With stock market crash, can you still retire?

[TrophyHusband]

No. Wife retired last year and I was supposed to retire this past July. Our overall portfolio is down 28% for the year, getting worse by the week, and below our "number". That, as well as growing fears of a recession and SOR risk has put my retirement on hold for at least one year, probably 2 or more. #LGB

 

[F.I.R.E User]

No. Wife retired last year and I was supposed to retire this past July. Our overall portfolio is down 28% for the year, getting worse by the week, and below our "number". That, as well as growing fears of a recession and SOR risk has put my retirement on hold for at least one year, probably 2 or more. #LGB

Bonds are suppose to preserve capital right?

 

[audreyh1]

Man oh man, the Dow is still dropping further today! Down 372 points more, so far today.



I am SO GLAD that I have SS and my mini-pension and a paid off house and car, so I don't have to sell my mutual funds for living expenses right now. Hang on, you all, don't sell low.

"I'll think about that tomorrow. After all, tomorrow is another day."

-Scarlett O'Hara in 'Gone With The Wind', by Margaret Mitchell​

Wow, another ouch day! S&P500 hit a new 52 week low.

So far the only asset class way out of whack for me is international equities and I’ve been planning to add a little.

 

[TrophyHusband]

Bonds are suppose to preserve capital right?

Correct, and if it weren't for our bond allocation, it'd be worse. But our bond funds haven't been a shining star in this rising rate environment. Our VBTLX fund is down 15% YTD.

 

[NoEZmoney]

Markets are like tennis balls not dishes. . . .

. . . as in they tend to bounce and not "crash".
We're about to pop-smoke in less than a year and while the portfolio has declined a bit, we're still staying the course we've always done. Sure it would be nice to have a decent bull market to ride out in the sunset on but we've seen the ups and downs of markets for the past 40+ years. Dollar-cost averaging with good funds / stocks/etc. and we've done pretty well over the years. (started in '85 very modestly but have been consistent year in and out.) Not rockstar amounts but the portfolio is where it needs to be and it will recover sooner or later. But our time on terra firma is limited and if we make it close to 2060's we'll be amazed!!

We've gotten a nice arrangements of "buckets" and when we both quit working next year we won't have regular "income" so we plan on Roth Conversions for the next 3 or 4 years at 12-15% effective tax rate. Roths will be left alone and so will Social Security (until 70) so we'll have 5 years on our buckets with no debt. (Woo-hoo!) Our healthcare will be covered by a small gov't pension and I qualify for a discount to boot. We're frugal by nature and have no "stupid stuff" to buy or spend our money on except travel and a lot of that is covered by rewards points.

Data covering the past century’s 15 US recessions show that investors tended to be rewarded for sticking with stocks. In 11 of the 15 instances, or 73% of the time, returns on stocks were positive two years after a recession began. The annualized market return for the two years following a recession’s start averaged 7.8%. Recessions understandably trigger worries over how markets might perform. But history can be a comfort for investors wondering whether now may be the time to move out of stocks or postpone plans.

Keep the faith, there will be more good returns than bad! Like my dad used to say: Act your WAGE and you'll be ok!

 

[11522914]

It is coming in handy, and is kind of fun to buy my T-Bill of the week.

I'm actually enjoying buying my T-Bills of the week/month too.

 

[tominboise]

Well, we did retire 23 months ago and watched our portfolio go way up, and then way down. We are still on the positive side of the amount that we thought we'd need to retire, but it's getting close. I am 62.5 and planning on SS at 70. I may have to go do some consulting if the market keeps dropping. It would be a good time to make some $$ and plow them back into the market for future growth, but I'd rather stay retired. The next couple of months will be interesting.

 

[Exchme]

[/B]

For us we took it at 62 haven't had to touch any investments and don't see we will ever have to.

There again my plan was to have enough in CD's and savings account to never have to touch investments as long as I live. So, taking SS at 62 was a no brainer for us and I don't need a larger SS check when I get older. I will have way more than we could ever spend just from RMD and will just reinvest all those funds.

Everyone has a different way of think about it and no right way or wrong way IMO.

Well folks might check out longevityillustrator.org to see what actuaries think their lifespan might be.

To illustrate, here is a survival graph for a male and female, each 62, non-smoking, excellent health. This shows a 50% chance that one is still around to collect that bigger SS check for 32 years, which would strongly favor waiting to age 70 for the person with the larger benefit.

 

[old medic]

It would be a good time to make some $$ and plow them back into the market for future growth.

Thats why the wife is putting 30% into her 401K. And I could have added a bunch had I did OMY..

