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Old 11-30-2009, 09:47 PM   #41
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...we are currently 11% off the peak.
I suppose it might be pertinent to point out we would be very close to even if we hadn't been living off the portfolio for the 2+ years since reaching the high point.
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Old 11-30-2009, 09:59 PM   #42
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I suppose it might be pertinent to point out we would be very close to even if we hadn't been living off the portfolio for the 2+ years since reaching the high point.
Exactly! We are comparing apples to oranges, and those of us who have not (yet) withdrawn from our portfolios for living expenses are naturally more likely to recover from the recession faster than those withdrawing.

In my case, I also had the advantage of investing during the crash since my financial plan that I put together before the crash had me DCA'ing monthly large sums during 2008. Those here can probably remember my terror as I did it, but apparently it helped.
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Old 11-30-2009, 10:06 PM   #43
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I am still down 13% from Oct 07 high. Some of that was due to withdrawal. I did have to cut some expenses, but it was also because my part-time work (both 1099 consulting and W2 work) dried up. In 2006-2007, the portfolio was going great gun, and we were living right at our means instead of below it, meaning spending all of the income but not adding nor withdrawing from the portfolio, and it was great!

So, how do we change? Well, we are waiting until the smoke clears. If the market keeps improving and my part-time work continues, then we may go back to our "live at the means" mode. At this point, the portfolio up-and-down is much greater than what we can add to it, so what the heck?
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Old 11-30-2009, 10:52 PM   #44
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How much is 'enough'?

We have what we have. We have enough to survive for the rest of our lives if we launched today. That is the only measure I need.

However, if we had to launch today, we would not be living where we are now and our life would be substantially different. BUT we WOULD survive in some comfort and safety.

Our net worth is not down 30%, but our retirement funds only are down about 28% from June of 2008 (our peak). This even after I had to pull out a chunk this year when I was out of work. We are still way ahead on our house because we are in a good place and didn't do stupid things.

We continue to work so that we can improve our final situation. Our aim is to be debt-free when we retire. We can't do that today, but we could manage. DW would not like it, but we could do it.
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Old 12-01-2009, 01:14 AM   #45
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I'm better off today than I was last year, and much better off than in 2001. I was very fortunate to have a pessimistic view back then and bought gold and gold funds. Now I'm considering selling to lock in my gains, but am doing much thinking and research as to what to move my money into.

I like this sense of soon having a final tally that I can plan around.

And the difference between an optimist and a pessimist is that an optimist will be continually disappointed, while only a pessimist can be pleasantly surprised

I guess I'm lucky that I'm in risk assessment by profession, so I have a natural tendency to factor in the downside and give it some weight...
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Old 12-01-2009, 09:17 AM   #46
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I'm still working, but did similar to what Brewer did. Paid off most debts and am now starting to increase savings and retirement contributions again. Also refinanced to lock in a low rate.

I'm underemployed too, but working on my second COLA'd pension in the process. I can live with it. Pays well, is secure, etc.

I bought my house in 1993, so really don't care what it's value is since I'm not selling it. I have to live somewhere and my mortgage is cheaper than most rents.

So, I guess my ideas of what is enough have not changed. I think I am a bit uncertain as to what enough will be, so am working on ways to get there.
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Old 12-01-2009, 11:15 AM   #47
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I reduced my holdings in early '08, and in early '09 started buying again, this time for yield. Sold the 10-year residence at a fair price in a steady market. Most savings are in bonds and cash for flexibility - I really, really want to retire in 2-3 months. There's enough for a low-cost life in a cheaper, sunnier location, without having to work. I'm single, live way under salary and have been saving a LOT for y-e-a-r-s.
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Old 12-01-2009, 12:10 PM   #48
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My retirement accounts are probably down 15% or so. No matter since I have 5-10 years to go. I bought as the market dropped and what I picked up in March has a nice return.

My active trading accounts got creamed last September. They're still about 75% off.

As for the house, eh. I live in it; it's not an investment. All I care about is whether I can sell it and pay off the mortgage.
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Old 12-01-2009, 12:35 PM   #49
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It is interesting the number of posters who are not concerned with the value of their homes.

Clearly, I agree you should not consider it as part of your retirement accounts to fund everyday living. However, a home can be a major asset (to sell/ reverse mortgage) in the event you need to fund end of life type expenses (like assisted living costs).

So in that context I see it as an asset that can be tapped if need be, and so an important leg supporting any retirement “stool". Given that approach, the value of the asset and its potential future value is not to be quickly dismissed.
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Old 12-01-2009, 12:43 PM   #50
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So in that context I see it as an asset that can be tapped if need be, and so an important leg supporting any retirement “stool". Given that approach, the value of the asset and its potential future value is not to be quickly dismissed.
I don't see my paid for house as a leg on my retirement stool, more as an option of last resort - it's there, but with a sign saying "In case of emergency, break glass".
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Old 12-01-2009, 12:45 PM   #51
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If we wanted to sell our house right now, or in the next 2-3 years, yes, I would be worried.
As for retirement plans, I consider the equity of the house as I do SS.
I am making plans for having zero from either. If I have any income from either source, it is gravy. But my retirement will not be affected if neither SS or the house provide income as my retirement is built around not having any income from either source.
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Old 12-01-2009, 12:53 PM   #52
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I do want to sell my house and move later in 2010. Oh well.

Anyway, all my house is to me is a way to keep from having to pay rent, and worry about rent increases. My retirement expenses are lower due to having my house. That, plus quality-of-life issues are the only ways in which my house figures into my ER plans.

