What to do...

[CindyBlue]

I retired at the end of December, 2007. You know what happened right after that, of course. Since you planned to wait for quite some time to withdraw anything, chances are good that things will recover along the way. It would be good if you could tell everyone what fund(s) you are invested in. The answers might be more specific if that information was known.

I'm not sure I know. I signed up for Vanguard and the strategy there that supposedly decreases risk the last few years until I am 67. I'll try to look it up.

I know I should know more, and it's rather embarrassing not to know when I'm posting here but the reality is I don't know much. I got onto the safest thing I could find all those years ago (Vanguard) and let it take care of itself all these years.

 

[CindyBlue]

Lots of good advice given here.

There is almost always a huge gap between knowing something in theory and experiencing it (examples abound). When it comes to the market and investments, I never found a lot of fear and worry in the theory. I did find it in the experience. I began investing in 1982 and rode all the downturns out based on wise counsel, only nipping and tucking a bit if necessary. It worked out well.

It's a skill that grows with practice but no one, including myself, really wants the practice

Wow, that is so true... "I never found a lot of fear and worry in the theory. I did find it in the experience." Sure resonates with me today

 

[DrRoy]

You have plenty of cash. Wait it out.

 

[Retired Expat]

I don't know what I'd do without you people here.
I have enough cash to get me through three years or more of expenses, if we don't get sick and so all of a sudden have a lot of expenses. In a year I'll be on Social Security.
Looking at the Vanguard statement they sent yesterday just shocked the hell out of me...I lost two years worth of living expenses in two months. I just don't want it to go down to nothing (can it)

In January I made an offer on a house. Was all going to be money made in the market in the last year or two. Fast forward a couple of months and that money is gone! So I lost a whole house worth of money! Fortunately the deal fell through or I would be sitting on 2 houses right now....

At the beginning of this when there were many saying it will pass with Spring or in a month I pulled 15% out of equities while down only 10% from their crazy peak.. Can live 10 years on that at the current lockdown spend level or 3-4 years at normal spending.. Really seeing how much was going to dining, travel, entertainment etc in the “Before times”. The rest will ride it out and I don’t look at my portfolio anymore!

Fortunately am diversified into things that also generate income and are not just US based so besides the added Cash on Hand have income that at the moment is not stock market related. Of course if the entire economy tanks and everyone is out of work that income stream will likely dry up into a trickle....

 

[racy]

"Two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. ... We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." -- Warren Buffett, Berkshire Hathaway.

If it works for this guy, it might be worth trying.

 

[Gary 1958]

I don't know what I'd do without you people here.
I have enough cash to get me through three years or more of expenses, if we don't get sick and so all of a sudden have a lot of expenses. In a year I'll be on Social Security.
Looking at the Vanguard statement they sent yesterday just shocked the hell out of me...I lost two years worth of living expenses in two months. I just don't want it to go down to nothing (can it)

I'm in the same boat as you but haven't quit my job. In February I was starting the paper work to move my 410k to and IRA. The plan was to stop working on June 1st. Things have really changed and I'm holding steady with my 401k until things stabilize a bit.

I will be 62 in August. Before the virus I wasn't going to start taking SS until full retirement age of 66.8. I have 2-3 years worth of cash so I'm now looking to retire in August and turn on my SS and fill in the gaps with my cash savings. This will save me from having to touch my retirement accounts. I'm hoping things will have sorted themselves out in two years and at that time I can start withdrawing money from retirement accounts.

The one good thing about this, if there is one. I was always wondering when the long bull market would end. I now no longer have to worry about that. Now it's how long will the bear market last?

 

[CindyBlue]

I'm in the same boat as you but haven't quit my job.

Are you still going to Fire? Or keep wo**king for awhile longer?

 

[Gary 1958]

I haven't been on the Fire site for a few months. My numbers there were always extremely good before this recent curve.

I plan to work a few more months. Everyday we seem to get a new round of hurdles to manage.

I'm alone with no bills so I can live relatively cheap if I need to but that isn't the retirement I saved for.

The manual I received on how to live a happy life seems to be missing several of the key chapters.

 

[RobLJ]

If you've got enough cash for 3 years, you've done fine to prepare (except maybe psychologically)

I don't know what I'd do without you people here.
I have enough cash to get me through three years or more of expenses, if we don't get sick and so all of a sudden have a lot of expenses. In a year I'll be on Social Security.
Looking at the Vanguard statement they sent yesterday just shocked the hell out of me...I lost two years worth of living expenses in two months. I just don't want it to go down to nothing (can it)

 

[targatom2019]

Wow, that is so true... "I never found a lot of fear and worry in the theory. I did find it in the experience." Sure resonates with me today

Still try to find out what funds you have at vanguard and your asset allocation. I bet they got you in a target date fund which is perfect.