 

[TripleLindy]

Well folks might check out longevityillustrator.org to see what actuaries think their lifespan might be.

To illustrate, here is a survival graph for a male and female, each 62, non-smoking, excellent health. This shows a 50% chance that one is still around to collect that bigger SS check for 32 years, which would strongly favor waiting to age 70 for the person with the larger benefit.

That’s an interesting site - thanks for sharing. I just turned 60 (wife is 59), retired at 55, and while our portfolio is healthy, it’s taken a beating recently, which has me wondering about the SS decision. I’m still a couple of years away from having to make it, but even with the 50% chance of EITHER living to his/her mid-90s, it’s not just the lifespan that has to be considered. The 8 year loss of SS income isn’t insignificant and I believe the survivor benefit is lower, which impacts the EITHER equation for us, as my wife quit working outside of the home once our first child was born so she has no SS benefits. (I went through a similar calculation when pondering whether to cash out a relatively minor pension.) Vanguard uses an 85% target threshold to determine portfolio survival, so the 50% target in your analysis is an interesting contrast.

I believe that we’ll be able to defer SS for however long we want to, but will still go through a detailed analysis to determine the best option for us. I’m certainly no expert, as I don’t have to even think about it for several years, but I’ll be gaining knowledge as the time approaches.

 

[daylatedollarshort]

For many of us, when to take SS has less of a budget impact than where we shop for groceries. We've gone over this a million times in past threads. What most people in the wait until 70 camp forget to add is a probability factor. Sure, you make more at age 70 if you wait to collect, but your probability of being alive at 70 or beyond the payback period is not 100%. That is the actuarially neutral part. Yes, if you live to be 110 you will likely to come out ahead if you wait to collect, but there is also a higher probability you will collect $0 if you wait until 70 because you might be dead.


Checkbook.org says a household can save up to $3K a year just by changing where they grocery shop in our area, so factors like that have more of an impact on a retirement budget than when to collect SS. Saving $3K a year at 4% over 40 years comes out to over $300K.

 

[Sunset]

For many of us, when to take SS has less of a budget impact than where we shop for groceries. We've gone over this a million times in past threads. What most people in the wait until 70 camp forget to add is a probability factor. Sure, you make more at age 70 if you wait to collect, but your probability of being alive at 70 or beyond the payback period is not 100%. That is the actuarially neutral part. Yes, if you live to be 110 you will likely to come out ahead if you wait to collect, but there is also a higher probability you will collect $0 if you wait until 70 because you might be dead.


Checkbook.org says a household can save up to $3K a year just by changing where they grocery shop in our area, so factors like that have more of an impact on a retirement budget than when to collect SS. Saving $3K a year at 4% over 40 years comes out to over $300K.

Everybody does what they are forced to do or are comfortable with doing...

Myself, I'll wait to age 70 (or at least DW will), if I die before I collect SS, then I won't miss it.
Actually you only need to live to 83 not 110 to come out ahead by delaying SS.

Someone can save a lot by eating cheap, also, don't own a car and just walk to the grocery store will save ~$5K per year. Don't travel, just watch free tv and one can save over $10K per year. But all these issues are separate from SS and mixing them in is adding red herrings to the discussion.

 

[daylatedollarshort]

Everybody does what they are forced to do or are comfortable with doing...

Myself, I'll wait to age 70 (or at least DW will), if I die before I collect SS, then I won't miss it.
Actually you only need to live to 83 not 110 to come out ahead by delaying SS.

Someone can save a lot by eating cheap, also, don't own a car and just walk to the grocery store will save ~$5K per year. Don't travel, just watch free tv and one can save over $10K per year. But all these issues are separate from SS and mixing them in is adding red herrings to the discussion.

The checkbook.org food basket compared identical groceries from store to store, so it is not eating cheap, just paying less for the same food.

According to the Society of Actuaries, a 65-year-old male today, in average health, has a 55% probability of living to age 85. You might not miss the money if you are dead, but for those of us who want to leave money to family it is a key consideration on when to take SS. - https://www.rate.com/research/news/retirement-expectancy.

This discussion is on can you still retire with the stock market crash, not when to take SS. Yes, I can still stay retired, in large part because I don't overpay for good and services, like groceries.

 

[Exchme]

... The 8 year loss of SS income isn’t insignificant and I believe the survivor benefit is lower, which impacts the EITHER equation for us, as my wife quit working outside of the home once our first child was born so she has no SS benefits....

I believe that we’ll be able to defer SS for however long we want to, but will still go through a detailed analysis to determine the best option for us. I’m certainly no expert, as I don’t have to even think about it for several years, but I’ll be gaining knowledge as the time approaches.

