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Old 10-17-2008, 09:13 AM   #41
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If you have the money to retire today, seems like today is the BEST time to retire. Chances are your nest egg has no other place to go but up!
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Old 10-17-2008, 09:14 AM   #42
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I hear ya'. I'd go part-time tomorrow if circumstances permitted.
Sounds like work has increased enough that you need to change your sig! Sorry to hear that.

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It's that "part-time" to "no-time" transition that confuses me, but that's still a few years down the road.

Feel like I've been nibbled by a black swan. Don't care to find out what it feels like to get fully bit, so we march on.
Money isn't everything - - sure, we need the necessities, but how much are we willing to put up with, in order to ensure luxuries? Not much, in my case, though I think some people really feel a need for luxuries after ER.

On the other hand, I do view good medical care as a necessity. Some might consider that to be a luxury.

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Heck, temps are in the 60s and 70s, blue skies, quick 9 holes planned for later today, weekend awaits.

Jeez, just read my post and I'm starting to sound like UncleMick heh heh heh.
pssst!! Wellesley! Temperatures are about like that here, too, with blue skies, but the forecast is 50% rain. So, I brought a raincoat to work and felt pretty stupid about doing that. I will get off after nine and a half hours here, but I need to go home and do laundry and dishes and fix dinner. The weekend is another matter, since the weather forecast is great and Frank always comes up with something or other that is fun for us to do. I'll be thinking of you out on that golf course this afternoon and hope you have a great game!
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Old 10-17-2008, 09:31 AM   #43
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I hear ya'. I'd go part-time tomorrow if circumstances permitted.
Tampa, FL (10% retired)

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quick 9 holes planned for later today
Yeah, but what are you going to do after you're done with your colonoscopy patients?

Livin' the dream baby, livin' the dream....
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Old 10-17-2008, 10:01 AM   #44
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Tampa, FL (10% retired)
Which is precisely why I get to play golf this afternoon...

Workin' on the image: fat cigar, big old Cadillac, ample belly, Ivy League hat and on thinking mostly about the 19th hole.
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As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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Old 10-17-2008, 10:33 AM   #45
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Well I still planning on retiring in 5 weeks at age 55.

So - count me as another one planning on retiring in the worst of times. I plan to be retired for 30 years or more - so the investments that are down now will have time to recover.

H and I have checked and re-checked and we're OK - both from a short-term cash flow and long term asset growth position. The stock market still makes me nervous - but I just have to stop checking it so often.
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Old 10-17-2008, 10:44 AM   #46
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Well I still planning on retiring in 5 weeks at age 55.

So - count me as another one planning on retiring in the worst of times. I plan to be retired for 30 years or more - so the investments that are down now will have time to recover.

H and I have checked and re-checked and we're OK - both from a short-term cash flow and long term asset growth position. The stock market still makes me nervous - but I just have to stop checking it so often.
Just make sure you have a few years of investment income in "safer" stuff so you won't likely be in the position of having to sell stocks very low if this continues a little while longer.

1975 was a much better time to retire than 1973, and October 2008 is a much better time to retire than October 2007, assuming the math still works.
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Old 10-17-2008, 10:54 PM   #47
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Now that I have turned 60, I notice stories like this a lot. And here I am, FI but still w*rking. It is so tempting to just go in and quit today! But in another year and three weeks I will have lifetime medical, so I might as well wait.
'You don't know what you've got til it's gone...."

The MegaCorp that I work for decided last year to discontinue offering lifetime medical to retirees. I had completed 23 of the required 30 years to get that benefit. Now its gone and I really -really- miss it.

W2R, count yourself as lucky to still have this option!

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Old 10-18-2008, 12:05 PM   #48
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It seems ironic and counter-intuitive that today - after many of us have suffered huge losses - would be a better day to retire than a year ago. With the damage and uncertainties around us, it's probably not really true in most cases.

However, if during and after this trial by fire, the math STILL works out, then it's certainly a good sign. Strangely enough, that's the case for me. According to Firecalc, I'm far better off now than I was a few years ago, despite a precipitous drop in net worth, mostly due to a shift from an ultra-conservative financial stance to one in which stocks play a much heavier role. My own spread-sheets say the same so long as I add slightly to the risk premium of stocks (conservatively estimated) going forward.

Still, I expect I'll keep working a few more years until the worst of these times are behind us.
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Old 10-18-2008, 01:38 PM   #49
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Still, I expect I'll keep working a few more years until the worst of these times are behind us.
In other words, you could, but wouldn't. Chicken!




Just teasing. One wants to be safe...
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Old 10-22-2008, 07:57 AM   #50
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Not even close between these two, at least if you were properly diversified (large cap, small cap, international, REITs, emerging markets and bonds).

Most people who entered 2000 properly diversified lost relatively little even if the headline indices got whacked hard.

