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Old 01-21-2008, 04:16 PM   #21
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If one were planning on retiring this year, and are going to live off savings, then I would also assume that they would have a plan to keep X years of expense dollars in cash or MM. To the extent that the down market will effect the conversion of savings to MM it seems likely it would effect retirement.

However, It would also seem reasonable that the conversion of 1 year rather than say a preferred 3 to 5 years, or even month at a time conversion, would allow one to continue their plans. If their retirement is so contingent on the market that even this won't work, then seems like they really should not be retiring this year even if the market recovers completely.
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Old 01-21-2008, 04:26 PM   #22
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Rich: You described to a Tee, the look on my wife's face when I told her last month that I was going to give up my traveling tournament golf schedule.

In any case, we'll be sure and save you a place at the fly-stream, golf course, etc. etc. when you're ready.


In fact, I had date with Big Bertha this weekend. Watch out...
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Old 01-21-2008, 05:09 PM   #23
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I have received my share of gentle, friendly teasing on the board about my almost "doomsday" retirement planning scenario, but this approach helps me to sleep at night.
Don't forget to tease back at them W2R.

You'll have ample opportunity to say, "I told you so" before you finally hang it up. It's you duty to point out your prudence to any of the Pollyannas who have taken you to task here.
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Old 01-21-2008, 05:19 PM   #24
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Don't forget to tease back at them W2R.

You'll have ample opportunity to say, "I told you so" before you finally hang it up. It's you duty to point out your prudence to any of the Pollyannas who have taken you to task here.
Well, only if my pessimistic planning actually works! Life has a way of throwing unexpected monkey wrenches in the way. We shall see.
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Old 01-21-2008, 07:49 PM   #25
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Hi everybody ...... long time, etc.

I may be having a senior moment, but I think the problem with retiring
"in a bear market" assumes that you are fully invested in your stock
allocation at the time you retire. In my case, most of my net worth at the time I retired was obtained from a cashed out pension.

IMHO, this is an ideal time for a retiree with a wad of cash to start DCA
into his/her desired AA. I would not plunge as the knife is still falling,
but I would get fully invested over the next 18 months.

BTW, for what it's worth, I have started buying selected REIT stocks
after being luck enough to cash out of REITs in January of 2007.
As Brew suggested, I am also taking a hard look at KRE, the regional banking ETF. It looks like the baby thrown out with the bath water to me.

Cheers,

Charlie
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Old 01-21-2008, 07:57 PM   #26
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Hey Charlie. Good to see you posting again.
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Old 01-21-2008, 08:07 PM   #27
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Charlie!

You're the one we lost that I've missed most of all.

A real veteran investor...keep posting!
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Old 01-21-2008, 08:51 PM   #28
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... If their retirement is so contingent on the market that even this won't work, then seems like they really should not be retiring this year even if the market recovers completely.
BINGO.
IMO if your plan is so tight that there is no wiggle room, then in a down market you will panic and potentially do something devastating (like DMT and miss on one end or the other).
Your plan should, as most advocate here, but it seem either don't implement or have forgotten it, is in the plan (or mayber you're just wanting to wring your hands over ? ), be able to handle a down market. Remember when you do FIRECALC it takes into consideration down market periods. It seems that the people who are comfortable (or as much as they can be with potentially 6 figure losses) are the ones who have a 'bucket' for the 1st x number of years expenses. I have that in place and am ok with my, now 6 month old, retirement.
If I was not retired yet, I would have no problem with pulling the rip cord, given my plan. I have enough wiggle room and contingent plans so that I can sleep at night.
btw, this forum allows one to think, vent, ...etc. and that helps too.
Thanks everyone!
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Old 01-21-2008, 09:03 PM   #29
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Hey Charlie. Good to see you posting again.
Ditto.

heh heh heh -
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Old 01-21-2008, 10:25 PM   #30
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No but just today I told DW that can't have a new car because I need the cash to invest while the market is down.

She has a 12 year old mini-van with 170k miles and a big dent in the side. Should last another couple of years and if it breaks down in the middle of the free-way, well that's what cell phones are for. Right

MB
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Old 01-21-2008, 11:10 PM   #31
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I'll chime in and say I'm still moving forward with my plan to retire this spring. I've lost some $ in the last few weeks, but bucket #1 is still as full as it needs to be.

As a matter of fact, I drafted the retirement memo this afternoon to deliver to my boss at the end of next week. Just waiting for some details for HR, but as far as I'm concerned I will w*ork no more!

Rita
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D*mn the torpedoes and full speed ahead!
Old 01-22-2008, 01:19 AM   #32
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D*mn the torpedoes and full speed ahead!

I retired January 1st, DH is due to pull the plug at the end of Feb.2008. We never even though about not retiring. (well...maybe only a teensy bit) Like others have said, if you feel you have to put off RE because of a market downturn, then you REALLY should put off RE.
Now how do I explain it to the in-laws? Because of the current financial mess, they are sure the end of civilization is near and will flip out when they hear that both of us are stopping w*rk...
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Old 01-22-2008, 01:32 AM   #33
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None of my nest egg is in the stock market...
so even though the DOW futures are down almost 600 as I type...
I will be sleeping late tomorrow.
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Old 01-22-2008, 08:17 AM   #34
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I'll chime in and say I'm still moving forward with my plan to retire this spring. I've lost some $ in the last few weeks, but bucket #1 is still as full as it needs to be.