 

[easysurfer]

Stay the course and wait it out. Since all this commotion started, I've only look at my balances once. That was to do my usual tallying for the end of 1st Quarter. Have not plans to look until end of 2nd quarter. No rebalancing fo me until 2021 .

 

[UnrealizedPotential]

Fine...I retire and the market crashes...sigh...
I saved diligently for 40+ years. I had enough to retire. I have most everything in a 403b at Vanguard. I've lost a lot the past two months. Any advice as to what I could do at Vanguard to not lose any more, considering that I don't really know what I'm doing? Should I just wait it out? Can/should I tell them to move the money to a more conservative place, and if so, how do I do that?

Hi CindyBlue,

I have no advice to offer you, but I will write how I approached retirement and my AA. First off, I put over 40% in a global bond fund. It lost half of what the market did in this bear market, but has bounced back very well. The other thing I did was limit my risk in my t-ira. for my t-ira I have half in the SP500 and half in a balanced fund.

That right there takes some fear out of investing while still giving me some income and growth. The rest I put in stocks, but really it only comes out to a little over 50% stocks. I get my income from this and I know I am not going to get absolutely killed like I did in the 2008/2009 downturn. That was bad. So when I retired in 2016 I made sure that couldn't happen to me again.

I hope that helps.

 

[jeroly]

Thanks for replying...I don't really have an "investment polity." And I don't understand the language very well, sorry. I am on a "path" at Vanguard that moves my money to be more conservative as I get closer to retirement, which they put at age 67 (I'm 65) Last year, I called and asked them to move it to the next year, i.e., more conservatively, and they did. I have been to one financial adviser, and he said I was on the right track.
If my money is in a 403b, and I'm not contributing to it anymore, does that mean that my losses are final, even when - if! - the market begins to climb back up again?

Based on this, I would hypothesize that you are in a target date fund, possibly the 2020 fund which is about 50% stocks, 50% bonds.

If your March statement was showing you down 2 years of spending, and its year-to-date performance was down 11%, as of March 31st, then you had something around 18-20 years worth of spending in it.

So, you now have something like 16-18 years worth of spending in it (the market has recovered a bit from its end of March lows). You say that you don't need to touch it for another seven years, so overall you've got 23-25 years worth of expenses in financial assets.

Now, in the entire history of US markets, only once or twice has that level of savings and spending (taking bumps up annually to keep up with inflation) ever led to a retiree running out of money in thirty years. So unless your family is particularly long lived you should be fine even leaving your social security payments out of the picture entirely.

If you were managing this nest egg by yourself, what you would probably want to do is to rebalance your stocks and bonds to return to your desired asset allocation. However, if you do in fact have these $$$'s in a Vanguard target date fund, Vanguard does this for you automatically, and also manages a 'glide path' that makes the allocation more conservative as you age. So there's really nothing to do! Remember, you have a very large cushion relative to the 4% or so you'll start taking out in a few years, so even if you were already making withdrawals, you'd have loads of time for the market to recover!

 

[jasg]

Staying the course worked for me.

I retired a month after the market bottomed in March 2009 - 95% stocks.

I lived of cash & taxable savings and I did nothing with my 403b for the first 5 years. Over the next 5 years I moved it to 50% stocks.

Now, even after two years of RMDs from the 403b it still has tripled since the bottom in 2009.

 

[Gearhead Jim]

I've always stayed the course before, and was glad.
But this time we are in our mid-70's and wondering how old we will be when our January 40% equity allocation gets back to what it was.

We have enough cash/CDs/bonds/pension/SS to last us 10+ years unless inflation goes completely berserk, but still...

Of course, if we die from C-19 or something else, then it won't matter.

 

[Dash man]

We made a decent recovery in the recent bounce and decided to take some off the table to add to our cash cushion. My Roth IRA and tIRA are back to where they were before the crash thanks to offloading a couple of stocks whose fundamentals weakened and putting it into Amazon, Chipotle and Costco. My taxable account is still down, but fortunately I dumped Boeing and Royal Caribbean early with some dividend ETFs. I still have plenty in equities, but more of a cash cushion for several years. I’m sleeping well.

 

[stephenson]

CB,

Vanguard is simply a financial company.

