Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-06-2017, 03:22 PM   #21
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
Quote:
Originally Posted by JoeWras View Post

I try to picture myself 4 years from now in the middle of a 2008-9 downturn, and wonder what my discipline would be.
If it happens, call me I'll try to talk you off the ledge. I know my good fortune might turn at any moment. I have been looking at the 2008-2009 posts. Some guys in here provided good counsel to those that were wringing their hands.
__________________

__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-06-2017, 03:27 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 6,414
Send a message via Skype™ to kcowan
We retired in 2002 so we had the "benefit" of the dot com swoon to factor into our plans. I think it was 2008 that any residual free went away. Also in 2008, we discovered how much we could save by living in Mexico if necessary.
__________________

__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 08-06-2017, 03:49 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 6,090
Quote:
Originally Posted by rodi View Post
This is something I've been thinking about for a while... How far into retirement (in years) do you have to get before you can relax about sequence of returns risk. (SoRR)

5 years? 10 years? Worry forever?

I'm 3 years in - and have kept my withdrawals fairly low (<3%) just as a safety measure because of my worry about SoRR... I'm wondering if I can expand my spending a bit after some arbitrary number of years because I've passed the portfolio risk of early bad markets on my retirement....
My approach has been to run VPW and keep my particular results for reference. So when someone starts mentioning this stuff I can go back and review why I shouldn't worry too much and enjoy the spending.

What would you do now with another half percent spending per year? If the answer really excites you, then you have only to do the homework to see how that spending level would have done in past awful market periods (like start years 1966 or 1929).
Lsbcal is offline   Reply With Quote
Old 08-06-2017, 06:07 PM   #24
Recycles dryer sheets
 
Join Date: Dec 2016
Posts: 118
Quote:
Originally Posted by W2R View Post
I don't have an exact number of years either. This article on Kiplinger says,
Other articles say anything from a couple of years to a decade.

.
Good grief...that article is written by an insurance salesman...so many classic fear tactics employed in that article...everyone's situation is different , but be very careful of articles like that "You might run out of money...and gee I have just the insurance product for you"...
FREE866 is offline   Reply With Quote
Old 08-06-2017, 07:11 PM   #25
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 1,483
Don't you love how an insurance salesman has a company with wealth management in the name? Yep, he's managing wealth - his wealth.
Another Reader is offline   Reply With Quote
Old 08-07-2017, 11:22 AM   #26
Full time employment: Posting here.
 
Join Date: Jan 2014
Location: Austin
Posts: 510
Quote:
Originally Posted by rodi View Post
This is something I've been thinking about for a while... How far into retirement (in years) do you have to get before you can relax about sequence of returns risk. (SoRR)

5 years? 10 years? Worry forever?

I'm 3 years in - and have kept my withdrawals fairly low (<3%) just as a safety measure because of my worry about SoRR... I'm wondering if I can expand my spending a bit after some arbitrary number of years because I've passed the portfolio risk of early bad markets on my retirement....
I retired the same time as you at about the same age as you and I've been wondering the same thing.

This year my WR is working out to about 2.3% while my portfolio continues to rise substantially. If I include SS at 62, Firecalc indicates I could spend three times as much or more at 100% success.

But I don't because of exactly what you asked about (SRR). My worry has lessened over the last three years, and articles like this that I read this morning encourage me:

Why the bull market can go on for years

Ultimately, though, I don't think I'll start to be less concerned about SRR until I'm within spitting distance of SS benefits because I consider those my safety lever in the event of market crash.
__________________
ER'd 6/1/2014 @ age 53. AA=70/30, WR=3%
Looking4Ward is offline   Reply With Quote
Old 08-07-2017, 11:36 AM   #27
Recycles dryer sheets
googily's Avatar
 
Join Date: Jul 2013
Posts: 399
For those retiring with a number of years before 59.5, do you look at your subset of asset allocations as distinct entities? For instance, the after-tax and inherited IRA monies I have technically only have to "last" until I get access to my 401k and IRA, followed by a meager pension and SS. So those "current" pools are more conservatively invested, while keeping my 401k at 80-20 since there's eight-plus years before I get to it. But my overall AA is about 65-35.