As a matter of fact, I drafted the retirement memo this afternoon to deliver to my boss at the end of next week. Just waiting for some details for HR, but as far as I'm concerned I will w*ork no more!

Rita
Gotadimple,

Congratulations on your ER. I'll bet you can hardly wait. It's a good thing you have a bucket #1 and are not fully invested. Without diversification your plans may have been derailed. Your foresight will now enable you to enjoy life to the fullest and without worry.
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Old 01-22-2008, 10:43 AM   #35
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The key to all of surviving down markets for me is finding a asset allocation that I can live with and not freak out when the inevitable down market hits. I'm about 30-35% in equities and don't vary this much even in up markets. Yeah, sure I give up gains while the market is rising but at the same time I'm not suicidal when the market is tanking like it is now. And don't get me wrong, I also get down when the market is tanking and ask myself "why didn't I lighten up on equities?". I'm amazed that people here can ER with 90-100% of their assents in the market...I don't have the guts to do that....yeah, no guts, no glory. But the only way I could do that is if I knew that even if I lost half of my investments I could still comfortably live on whats left. If I lost 50% of what I currently have, ER for me would be out of the question. So for me it comes down to whether I can live with a lower return but guarantee myself ER.
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Old 01-22-2008, 11:03 AM   #36
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The key to all of surviving down markets for me is finding a asset allocation that I can live with and not freak out when the inevitable down market hits. I'm about 30-35% in equities and don't vary this much even in up markets. Yeah, sure I give up gains while the market is rising but at the same time I'm not suicidal when the market is tanking like it is now. And don't get me wrong, I also get down when the market is tanking and ask myself "why didn't I lighten up on equities?". I'm amazed that people here can ER with 90-100% of their assents in the market...I don't have the guts to do that....yeah, no guts, no glory. But the only way I could do that is if I knew that even if I lost half of my investments I could still comfortably live on whats left. If I lost 50% of what I currently have, ER for me would be out of the question. So for me it comes down to whether I can live with a lower return but guarantee myself ER.
The Dow is down only 120 points today so far. No problems! It's just another day.

I agree with your philosophy, and I plan to ER with no more than 45% equities, maybe less.
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Old 01-22-2008, 11:06 AM   #37
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I'll add my 2 cents.

My DW is still on for her retirement the end of this month. I have a few contract jobs that I have to finish (ends in June) and then I'll be all out as well.

FireCalc says I have 100% success rate and that includes going through the depression so I see no reason to hold off retirement. I don't think it will get worse than the "big one". I also have run my plan on the fidelity retirement planner (more conservative than FireCalc) and with a few tweeks it also says 100%.

I have a 10 year CD "bucket" so once I've finished DCAing into the market I plan on looking at my AA once a year.

Bogle was on CNBC today and he said who cares what the market is doing TODAY. The market is always on an uptrend - it just depends on your viewing scale.
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Old 01-22-2008, 11:23 AM   #38
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About the only concrete reason someone well-prepared might postpone retirement until after a recession has resolved that I can think of is if you are cutting it close with your SWR.

Retire mid-recession at 4% SWR (or whatever your SWR) of $800k gives you $32k a year to live on. Or wait a year or two, contribute a little more, and retire on 4% of a recovered nest egg of $1mm, or $40K and change per year, for a 25% "raise."

Of course, you have to find your current situation tolerable. Or, you might have enough cushion to not care. But that's a situation I would pay attention to given that scenario.

If you've already retired it's quite different.
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Old 01-22-2008, 11:47 AM   #39
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I'm amazed that people here can ER with 90-100% of their assents in the market...I don't have the guts to do that....yeah, no guts, no glory. But the only way I could do that is if I knew that even if I lost half of my investments I could still comfortably live on whats left. If I lost 50% of what I currently have, ER for me would be out of the question. So for me it comes down to whether I can live with a lower return but guarantee myself ER.

I retired with my equity portion at 85% .I have trimmed it down to 75% . If I lost a good chunk as I did in previous downmarkets I could survive .I also have a paid for expensive house that I could downsize . So sure I worry but the media could drive you nuts .
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Old 01-22-2008, 11:48 AM   #40
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As I'm already retired, the question is moot for me, but I always viewed going into retirement as akin to stepping onto a moving escalator. You have to make your plan and then take that big step. If you've done adequate planning/saving and have covered as many contingencies as possible to make you feel comfortable about your decision, you gotta make up your mind and step on the walkway to retirement. Otherwise, you can always find some reason or other to delay the decision..."one more year", "one more bonus", "waiting for the market to rebound," whatever. Bottom line: we should all be planning for a retirement that lasts decades, and during those decades we'll all face up and down markets and other challenges. It's part of life...no regrets...and "woulda, coulda, shoulda" doesn't change it.
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