I don't expect it to help much if/when I go into assisted living. If every baby boomer is throwing the value of their home into assisted living initial fees, I can only assume that the fees would rise accordingly so it would be a wash. All you younger folks should consider investing in assisted living providers IMO.
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Old 12-01-2009, 02:30 PM   #53
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I think there was a 3-month run-up of 10% just before the peak in Oct-Nov 2007. So if you are down 10% to 15% from the peak, you are likely where you were at in late summer of 2007.

Suppose for a brief 30 seconds tomorrow morning, the stock market was up 10-fold and returned back to today's levels before you could take action, would you go around talking about how you lost 90% of your portfolio value from "the peak"?
This is a very interesting point. My initial reaction was that nobody would have made a life-changing decision based on some intra-day stock levels, but might have based on several months of data. But I started giving it some more thought, and actually pulled out my spreadsheet from 2007. I looked at what was happening during the earlier part of 2007, which BTW were the months leading up to my retirement. And you know what? You're right - I had forgotten how big that "bubble" really was in '07, and how fast everything was rising. It turns out my NW now is about where it was a few months before I retired, and if I thought that was good enough then I should just relax a little bit now. Thanks!
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Old 12-01-2009, 05:24 PM   #54
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I am surprised that the decline in real estate values isn't more of a drag on people's observations, given home prices are off anywhere from 30 to 60% depending on where you live and how expensive a home you own.

I suppose another way to have asked the question is do you feel better or worse off given the recent "mess" and is that impacting your "plans" for the future (either reduced spending, pushing back ER date, etc.)?

In our own case, we are better off given a decision to exit residential real estate and rent. A combination of smarts and luck as a change in location coincided with the meltdown.
NPOMA...

My house "lost" maybe 10% value from the "peak". Prices didn't bubble much in DFW, but the never-ending glut of homes which kept appreciation down has kept pressure on valuations, too. If I HAD to sell today, I might "lose" more than 10%, due to the recession/credit crunch/housing glut. That would still leave me with a chunk of change, albeit smaller, since I have a fair amount of equity. Then what? Have to live somewhere... Of course, I may do just that in a few years, and convert to something with less maintenance.

As for the "magic number", it has/is shrinking somewhat. My expectations for future growth are "modest", though with what I have now, and early SS, I would have enough (if I were closer to 62). But I ain't getting any younger, and the work bucket is occasionally sloshing over, so the number may shrink more...

NPOMA - numbers pulled out my a$$
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Old 12-01-2009, 05:43 PM   #55
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It is interesting the number of posters who are not concerned with the value of their homes.

Clearly, I agree you should not consider it as part of your retirement accounts to fund everyday living. However, a home can be a major asset (to sell/ reverse mortgage) in the event you need to fund end of life type expenses (like assisted living costs).

So in that context I see it as an asset that can be tapped if need be, and so an important leg supporting any retirement “stool". Given that approach, the value of the asset and its potential future value is not to be quickly dismissed.
I think the value of my house is off 15% from the peak. I don't have any immediate plans to sell, I can afford the monthly PITI, and I don't factor the value into my retirement plans. Furthermore, since my HELOC lender honored my borrowing request when the commode was hitting the windmill and even recently agreed to resubordinate when I refi'd the primary mortgage, the house appears to remain good collateral. If the value drops further, I don't expect to give a damn.
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Old 12-01-2009, 07:01 PM   #56
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It is interesting the number of posters who are not concerned with the value of their homes.


It is not that I am not concerned about the value of my house I routinely beat myself up over not selling at the market high and renting but I didn't . My house is still a large chunk of change that does not figure in my retirement unless needed but will be a nice asset in my will . My house is down about 27% from the market top but as they say " The bigger( more expensive ) you are the harder you fall " .
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Old 12-01-2009, 08:49 PM   #57
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It is not that I am not concerned about the value of my house I routinely beat myself up over not selling at the market high and renting but I didn't . My house is still a large chunk of change that does not figure in my retirement unless needed but will be a nice asset in my will . My house is down about 27% from the market top but as they say " The bigger( more expensive ) you are the harder you fall " .
Didn't mean to suggest anyone should beat themselves up over not selling, or mark to market on a regular basis the value of their home. You DO need a place to live and your home is not an investment. In fact, if more people viewed their homes the way this forum does, we wouldn't have to deal with the foreclosure nightmare currently facing the nation: a not small part of the economic mess.

I was just trying to understand how others viewed a decline in value in their primary residence and how it affected or not their view on spending.

Notwithstanding this forum, I would imagine many are adjusting their savings/expenditure plans, no longer relying on outside gains in their homes.
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Old 12-01-2009, 08:54 PM   #58
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LARS, FWIW, if I had not just done a refi (and had to get an appraisal) I would not have more than a vague sense of my home's value. I am a lot more focused on how fast the mortgage balance is declining than on what the value does.

I agree that those who had pie-in-the-sky ideas about home values are likely no longer counting on equity to finance their retirements. But I don't imagine that many forum denizens were planning on that.
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Old 12-01-2009, 09:11 PM   #59
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Our home value is a small fraction of our net worth and really doesn't figure into any of our retirement numbers. Never has. Never will.
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Old 12-01-2009, 09:31 PM   #60
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Our home value is a small fraction of our net worth and really doesn't figure into any of our retirement numbers. Never has. Never will.
Same here. It's a place to live, and enjoy our retirement lifestyle. Nothing more - nothing less (and yes, it is paid for )...

Its estimated value is carred in our "estate gross net worth" number - different from our "retirement assets gross net worth" number...
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