You mentioned survivor benefits. Since you haven't claimed, the maximum survivor benefit if you pass away early is the PIA amount (benefit at your full retirement age). It derates if she claims early, though it uses a different schedule than regular benefits and will reach the maximum benefit at 66 yrs 8 months. If you make it past FRA, then the scheme changes and she gets what you would have gotten if you claimed on your last day, (or what you actually got if you have claimed).

The whole thing is quite complicated, the best site I've seen for examining claiming strategies is opensocialsecurity.com. In addition to the standard defaults, you can select life expectancy, discount rates, etc.

 

[street]

I would take a wild guess and say that most here could live a long life without SS. I would also say most here could live the same lifestyle regardless of SS.

So, if one spouse passes away there still would be more than enough for that person to carry on the same lifestyle after one pass away.

 

[aja8888]

I would take a wild guess and say that most here could live a long life without SS. I would also say most here could live the same lifestyle regardless of SS.

So, if one spouse passes away there still would be more than enough for that person to carry on the same lifestyle after one pass away.

Yes, that's our plan. But we are running out of forward years! Too bad one can't just add some!

 

[street]

Yes, that's our plan. But we are running out of forward years! Too bad one can't just add some!

So True aja8888!!

A believe as humans we try to outguess life and put too much into trying to over think much in life. We want to squeeze every penny we can but in the end that plan might not work.

I'm not going to try to guess I'm going to live to be 75 or 100 years of age. Whatever decision that is made for SS may work for your advantage but then maybe not.

 

[aja8888]

[/B]

So True aja8888!!

A believe as humans we try to outguess life and put too much into trying to over think much in life. We want to squeeze every penny we can but in the end that plan might not work.

I'm not going to try to guess I'm going to live to be 75 or 100 years of age. Whatever decision that is made for SS may work for your advantage but then maybe not.

Street, I'm finding out after 79 years of life that having enough money for the remainder of my years is not on the forefront of importance as other priorities that are opening up in front of my eyes as I get older. I have been to way too many funerals already and I have a DW that's not in great health.

I know this thread is about money (as many are here), but it's only one part of retirement that's important.

 

[NW-Bound]

There have been more posters here who ran out of life before they ran out of money.

"And that's all I have to say about that" -- Forest Gump

 

[harllee]

There have been more posters here who ran out of life before they ran out of money.

"And that's all I have to say about that" -- Forest Gump

I wonder if we have ever had any posters on this Forum who actually ran out of money? I can't remember any. A few have gone back to work but I don't think it was because they were running out of money.

 

[street]

Street, I'm finding out after 79 years of life that having enough money for the remainder of my years is not on the forefront of importance as other priorities that are opening up in front of my eyes as I get older. I have been to way too many funerals already and I have a DW that's not in great health.

I know this thread is about money (as many are here), but it's only one part of retirement that's important.

You got that right!!!
The old I get the less I'm concerned about money. Even if I had just enough to live, I would be good with that. My attitude towards money has changed but still want to preserve and sustain what I worked so hard for. What I stopped doing as I have aged is not worried, about how things are going to get paid and if I will enough to the end point. Trying to make a few more dollars by taking SS and trying to guess what is best. I learned to just live and be thankful I'm healthy today and can still do the things I love to do in live. It's just money.

 

[JoeWras]

Most posters just disappear with status unknown. Hard to know what happened. We've had a few families come on an announce someone's passing. But I'm gonna guess if someone runs out, they may not care about posting here anymore - or may not even have the means.

 

[NW-Bound]

I wonder if we have ever had any posters on this Forum who actually ran out of money? I can't remember any. A few have gone back to work but I don't think it was because they were running out of money.

You have not been here long enough. I remember at least two who voiced their financial worries, then disappeared. There have been a lot more than two who died.

There are of course a lot more who stopped posting for various reasons. But I think people who start to have financial difficulties tend to ask for advice here on this forum.

In contrast, people with health problems do not expect better help from forum fellows than from their doctors. They often just hinted of a problem, then faded away. I missed many of them.

 

[Unpaintedhuffhines]

I’m retiring on Friday of this week. Portfolio is down ~1.1M from the height, but my thinking is that this is the very best time to retire. I don’t need ALL of my money, just a little bit every month, and I am confident the market will recover long before I need the vast majority of my $.

 

[steelyman]

I’m retiring on Friday of this week. Portfolio is down ~1.1M from the height, but my thinking is that this is the very best time to retire. I don’t need ALL of my money, just a little bit every month, and I am confident the market will recover long before I need the vast majority of my $.

That’s good. I’m taking mine out the same way I put it in: very slowly.