waking each morning - I learned to trust him long ago. After all, he was the one who played a big role in helping me reach FI, so I have to give him credit for that and trust he can continue to successfully care for and nurture my nest egg.

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How do many of you deal with the anxiety that goes with leaving a comfortable living to trusting that all will work out?
In my case the anxiety of making a comfortable living was considerably greater than my confidence level that it would all work out once I retired. After being retired 10 years that confidence level continues to grow.
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Old 07-27-2015, 01:43 PM   #5
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You don't hate your job enough. I think that's what the problem is. When "I hate this crap so much I can't do it another day!" like many/most/nearly all (never did a formal survey) of the people here were experiencing at the end of their rope... I mean careers, everything else looks good and doable by comparison.

I was reasonably young when I jumped. Thirty-eight. Maybe that made it easier because young people by nature are less fearful. On the other hand I had a hell of a lot more years to worry about running out of money than I do now. Probably comes down to the individdle.

Honestly, there was no anxiety. I was glad to be gone and hadn't realized life could be so good since at least the summer before I started 1st Grade.

Unless you are retiring on lean means, and you don't sound like it, cheer up and enjoy the Brave New World.
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Old 07-27-2015, 02:05 PM   #6
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.....at what time to you just make the decision and trust your advisor(s)?

How do many of you deal with the anxiety that goes with leaving a comfortable living to trusting that all will work out? ....
Quote:
Originally Posted by REWahoo View Post
Since I meet with my advisor daily - usually face-to-face in the mirror immediately after waking each morning - I learned to trust him long ago. After all, he was the one who played a big role in helping me reach FI, so I have to give him credit for that and trust he can continue to successfully care for and nurture my nest egg......
+1 I DIY and used 10 or so credible planning tools and they all had a green light to one extent or the other so I took the leap. I also had some redundancy in how much I had and the level of living expenses used so if things went sideways there was some room for error. Beyond that, it is a bit of a leap of faith.... nothing like it though.
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Old 07-27-2015, 06:46 PM   #7
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I am 62 plus one month old and I am too fearful to retire. Perhaps in another year or perhaps if I can find an acceptable bridge job. I fear what will happen when interest rates rise and I fear that we are in a stock market bubble.

I also fear that I could work too long and fail to enjoy my remaining years.

Basically I fear everything.
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Old 07-27-2015, 07:05 PM   #8
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Well I think I'm about to be tested if the market continues to slide. I retired last year and went the 72t route. DH will retire next May and we plan to sell our primary home (still has a mortgage) and live in our smaller home built for retirement (no mortgage). DH will have a modest FERS and SS supplement that will cover basic expenses (which will be reduced once the primary house is sold).
The housing market in the area is strong right now, I just hope it continues. We have two years of current living expenses set aside if needed and should make a bit off the sale of the home if the market stays strong.
I'm worried that the housing market could tank again before we offload the house and worry about tapping my tIRA via 72t in a declining market.
But, I understood the risks and am still happy I retired last year.


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Old 07-27-2015, 07:16 PM   #9
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Originally Posted by Bir48die View Post
Getting ready to go PT for a year (turning 60). From most all the models that I have seen we are in good shape on what is now the cresting of a long bull market. I am a numbers guy. I follow the news, read a lot on the markets, etc. I was reviewing my net worth weekly. Now I see that I need to let go of this bad habit. Not to necessarily be ignorant on what's going on around me but at what time to you just make the decision and trust your advisor(s)?

How do many of you deal with the anxiety that goes with leaving a comfortable living to trusting that all will work out? I want to make sure I enjoy ER and not fret.

Really enjoy reading all of the forums.
Well, my advisors got me to ER at age 52. Considering I got my graduate degree and started working at 26 they took 26 working years to get me to the ER point. During that time sometimes I consulted my left advisor, sometimes the right one, sometimes they agreed, sometimes not but altogether I would have to say that my below the belt advisors worked well. Outside advisors? not so much...
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Old 07-27-2015, 07:44 PM   #10
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How do many of you deal with the anxiety that goes with leaving a comfortable living to trusting that all will work out? I want to make sure I enjoy ER and not fret.
.
I would echo the advice about trusting yourself. I took the time to run through calculators on many sites, then did a spreadsheet, and talked to 2 advisors from fidelity. I'm due to retire Mar 17, but worried lots till I did the above. Finally, I realized I didn't need to worry, but if things do go south, then I'll adapt. Spent most of our lives adapting, why should I think retirement will be any different?