It's kind of like approaching it as planning to retire twice.
googily is offline   Reply With Quote
Old 08-07-2017, 11:38 AM   #28
Full time employment: Posting here.
 
Join Date: Jan 2014
Location: Austin
Posts: 510
Quote:
Originally Posted by googily View Post
For those retiring with a number of years before 59.5, do you look at your subset of asset allocations as distinct entities? For instance, the after-tax and inherited IRA monies I have technically only have to "last" until I get access to my 401k and IRA, followed by a meager pension and SS. So those "current" pools are more conservatively invested, while keeping my 401k at 80-20 since there's eight-plus years before I get to it. But my overall AA is about 65-35.

It's kind of like approaching it as planning to retire twice.
Yes, I do. Roughly 60% of my portfolio is after tax while 40% is tIRA. I consider the after tax to be my first bucket while the tIRA can continue to grow for another decade or more.
__________________
ER'd 6/1/2014 @ age 53. AA=70/30, WR=3%
Looking4Ward is offline   Reply With Quote
Old 08-07-2017, 11:47 AM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 6,235
Quote:
Originally Posted by googily View Post
For those retiring with a number of years before 59.5, do you look at your subset of asset allocations as distinct entities? For instance, the after-tax and inherited IRA monies I have technically only have to "last" until I get access to my 401k and IRA, followed by a meager pension and SS. So those "current" pools are more conservatively invested, while keeping my 401k at 80-20 since there's eight-plus years before I get to it. But my overall AA is about 65-35.

It's kind of like approaching it as planning to retire twice.
I don't, but the bulk of my assets are in after tax so I'm not worried about making it to 59.5, 62, 65, or 70. I don't know that I'd do anything different otherwise. Even if you have more aggressive investments in taxable and have to sell them for living expenses, you can buy back the aggressive investments in your IRA or tIRA--but make certain you don't run afoul of wash sales, because you'll lose the tax loss, not just defer it.
RunningBum is online now   Reply With Quote
Old 08-07-2017, 11:47 AM   #30
Recycles dryer sheets
googily's Avatar
 
Join Date: Jul 2013
Posts: 399
Quote:
Originally Posted by Looking4Ward View Post
Yes, I do. Roughly 60% of my portfolio is after tax while 40% is tIRA. I consider the after tax to be my first bucket while the tIRA can continue to grow for another decade or more.
My %s are similar. This would then seem to have some amount of SORR mitigation, or at least a "reset" button, if your true retirement monies are considered enough on their own if you were waiting until retirement age to stop working. Because then the spend horizon is much shorter for that money, plus the arrival of pensions and SS in just a few years after that reset point).
googily is offline   Reply With Quote
Old 08-07-2017, 11:58 AM   #31
Full time employment: Posting here.
 
Join Date: Jan 2014
Location: Austin
Posts: 510
Quote:
Originally Posted by googily View Post
My %s are similar. This would then seem to have some amount of SORR mitigation, or at least a "reset" button, if your true retirement monies are considered enough on their own if you were waiting until retirement age to stop working. Because then the spend horizon is much shorter for that money, plus the arrival of pensions and SS in just a few years after that reset point).
True. I'll often run Firecalc scenarios where all I include is my after-tax assets for 13-14 years until age 70. Then I'll run the same period using my tax advantaged with no withdrawals to see what it could possibly grow to. Many more cycles can be included for analysis when only looking at 13-14 year periods. My thought process is if I can survive any SORR with after-tax until I can max out SS and growth of after-tax then I'll have plenty of goofy money when I turn 70 and won't care about SORR
__________________
ER'd 6/1/2014 @ age 53. AA=70/30, WR=3%
Looking4Ward is offline   Reply With Quote
Old 08-07-2017, 12:23 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 6,235
Another reason I don't treat the types of accounts distinctly is that I think it can skew the "when to take SS" decision. I think some people feel like they have to skimp a bit before taking SS, so they want to take it at 62 so they can splurge a bit more. But I factor in that SS will be coming, and I can spend more out of my accounts more, since I'll have to take less out of them later. I don't want to take this down the "SS at 62 or 70" rabbit hole because I know there are very valid reasons for either and everything in between, but I don't think that being able to spend more once you get it is one of them.
RunningBum is online now   Reply With Quote
Old 08-07-2017, 12:44 PM   #33
Recycles dryer sheets
googily's Avatar
 