You can get help, here, and at bogleheads or a hundred other places ... but, you need to learn quickly.

You’ve got time to study - don’t put it off.

 

[piccolopat]

I would stay the course with investments but take a look at cutting back on discretionary expenses until things turn around. I do this to avoid or minimize making any withdrawals during major downturns like this.

 

[Retired Expat]

I would stay the course with investments but take a look at cutting back on discretionary expenses until things turn around. I do this to avoid or minimize making any withdrawals during major downturns like this.

What discretionary spending is there to cut back on? Other than online shopping most everything is a fixed expense for me these days. And many of the usual and customary expenses are way down too! Think I spent $5 on gas this month! And that is only because gas is not cheap here like in the US

Sure you could give up some subscriptions like Netflix but.....thought about cutting back on the alarm monitoring as I am always in the house!

 

[piccolopat]

What discretionary spending is there to cut back on? Other than online shopping most everything is a fixed expense for me these days. And many of the usual and customary expenses are way down too! Think I spent $5 on gas this month! And that is only because gas is not cheap here like in the US

Sure you could give up some subscriptions like Netflix but.....thought about cutting back on the alarm monitoring as I am always in the house!

Everyone's budget is different. We have discretionary spending like travel, a new car fund and home improvement projects that can easily be delayed. I'd love it if my husband cut down on his Amazon shopping. Other discretionary spending like our cable and cell phone bills can be reduced but for us that is not where we would cut first. I could have retired earlier if I didn't care about funding these kinds of things. Worse case I wouldn't stay in NY with my horrendous property tax bill and a house/property that is really too big for the two of us. Each person has to decide what is needed versus discretionary for them. The point of my original post is that when the market swings this far down, I cut back where I can to minimize realizing the losses that would otherwise be paper losses only right now.

 

[CindyBlue]

Still try to find out what funds you have at vanguard and your asset allocation. I bet they got you in a target date fund which is perfect.

Ok, I finally looked it up. This is what I'm in: "Vanguard INSTL Target Ret 2020 Fund." I tried to find the asset allocation but can't.

I know it was farther on when I called them last year...I think it was 2025. I asked them to make it more conservative sooner than 2025, and this is what they did.

Does that sound right?

 

[targatom2019]

Ok, I finally looked it up. This is what I'm in: "Vanguard INSTL Target Ret 2020 Fund." I tried to find the asset allocation but can't.

I know it was farther on when I called them last year...I think it was 2025. I asked them to make it more conservative sooner than 2025, and this is what they did.

Does that sound right?

Target 2020 is perfect for current retirees and it's very conservative. No need to look up the AA within the fund. How much you withdraw from your portfolio per year is very important at this point and hopefully not more then 3% per year and be flexible.

Do you have emergency $$$ and SS ?

 

[CindyBlue]

Target 2020 is perfect for current retirees and it's very conservative. No need to look up the AA within the fund. How much you withdraw from your portfolio per year is very important at this point and hopefully not more then 3% per year and be flexible.

Do you have emergency $$$ and SS ?

So glad to hear you say that about the Vanguard 2020 Fund! I might get more sleep at night!

Not withdrawing yet. Getting a pension now that covers about half my budgeted expenses, and hopefully Soc Sec will cover the other half. Have savings that I designed to cover that other half until I get to FRA Soc Sec in March of next year. Have enough in savings to cover about three years of budgeted expenses.

My "budgeted expenses" are pretty accurate so far in the first 7 months of retirement.

 

[Helen]

Target 2020 is perfect for current retirees and it's very conservative. No need to look up the AA within the fund. How much you withdraw from your portfolio per year is very important at this point and hopefully not more then 3% per year and be flexible.

Why shouldn't Cindy know what the asset allocation is within the fund? The more she understands the more comfortable she will be with her investments.

Why not more than 3%? The SWR is 4%, did I miss something unusual about Cindy's situation?

 

[targatom2019]

Why shouldn't Cindy know what the asset allocation is within the fund? The more she understands the more comfortable she will be with her investments.

Why not more than 3%? The SWR is 4%, did I miss something unusual about Cindy's situation?

because I did not want to make it more complicated for CindyBlue, the fund is already a balanced fund with 50% bonds but it's good if she knows everything about her Target 2020 fund.

I think the 4% SWR from the Trinity Study is based on a portfolio of 70/30, her portfolio is a balanced fund with less growth less risk so it's much safer to lower SWR to make sure she will not rum out of money specially here SS & pension already enough to cover expenses.