Run the numbers, run them again, then realize that retirement may be as you plan or may not. Just remember you made it to this point, you have shown you can adapt and thrive. Enjoy retirement!!
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Old 07-27-2015, 07:59 PM   #11
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From most all the models that I have seen we are in good shape on what is now the cresting of a long bull market.
I also feel some concern about this. If a nice big bull market brings me just up to my number, I fear the drop back could push me well below my number just as I retire. In the other hand, I don't want to work so long that I miss out on retirement years that might have been.
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Old 07-27-2015, 08:31 PM   #12
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Getting ready to go PT for a year (turning 60). From most all the models that I have seen we are in good shape on what is now the cresting of a long bull market. I am a numbers guy. I follow the news, read a lot on the markets, etc. I was reviewing my net worth weekly. Now I see that I need to let go of this bad habit. Not to necessarily be ignorant on what's going on around me but at what time to you just make the decision and trust your advisor(s)?

How do many of you deal with the anxiety that goes with leaving a comfortable living to trusting that all will work out? I want to make sure I enjoy ER and not fret.

Really enjoy reading all of the forums.
Try to go a week without watching the news, checking the market, etc. When you retire, go a little conservative if you need to for a couple years until you feel more comfortable. Worst case, you tap SS when you are 62.
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Old 07-27-2015, 08:58 PM   #13
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It took me just about a year before I broke myself of logging into my account and checking it's performance every day.

In the last two months I've checked twice. I'm working on checking just once a year.

Hopefully the anxiety you feel will begin to fade as it did for me.
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Old 07-27-2015, 09:13 PM   #14
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We decided to just invest more for capital preservation in retirement, have a low percent of our assets in stocks, and what we do have in stocks is diversified internationally. We know we miss the big gains this way but we miss the big losses, too, so we know we have our expenses well covered. We also eased into things with part-time work.
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Old 07-27-2015, 09:21 PM   #15
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Hi,

I count myself in the bottom 1% of the financially-savvy folks on ER, but in the top 1% of financial worriers. I have worried over our finances for decades while DH slept peacefully and just wanted to enjoy life.

It's been four years since DH retired, and three years for me and so far....it has been awesomely wonderful.

Do we have months when we have to cut back to make it? As a matter of fact, we have. Do we have too much fun every month, $$ short or not? Yes, we do.

Do we miss work? NO. (Admitting, I did take a 2-day/week job this year, with the understanding I can take off for trips whenever we want).

I think worrying is overrated. If you long to retire and your #'s seem pretty certain of working, I vote for retiring.
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Old 07-27-2015, 11:13 PM   #16
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Hi,

I count myself in the bottom 1% of the financially-savvy folks on ER, but in the top 1% of financial worriers. I have worried over our finances for decades while DH slept peacefully and just wanted to enjoy life.

It's been four years since DH retired, and three years for me and so far....it has been awesomely wonderful.

Do we have months when we have to cut back to make it? As a matter of fact, we have. Do we have too much fun every month, $$ short or not? Yes, we do.

Do we miss work? NO. (Admitting, I did take a 2-day/week job this year, with the understanding I can take off for trips whenever we want).

I think worrying is overrated. If you long to retire and your #'s seem pretty certain of working, I vote for retiring.
One nice thing about doing some work, is that you then qualify to put up to the yearly limit for yourself and spouse into a ROTH if you earn enough.
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Old 07-28-2015, 06:05 AM   #17
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So for those that have retired, it sounds like the anxiety decreases with finding out your doing ok with or without adjusting as needed.


For those that haven't yet pulled the plug, are you more confident after running the numbers and watching your nest egg ? or does watching the nest egg cause more concerns ?


On another note, if the numbers say you can afford to retire, try to focus on other changes that will happen.
How will you adapt to not having a schedule?
What do you want to do with the time not spent working?
How do you and your spouse plan to deal with being together 24 hours a day ? (I know, doesn't apply to everyone) What does your spouse plan to do with free time, no schedules?


