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Old 01-22-2008, 11:59 AM   #41
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I'm a little shaken but going ahead. I spent 6% last year, which I know is unsustainable, so the downturn focusses me on controlling my expenses this year. I've got 2 years in cash and 3+ years in bonds, so the downturn doesn't have much concrete effect on my finances right now.

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Thanks for the sanity check!
Old 01-22-2008, 03:28 PM   #42
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Thanks for the sanity check!

Originally Posted by charlie View Post
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.
As always the wise ol' seers on this board are making me feel better. Wasn't real comfortable with the market direction since I'm hoping to leave MegaTech in probably May. (Haven't said anything yet, and the date isn't totally firm.)

Comments in this thread remind me that:
1) With the wife's salary/government pension (she thinks she may want to work into 2009) + cash in hand, we're good for probably 4 years.
2) MegaTech stock/stock options (which will undoubtly go down, though this is large cap/growth) should be good for another 4-5 years.
3) Therefore 401K (which is down a good 10% from 2007 highs) won't be touched for ~ 8 years. Doubles?
4) I'll take the cash option on my pension (per charlies' excellent thought) and DCA into a down market! Big win!

Anyway, that's today's plan ...


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Old 01-23-2008, 12:51 AM   #43
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Impact on ER

I have planned on retiring in 2009 at the age of 55. The only income that I will have is the return on my investments and my DW social security (she has a medical disability). So my challenges are health care and making sure I don't exceed a SWR. Which I think is doable. For health care, I'll will use cobra for 18 months and then enter the state's high risk pool with a hefty deductible. My wife has qualified for medicare.

However, if I was planning on retiring tomorrow -- I would delay it for a while. When I do ER next year, I plan do nothing for 6 months and if I need to, pick up a part-time job (2 days a week) that would bring in ~25K and maybe help with health benefits. I don't have a crystal ball, but I'm extremely concerned about the economy for the reasons others have mentioned.

We downsized this last year -- selling the house and moving to a lower priced condo. We have no debt and have budgeted $50K a year for living expenses once I do call it quits. Fortunately, I really like my job, so if I have to work a few additional years it wouldn't be all that terrible.

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Old 01-23-2008, 03:29 AM   #44
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My plans are to ER in 3.95 years. I would just as soon go through the bottom of the biz cycle now. It will hopefully be on an upswing or at least on the mend when I ER.

I am not sure about a recession (though it is looking likely). But it is looking like we may be headed for a bear market. I think a bear market is approximately 20% drop during so many months (6 or longer). The S&P 500 peaked at 1565 on Oct 9, 2007. It closed at 1310 on Jan 22, 2008. 1310 is a 255 point drop over 3 months. It is about 15% drop from the peak. To look at it another way, from 1310 the S&P 500 will have to gain almost 20% to get to its former high. The last time the S&P saw the 1300 level was in Sept 2006. So the 20% gain over the last year and a quarter is gone.

I suspect that could easily see another 5% to 10% drop. Hopefully it will recover quickly. I would hate to see the market go sideways for 5 years.
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Old 01-23-2008, 05:47 AM   #45
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We had planned to retire on March 31st but must push it back because we have options that have to be exercised within 90 days of retirement. They were worth $240K 6 month ago and only 40K now because the stock has dropped from $94 to $60. That's too much money to leave on the table. We should have been exercising them all along but were afraid of the AMT. Oh well, 2 more years at the most.


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