Join Date: Jul 2013
Posts: 399
Quote:
Originally Posted by RunningBum View Post
Another reason I don't treat the types of accounts distinctly is that I think it can skew the "when to take SS" decision. I think some people feel like they have to skimp a bit before taking SS, so they want to take it at 62 so they can splurge a bit more. But I factor in that SS will be coming, and I can spend more out of my accounts more, since I'll have to take less out of them later. I don't want to take this down the "SS at 62 or 70" rabbit hole because I know there are very valid reasons for either and everything in between, but I don't think that being able to spend more once you get it is one of them.
I think that's true if the pre-retirement monies are a bit tight or, conversely, if the after-retirement pool is small and it's the current pool that has to do the heavy lifting the whole way. Both of those are where SORR is understandably concerning. That is where a bad market right as you pull the rip cord can muck with one's plans, make someone need to take SS at 62, etc.

But, in my case, as I said above, I really do look at it like two retirements. If all of my pre tax money went up in a puff of smoke over the next eight years, could my 401k, tIRA, pension, and SS get me from 59.5 to whenever?
googily is offline   Reply With Quote
Old 08-07-2017, 05:01 PM   #34
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 4,391
Quote:
Originally Posted by googily View Post
For those retiring with a number of years before 59.5, do you look at your subset of asset allocations as distinct entities? For instance, the after-tax and inherited IRA monies I have technically only have to "last" until I get access to my 401k and IRA, followed by a meager pension and SS. So those "current" pools are more conservatively invested, while keeping my 401k at 80-20 since there's eight-plus years before I get to it. But my overall AA is about 65-35.
That is what I did. The overall AA was is calculated with everything, of course, but the bucket I was planning to spend out of was constrained to be something that wasn't as volatile. I didn't calculate separate AA's, though, for the different tax categories...I was under the impression that the overall AA was the only thing that mattered. So of course if the spending bucket was constrained to have, say, no equities, then of course the non-spending buckets had more equities. Sometimes the account fiduciary will calculate your asset allocation. That might appear out of whack, but I just ignore it because it's only a subset.
sengsational is offline   Reply With Quote
Old 08-07-2017, 05:25 PM   #35
Recycles dryer sheets
 
Join Date: May 2014
Posts: 419
I am not an expert. But I think that depends on how many remaining years you need the money. If someone retires today and knows for sure he will die next year, he would not worry about the sequence of returns risk.
For anyone with no sure finishing date, every year starts a new year, thus starts a new sequence of returns risk, if you worry about that.
Of course, you have fewer years to support. But you do not know exactly how many years remaining.
flyingaway is offline   Reply With Quote
Sequence of Returns Risk
Old 08-07-2017, 05:28 PM   #36
Thinks s/he gets paid by the post
GravitySucks's Avatar
 
Join Date: Feb 2014
Location: Syracuse
Posts: 1,495
Sequence of Returns Risk

Quote:
Originally Posted by NW-Bound View Post
Yes.







Is your example a bit too extreme? Most 80-year-olds I know worry more about their health problems than SORR.


By the time we can stop worrying about SORR, we'll wish we still did.
__________________

__________________
“No, not rich. I am a poor man with money, which is not the same thing"
GravitySucks is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Sequence of returns risk & fear of retiring into a bear market jjonas FIRE and Money 122 05-22-2017 07:58 PM
Freaking Out over Sequence of Returns Risk mbnj77 FIRE and Money 76 05-01-2017 04:41 PM
Born lucky? Sequence of returns risk Focus FIRE and Money 40 08-16-2014 11:26 PM

» Quick Links

 
All times are GMT -6. The time now is 04:08 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.