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Investment loss greater than Withdrawals
Old 01-01-2019, 06:20 PM   #1
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Investment loss greater than Withdrawals

Recent retiree, (2016). My first uncomfortable milestone, my investment loss exceeded my living expenses in 2018. First time since retiring that net worth actually went down YoY. 2018 loss was 2.8% of portfolio. I know it is no bigee for those who were retired in 2008-2010 or at the "turn of the century". I assume I have many cohorts on this board who also experienced their first "loss" since retirement. I did rebalance last week but I expect 2019 may be similar to 2018.
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Old 01-01-2019, 06:29 PM   #2
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same here.

2.8% isn't bad.....

with withdrawals I was down like 10%

My investment time horizon hasn't changed so I'm sticking with my AA, which is very heavy equity.
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Old 01-01-2019, 06:31 PM   #3
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Similar for me, but I also have more going into 2019 than I had going into 2017. Looking at the big picture, not one bad year that was inevitable after the run up.
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Old 01-01-2019, 06:34 PM   #4
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Did you run firecalc or other retirement income planner before retiring? Part of the calculation is retiring into a real down market. So this should be expected sometimes. It may not be enjoyable.

2015 and first quarter 2016 were not real pleasant as I recall. We RE in early 2015. I doubt 2.8% will break your plan if you did reasonable planning.

Spend a little less if that makes you feel better. Or buy an extra bottle of wine if that makes you feel better. Look at your AA and see if you still think it is right for you.

2.8% loss in a year should not break your plan
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Old 01-01-2019, 06:36 PM   #5
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It's just one year and it sure could of been worse. It will come around and you will be fine.
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Old 01-01-2019, 06:47 PM   #6
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2.8% loss this year is great!!!

I lost 3.5% from 12/31/17 to 12/31/18, and I thought *that* was pretty good. But 2.8% is amazing.

Last year I accidently only spent 0.58% (oops!). This year I am withdrawing 3.84% which is more than I lost, but I probably won't spend most of it. Then again, who knows.
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Old 01-01-2019, 06:59 PM   #7
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Same here. Retired in mid-2016. We have 6% less than we started 2018 with, but we still have 8% more than we retired with. I am choosing to focus on the +8%.

I expect that 2019 will be a seesaw kind of year with lots of ups and downs, just as the last couple of months have been.
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Old 01-01-2019, 07:06 PM   #8
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I have "lost" or "gained" almost one year of living expenses in a day. Crazy stuff! I told my wife that's a before-tax income well in the 6-figure. Unbelievable. And it is not just this year, but has happened before after the 9/11 attack and the more recent Great Recession.

But that's the way it is. I am used to it now.
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Old 01-01-2019, 07:06 PM   #9
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Retired in Aug 2017. You have company.
2018 Portfolio investment loss of 4.8% and total portfolio loss of 7.2%.
Overall net worth since retirement is down 4.7%.

While not pleased with it, I am not panicking at all. Sticking to my AA and all 5 calculators that I use still show 100% success.
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Old 01-01-2019, 07:12 PM   #10
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This is why I like to look at my 3 year average (6.5%) rather than YoY (-4.8%). It is also more in line with my 15 year of 6.9%.

Just as you can't judge your performance by one month, I feel it gives a better picture than a Jan-Dec snapshot.
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Old 01-01-2019, 07:13 PM   #11
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Originally Posted by Dtail View Post
Retired in Aug 2017. You have company.
2018 Portfolio investment loss of 4.8% and total portfolio loss of 7.2%.
Overall net worth since retirement is down 4.7%.

While not pleased with it, I am not panicking at all. Sticking to my AA and all 5 calculators that I use still show 100% success.
May I ask your time frame?
I'm 52. So I do one till age 70 ( hopefully i can start taking ss at that age)
then I do another for 25 years under assumption I live till 95.
and which calculators do you use?
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Old 01-01-2019, 07:18 PM   #12
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May I ask your time frame?
I'm 52. So I do one till age 70 ( hopefully i can start taking ss at that age)
then I do another for 25 years under assumption I live till 95.
and which calculators do you use?
I am 58, DGF is 57. I project out to end of life at 92 y.o. for both of us.
The calculators are:
Firecalc - of course
Fidelity - think it is called RPG now (old RIP). Monte Carlo simulation
Flexible Retirement Planner - (FRP)
Market Watch - easy to use, but does have some detailed input
The last one I am not allowed to mention here, so hopefully you can guess on that one. lol
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Old 01-01-2019, 07:25 PM   #13
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I am 58, DGF is 57. I project out to end of life at 92 y.o. for both of us.
The calculators are:
Firecalc - of course
Fidelity - think it is called RPG now (old RIP). Monte Carlo simulation
Flexible Retirement Planner - (FRP)
Market Watch - easy to use, but does have some detailed input
The last one I am not allowed to mention here, so hopefully you can guess on that one. lol
Thx!
I always feel like Firecalc is overly optimistic
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Old 01-01-2019, 07:29 PM   #14
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same here.

2.8% isn't bad.....

with withdrawals I was down like 10%

My investment time horizon hasn't changed so I'm sticking with my AA, which is very heavy equity.
2.8% was just the investment loss. With Withdrawals we were down a little over 6%
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Old 01-01-2019, 07:49 PM   #15
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I retired in Jan.2008 and proceeded to lose almost 30% . This is a tiny blip on the radar .If this makes you uneasy rethink your investment risk .The good news is I got all my money back and a lot more by staying in the market .
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Old 01-01-2019, 07:52 PM   #16
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That's not too bad... even a one year period is too short to get concerned about...I think that 3 years is more relevant and 5 years even better.
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Old 01-01-2019, 07:53 PM   #17
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My net worth dropped a whole -.81% last year, including withdrawals. Gains in real estate and alternate investment almost made up for stock losses.
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Old 01-02-2019, 06:28 AM   #18
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Thx!
I always feel like Firecalc is overly optimistic
Fidelity's planner typically provides the most conservative results and IMHO it provides Monte Carlo type calculations which are nice to use in conjunction with the historical sequencing calculators out there.
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Old 01-02-2019, 06:54 AM   #19
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Fidelity's planner typically provides the most conservative results and IMHO it provides Monte Carlo type calculations which are nice to use in conjunction with the historical sequencing calculators out there.
can you please provide a link to that?
thx
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Old 01-02-2019, 06:55 AM   #20
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This happens sometimes. Volatility from market gains/losses often dominates portfolio performance and withdrawals have a secondary effect.

Happened to me after 2015 too. Jan 2019 is like a repeat of Jan 2016 with a lower portfolio after withdrawals compared to the start of the prior year.
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