Everyone who entered 2008 properly diversified got crushed.

I will say that if you can still live off of 4% of your portfolio today, it's probably not a bad time to start retirement. One year ago, on the other hand...
The person who retired in 2000 has also been hit by 2008.
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Old 10-22-2008, 09:18 AM   #51
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The person who retired in 2000 has also been hit by 2008.
Note I said "properly diversified."

Properly diversified people did NOT get hit hard by the 2000-2002 market.

Small caps and REITs were WAY higher. Emerging markets did well. Developed non-U.S. stocks didn't fall as hard as U.S. large caps.

For these people, 2000-07 overall was a good period, and 2000-02 was a mild correction in a long bull market from 1982-2007. With nothing more than broad diversification, I lost about 10% in that whole terrible market despite being 70% invested in equities, and fully participated in the recovery off the 2002 lows.

Note that for people properly diversified, there IS no refuge from getting creamed this time. Everything sucks and nothing works. As well as diversification worked in 2000-02, it's failing here -- at least where equity asset classes are concerned.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 10-22-2008, 09:24 AM   #52
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Note I said "properly diversified."

Properly diversified people did NOT get hit hard by the 2000-2002 market.

Small caps and REITs were WAY higher. Emerging markets did well. Developed non-U.S. stocks didn't fall as hard as U.S. large caps.

For these people, 2000-07 overall was a good period, and 2000-02 was a mild correction in a long bull market from 1982-2007. With nothing more than broad diversification, I lost about 10% in that whole terrible market despite being 70% invested in equities, and fully participated in the recovery off the 2002 lows.

Note that for people properly diversified, there IS no refuge from getting creamed this time. Everything sucks and nothing works. As well as diversification worked in 2000-02, it's failing here -- at least where equity asset classes are concerned.
When the market hit the frothy highs in 1999, there were only 30 COMPANIES that were driving the market at that time, so a slowdown was already happening.........
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Old 10-22-2008, 09:31 AM   #53
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If you have the money to retire today, seems like today is the BEST time to retire. Chances are your nest egg has no other place to go but up!
Some of the comments regarding retiring now vs a year ago are confusing the circumstances. Most folks have suffered sugnificant portfolio losses this past year.

I agree, I'd rather retire with $1M today than $1M last year in terms of portfolio survivability. But I'd be less enthusiastic about retiring with $0.7M today vs $1M last year.

The statement
Quote:
If you have the money to retire today
is interesting hypothetically, but who on the verge of retirement hasn't been touched by the current pullback?
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Old 10-22-2008, 10:07 AM   #54
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If you run, or ran, firecalc in the past few weeks and your retirement scenario still works, then it would seem you have the money to retire today. The market is down 40% or so. Your portfolio is most likely down something. It seems to me, that if your retirement plans still work, then you are in good shape and this is a good time to retire. The market could go down another 40%, but the odds are against it, and besides, firecalc would say you could still survive a great depression type turn down from here.
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Old 10-22-2008, 10:23 AM   #55
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If you run, or ran, firecalc in the past few weeks and your retirement scenario still works, then it would seem you have the money to retire today. The market is down 40% or so. Your portfolio is most likely down something. It seems to me, that if your retirement plans still work, then you are in good shape and this is a good time to retire. The market could go down another 40%, but the odds are against it, and besides, firecalc would say you could still survive a great depression type turn down from here.
I understand what you're saying Rustic. I'm just pointing out that not everyone approaching RE is doing so with a huge cushion (ie., worked extra years) so that a portfolio reduced by 20% - 40% would still survive.

Firecalc tests using historical data. A larger portfolio, all other things being equal, will give higher survival results everytime.

But, yes, if you test your currrent plan (current portfolio, investment style, other income, withdrawals) Firecalc back-testing is just as good today as it was last year, or at any time for that matter.
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Old 10-22-2008, 11:11 AM   #56
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.
But I'd be less enthusiastic about retiring with $0.7M today vs $1M last year.
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But, yes, if you test your current plan (current portfolio, investment style, other income, withdrawals) Firecalc back-testing is just as good today as it was last year, or at any time for that matter.
I've been meaning to post on this - and those two statements touch directly on the point, so here goes:

FIRST) For any discussion of the FireCalc results, we have to assume the future is no worse than the worst of the past. You can add a comfort factor on top of that (and I suggest it), but that is going beyond FireCalc.

With that in mind, if we assume the drop from a $1M portfolio to a $0.7M portfolio fits a historical pattern, then I think you are absolutely NO WORSE off retiring now with $0.7M today, if you had $1M a year ago.

My reasoning is, bad times follow good times. Otherwise, it would just be an extended bad time in FireCalc data - and that would be determining your success/fail rate. So, those failures in FC are based on entering the start of a bad time with $X in the portfolio. Which also means, you just came off a relatively good time, since bad times follow good times.

