Originally Posted by Bigdawg
Outstanding! Next week will be five months in. 49 now so a bit behind you. DW(43) still works. We both have military pensions so things are looking pretty good. My 22 yr old military son is motivated by Doug Nordman to fully retire at 41 with 20 yrs in the military. Good luck son and congrats to you Frayne!
Looks like you have no problem figuring out what you're going to do all day!
I went over 13 this week. (On 1 June we had a huge south-shore swell, so I only surfed the 13-footers.) Our portfolio has nearly doubled over that time, partly due to multiple mortgage refinancings and a 28% cumulative COLA on my active-duty pension. But most of those gains came from staying in the market and rebalancing whenever our parameters were triggered. That includes 2002 and 2008-09.
It's beginning to seem that we're going to end up on the upper slope of the >80% success ratio.
Originally Posted by FlyBoy5
Tell your son to stick with it. There are a few of us military retirees that haven't gone to w+rk after the service.
A very few-- on this forum in 2004 it was me and GDER. The membership has grown by at least an order of magnitude since then, but today I bet we could take a muster on two hands and still have fingers left over.
Originally Posted by Terryjm51
Ok so what is the secret to increase net worth?
I am very frighten to pull THE TRIGGER because on losing NW
I understand living below your means but 4.? 5.? Seems like a big number in my portfolio to draw that much
You have several choices.
1. Follow the 4% SWR of the Trinity Study. If you have more than an 80% success ratio from FIRECalc then you're probably financially independent.
- If you want to avoid losing all of your net worth then put up to 20% of your assets into a single-premium immediate annuity. (You should probably include Social Security as part of that 20%.) That SPIA income will insulate you from total portfolio failure.
- Put the rest of your assets mostly into passive equity index funds. It should be at least 50% of your total assets, and if that makes you nervous then put it into passive dividend-paying equity index funds.
- When you need to withdraw from your portfolio to cover your retirement expenses, keep about two years' worth of that annual withdrawal in CDs and a money market fund. That way you can pay your expenses (beyond dividends, interest, and annuity income) for two years of a bear-market recession without having to sell beaten-down equities.
So your FI asset allocation would be something like 20% SPIA, 50%-75% equities, ~5% cash, and the rest in whatever other assets you prefer.
2. Follow Bob Clyatt's 4%/95% withdrawal method discussed in "Work Less, Live More". You cut your spending a little during a recession but your portfolio has a much higher survival rate.
3. Keep building your portfolio until you can live off its income (and never touch the principal). That way you don't care what your net worth is-- only that your net income keeps rising with your personal inflation rate. You'll probably have to work longer to accumulate a portfolio that's 30x-33x your annual spending instead of "just" 25x.
4. Work until some crisis (medical, family, layoff) forces you to "pull the trigger".
In the context of those four choices, #1 seems like a relatively good deal.