Worst Possible Retirement Date?

[harley]

Quote:

Originally Posted by cashbalancetrouble I have a question on retirement timing. I ER three years ago but DW continued to work. I did not take my pension yet as it continues to grow at 6% per year. Is now the time to take it and put it into equities? FA has thought this would be good as he always wants more investments. 0.95% fee. DW can get another lump sum pension in two years. We are looking ahead at 10 years with no income before SS to start depleting all the pretax accounts converting to Roths starting in 2010. I expect market will not recover until 2011 and this tells me to stick with the 6 % per year until 2010.

I noticed nobody responded to your question. I think it's a good one. I'm going to assume your pre-tax investments will cover you until you reach 59.5, so you won't be needing this pension money in the next 5-10 years.

I tend to agree (partially) with your FA. I think this would be a very good time to take your pension lump sum out. However, I would invest into something like Vanguard, bypassing the .95% FA fee. And since you think the market won't recover until 2011 (reasons?) you could stick your non-invested moneys in some cash investment to help make up for the lost 6%, DCAing with them over the next 2 years.

You seem to be in a brilliant position here to make your retirement money really count. And since you have the other lump sum available in a few more years, you've got a fallback in case things are worse than anticipated. Good luck.

[ER_Hopeful]

Quote:

Originally Posted by Want2retire 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.

I remember getting megacorp's dept. broadcast email a few weeks ago about some guy's memorial service. I think he was in his 50's, heart attack. xx number of years dedicated to the company, etc...

[cashbalancetrouble]

Harley, thanks for the reply. I think what ever happens while investing you have to analyze the situation and make your choice and then live with it. I know myself and others knew the markets were over sold when the DOW was at 14K+ but the underlying problems were not seen enough to have the strength to bail. So while things are cheap it is time to make hay.

I think I will seek the first lump sum after Jan 1 and possibly do some day trading in ETF on exchange moves based on the volatility moves and will keep close to the bottom for two years. Doing it inside an IRA will keep it all off of taxes and allow us to benefit from our future tax cuts. I also am keeping in mind the 2010 lift of IRA conversion to Roth limit. We plan to do this when we have next to no income.

The games people can play are important before time runs out.

[Gardnr]

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Originally Posted by ERD50 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

Yep. I probably didn't state it as well as I could have, but we agree. I think that people forget that the worst we've seen has been programmed into FC. They also overlook (or ignore) just what that worst case scenario looks like. For a standard 4% WR scenario that portfolio will dip to very uncomfortable levels if the inflation adjusted withdrawal rate is followed thru the dip or if spending is not reduced. All the worse without the benefit of a pension or other annuitized income.