My point is there will be other changes besides no more paycheck from DA MAN. If you are anxious about this, get confidence then spend some time on the other changes to take your attention away from the $$ even for a while.
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Old 07-28-2015, 08:54 AM   #18
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There will always be concern and uncertainty, as there probably was when you bought your home, if you have one, got married, had children, etc. If you trust your advisors. let THEM worry, you are paying them to make the best choices in all markets.

This is major life decision which may or may not come with sacrifices but you can view your anxiety as a call to action and your new endeavor, to see how happily you can transition into retirement, make it work, and be grateful that your hard work has enabled you to be in this position!
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Old 07-28-2015, 09:28 AM   #19
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Here's what happened to me in the year or two leading up to my ER back in 2007-08.


I had developed a spreadsheet which included my current and projected expenses along with projected income from cashing out my company stock and investing it in a bond fund to generate dividend income to cover those expenses.


I also had in the spreadsheet projections for investment income and expenses going forward from age ~45 to age ~60 which is when I begin having access to my "reinforcements" which included unfettered access to my (Rollover) IRA, my frozen company pension, and SS, the latter 2 a few years after turning 60.


I had been working PT since 2001 but in 2007 had just reduced my weekly hours worked again, to 12 hours per week. This forced me to more carefully track my spending although I was still able to save a little.


In early 2008, I met with a Fidelity Account Executive to run my ER plan by. She entered my income and expenses into Fido's Retirement Income Planner (RIP) program and it confirmed what I had been seeing - if I get to age ~60 intact, the financial picture only gets better. The income line begins zooming upward as the reinforcements arrive while the expenses do not increase nearly as much. based on this, my AE said my ER plan was "good to go" and I could pull the plug on working when I wanted to.


I learned a few things from the RIP program and included them in my own ER spreadsheet such as using different inflation rates for different parts of my budget. I assigned a higher inflation rate to the health insurance premiums, for example.


As 2008 wore on, the remaining pieces of my ER plan fell into place. The financial markets were in free-fall that year, as you probably recall. But I quickly realized that this would become a huge benefit for me because what I would be buying was dropping fast while what I planned to sell (my company stock) was still rising. Still, when I pulled the plug at the end of October, it was still a little scary because it took a few days for the money to arrive, either electronically or via paper check. A week later, I had the check and the rest of the money was in my bank account and I returned to Fidelity to meet with my new AE process all the money, all of which went just as planned.


At the end of November, my first monthly dividend (i.e. my new "paycheck"), albeit a partial month, got posted to my bank account and any remaining anxiety disappeared. At has been smooth sailing ever since.
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Old 07-28-2015, 09:55 AM   #20
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I'm a financial control freak and a worrier.


Starting around age 50 I created a spreadsheet that ran out to age 65 and included some pretty reasonable estimates of inflation, return on investment, and future contributions. This is nothing like the fancy simulations but it gave me a road map, and I could see that a 4% withdrawal rate would leave us with more than we needed in spending money. The financial meltdown, of course, was a huge hit but I also saw it recover and my average return %s were reasonable again.


So, the plan was to retire at 65, when the mortgage would be paid off. Instead, I got sick of the BS a year ago and retired at 61 after thinking about it (and discussing with DH) over a weekend. I told my financial advisor after the fact. He was all for it. Over the last year I've seen what we spend and it's about what I expected. If the market goes bad, we can cut a heck of a lot off the travel budget for a year or two.


It really helped that market performance was good enough that our net worth INCREASED in the year after I retired. Here are some things that help me sleep at night:


1. I'm not collecting SS yet. If I need to tap into it before age 70 it's there, but I hope to defer it. If we have a market meltdown I can tap into SS instead of selling investments at distress-sale prices. Same for a small pension from Prudential: it would be $750/month now, $1,000 if I wait till 65.
2. I keep a decent amount in cash so we don't have to sell in a bad market when we need to make withdrawals (although I'm VERY tempted right now to buy more stock!).
3. I'll keep the withdrawal rate at 3% this year; it would be less but we had a few cost overruns on expenses for the "downsized" house we just bought.
4. Our withdrawal rate is likely to decrease as my SS, my Prudential pension and Medicare kick in over the next few years.


If you're running multiple models and the numbers look good, and if your fixed expenses are reasonable compared to what you think you'll get on your investments, go for it.
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