So - if $1M was good enough a year ago, and you retired, you would just be 'living' one of those FC 'bad times' today, and you could say - history and FC say I should be OK (OK defined as whatever % success you were 'OK' with originally). And, your portfolio would be down around $0.7M. Actually, a bit lower since you would have drawn it down. Sooooo....

I guess a person is actually BETTER OFF retiring now after a market drop, than retiring at the peak, and living through the market drop? The opposite of what you said.

There was probably a much better way to state that - it's actually pretty simple, but it seems to take me a lot of words to get it out. I should probably post a graph.

Another way to say all that - FC looks forward (applying historical data to a 'pretend' future), but it does not ask you for YOUR history. Are you retiring AFTER a BOOM, after a DROP, or after a flat-line. I think that is relevant to the pattern.

Sorry for getting so long on that.

Regardless, I agree with you that from an emotional standpoint, retiring now with a shrunk portfolio is going to feel discomforting to most people. But the numbers indicate the opposite (I think - please anyone, correct me if I'm misapplying FC).

-ERD50
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Old 10-22-2008, 11:17 AM   #57
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How could this thread have drifted so far from the topic title, “worst possible retirement date”? Okay, IMO, meeting new people at the coffee shop is better than online dating. You can go really slow and observe them over time.
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Old 10-22-2008, 12:23 PM   #58
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Okay, IMO, meeting new people at the coffee shop is better than online dating. You can go really slow and observe them over time.
Not if you are a relatively short and bald guy. Our best chance is to have the ladies fall for us from the inside-out, because first impressions from the outside-in sure aren't going to get her attention...
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Old 10-22-2008, 12:40 PM   #59
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I've been meaning to post on this - and those two statements touch directly on the point, so here goes:

FIRST) For any discussion of the FireCalc results, we have to assume the future is no worse than the worst of the past. You can add a comfort factor on top of that (and I suggest it), but that is going beyond FireCalc.

With that in mind, if we assume the drop from a $1M portfolio to a $0.7M portfolio fits a historical pattern, then I think you are absolutely NO WORSE off retiring now with $0.7M today, if you had $1M a year ago.

My reasoning is, bad times follow good times. Otherwise, it would just be an extended bad time in FireCalc data - and that would be determining your success/fail rate. So, those failures in FC are based on entering the start of a bad time with $X in the portfolio. Which also means, you just came off a relatively good time, since bad times follow good times.

So - if $1M was good enough a year ago, and you retired, you would just be 'living' one of those FC 'bad times' today, and you could say - history and FC say I should be OK (OK defined as whatever % success you were 'OK' with originally). And, your portfolio would be down around $0.7M. Actually, a bit lower since you would have drawn it down. Sooooo....

I guess a person is actually BETTER OFF retiring now after a market drop, than retiring at the peak, and living through the market drop? The opposite of what you said.

There was probably a much better way to state that - it's actually pretty simple, but it seems to take me a lot of words to get it out. I should probably post a graph.

Another way to say all that - FC looks forward (applying historical data to a 'pretend' future), but it does not ask you for YOUR history. Are you retiring AFTER a BOOM, after a DROP, or after a flat-line. I think that is relevant to the pattern.

Sorry for getting so long on that.

Regardless, I agree with you that from an emotional standpoint, retiring now with a shrunk portfolio is going to feel discomforting to most people. But the numbers indicate the opposite (I think - please anyone, correct me if I'm misapplying FC).

-ERD50
Agreed. Another way to look at it is that you should theoretically be able to have a higher SWR if starting retirement just after a large market correction than just before, since you can reasonably expect higher returns (based on history, but not guaranteed, of course). There was a study from the Journal of FP that was posted here a while back that posited just that, using PE10 as an indicator of what your SWR could be.

For example, if you had a 60/40 AA, a $1 mil portfolio would yield $40K/yr with a 4% WR but after a 33% mkt correction you would have $800K portfolio. You could increase your SWR to 5% to yield the same yearly income. It's really using essentially the same logic as your example, IMO.

Now with all that said most people would not want to do that. Most would be more conservative and wait for the market to recover before pushing up their WR. The same way most would not continue to increase their drawdown for inflation in the face of a severe market correction.
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Old 10-22-2008, 12:51 PM   #60
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Most would be more conservative and wait for the market to recover before pushing up their WR. The same way most would not continue to increase their drawdown for inflation in the face of a severe market correction.
Thanks for the reply - I agree with being conservative. I'm just trying to point out, that in this regard, FC is already being conservative and assuming the worst.

But then, OTOH, I think people are not conservative enough in many cases, by taking the 95% 'success' (5% FAILURE) as 'good enough', and assuming that 30 years is 'long enough' for an ER. And of course, the future certainly CAN be worse than the past. In fact, it is almost a guarantee. That future may or may not coincide with our retirements though.

-ERD50
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