I'm 35 so a little over 30 years from collecting SS at full retirement age.
Are you doing anything differently now that the market has corrected?
Not yet, but see my comments at the end of this post. Ask me after another 30% drop and I'll probably change my tune.
What is your source of living expenses?
$1.x million portfolio covers living expenses at a 2-3% withdrawal rate (div yield > avg 2014-2015 expenses). I also started a blog and some other side projects post-FIRE and it covers ~100% of living expenses. Wife is also still working (but not for long) which covers 100%+ of living expenses.
Are you selling anything. or spending principle (cash) or only living on dividend and interest income.
So far other income streams cover living expenses so not selling anything. I collect dividends from taxable account and they cover 25-30% of living expenses (and the checking account keeps growing).
Any other sources of passive ( you're retired right) income such as real estate or hobby income?
I started a blog and some other side projects post-FIRE and it covers ~100% of living expenses.
At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc
My gut says 40% or so I would get worried about where my money would come from after 1-3 years (once the cash/bonds on hand is depleted). It looks like we're down 12-13% from our peak, and I'm about 1.5% worried right now (aka sleeping like a plump well fed baby at night).
Even with a 40% drop from the peak, we can take a 4% withdrawal on the portfolio value (under the variable portfolio withdrawal model) and still cover our 2015 budget which includes about 75% necessities and 25% purely discretionary spending. I'm planning on going to a 4% variable withdrawal (or less if we don't need it) so this will be a good test. We could sustain a 55% drop from the peak and still have a 4% variable withdrawal cover all of our core expenses plus some small fun money. I'm also not averse to working a few more hours per week to bring in another $10-15k/yr if it's uglay.
What's your asset allocation ?
97% equities, 1% bonds, 2% cash
How many years of "cash" do you need to feel secure - for living expenses
1-2 years
Do u have dry powder to throw at the market if so what percent of portfolio ?
No, but I might toss some of my living expenses cash into the market if the market does a March 2009 on me. I might also consider margin borrowing, cash out refi-ing the house, or cash out financing a car (if we had one worth anything). Nothing crazy - perhaps 10-15% of total portfolio value.
I put together a 2016 budget to help us spend
more money and so far I'm planning on sticking with it. The budget includes a lot of extra discretionary spending including more on travel. I'm not sure we actually want to do another multi-month trip this summer, so the $ is likely to get diverted to buying a new(er) car instead. And then do a relatively inexpensive and shorter road trip in the new(er) car.
Barring abnormally high unexpected expenses or us tackling some known home improvement tasks, I doubt we'll be able to spend our upgraded budget which is 21% higher than 2015's budget. If we see another 20-30% drop in portfolio value, I will certainly re-examine our budget and consider cutting costs, including postponing the new(er) car purchase. It's really only going to be used for road trips and we have a perfectly adequate car for that right now (but why not splurge on a nice ride if you've got the $).
Then again, if my side hustle income keeps gushing in like it did in 2015, I might proceed with plans to spend the full 2016 budget and then some. Especially if we start seeing discounted recession-like pricing on home improvement and travel.