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Assets Depleting after Retired
Old 06-05-2017, 07:20 PM   #1
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Assets Depleting after Retired

Are you retired? I saw a friend whom retired 3-4 years ago. To my surprise, he told me that his assets actually INCREASED since he retired.

why? how? I don't believe it. Those was my initial thoughts. It turns out that he didn't touch his 401k and the market did well the last 3 years. He lived on pension and withdraw small amount from his saving...

Wow... is it really possible? too many people keep telling me that I will out live your money. if you are retired, please share your thoughts.

enuff
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Old 06-05-2017, 07:23 PM   #2
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I don't have a pension and am not yet collecting any government benefits but definitely have watched our net worth increase significantly over each of the first 3 years of retirement. I'm not concerned.... down years will come.
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Old 06-05-2017, 07:27 PM   #3
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Since we retired in 1999 - and this is compared to 12/31/99, a particularly high bar:

Our net worth has increased 75%. When you take into account inflation, our assets are 30% higher than when we retired in real terms (equivalent spending power).

We've been living off our assets for over 16 years. Two nasty bear markets. Paid lots of taxes.

After the nasty bear of 2008/2009, wasn't until early 2012 that we finally broke even again after inflation. So you can definitely go through some years when assets have shrunk in real terms.

So, yes, it's possible. I guess we're also spending less than our assets can theoretically support, but we aren't cutting any corners either!

Knock on wood, and I hope I didn't just jinx us!!!
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Old 06-05-2017, 07:30 PM   #4
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Quote:
Originally Posted by Enuff2Eat View Post
Are you retired? I saw a friend whom retired 3-4 years ago. To my surprise, he told me that his assets actually INCREASED since he retired.

why? how? I don't believe it. Those was my initial thoughts. It turns out that he didn't touch his 401k and the market did well the last 3 years. He lived on pension and withdraw small amount from his saving...

Wow... is it really possible? too many people keep telling me that I will out live your money. if you are retired, please share your thoughts.

enuff
Definitely possible if you continue to LBYM in retirement. In particular if you start your benchmark in 2009 for example. My financial assets have about doubled since 2009. So it is possible, about the only splurging is a new car every 5 years but I stay at the lower end.
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Old 06-05-2017, 07:31 PM   #5
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I don't have a pension and am not yet collecting any government benefits but definitely have watched our net worth increase significantly over each of the first 3 years of retirement. I'm not concerned.... down years will come.
+1

If you have a small WR, if the market goes up nicely... you will see assets grow. If the market goes down nicely... they don't grow. You really need to see what happens over 10 to 30 years.
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Old 06-05-2017, 07:35 PM   #6
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I've been retired for 3 years now and I have more dough than when I started.
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Old 06-05-2017, 07:37 PM   #7
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Retired 3 years ago this month. Thanks to market performance our portfolio is slightly higher than when we retired in nominal terms with an average WR of 5%. Our portfolio is our only source of income with no pension and only SS coming online in a couple of years.
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Old 06-05-2017, 07:41 PM   #8
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If you are drawing 4% or less, and the market is going up faster than that on average, your net worth will continue to grow.

If someone retired in 2012, 2013 was a very strong year, with 30% gain on the S&P500, and 2014 and 2016 were not bad either. Bonds also did well on average.

For us, since the atart of 2013, net worth has grown over 40%, and is still up 33% after inflation.
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Old 06-05-2017, 07:44 PM   #9
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Pretty simple math. If your investments go up 10%, and you only spend 4%, you're going to have more money. The challenges come when the market drops or barely goes up, and also when inflation causes you to spend more.


I'm ahead of what I retired with in 2011. It's been a nice run though. It may not be the same for the next 6 years.


Run FireCalc and look at all the different lines. If you're in good shape for retirement, most of the lines will show you finishing with more money than you started, at least for awhile. Not all of them though, and those are the ones we protect against, not knowing which line will be our path.
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Old 06-05-2017, 07:58 PM   #10
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I'm only retired 18 months so I don't know yet. No big Whee so far.
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Old 06-05-2017, 08:05 PM   #11
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Yup. Been living off 401k withdrawals for three and a half years now and the pots grown well.
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Old 06-05-2017, 08:14 PM   #12
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Originally Posted by RobbieB View Post
I've been retired for 3 years now and I have more dough than when I started.


Robbie, sounds like you are failing at your main goal, being to spend that dough! If you dont pick up the pace soon, you may have to consider taking them solar panels off line and let PG&E help lower your stash.
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Old 06-05-2017, 08:20 PM   #13
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My annual true up amount continues to drop. I'll be close to zero at true up.
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Old 06-05-2017, 08:22 PM   #14
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When you do things like FireCalc or most retirement planning tools, they default to a sub par market. Even if they don't, your eye tends to focus on the worst case scenario because you're trying to see if you've passed a threshold and can retire. But if you look at the average market scenario (at least in everyone I've looked at), you have way more at the end than at the start. So, seeing the nest egg growing while living off it makes a lot of sense.

As has been discussed here before, we're in a good market right now. My concern is sequence of events. If my retirement timing is anything like my stock market timing, I'm in big trouble. I'll let everyone know when I'm about to retire so they can pull out of the market.
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Old 06-05-2017, 09:31 PM   #15
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Quote:
Originally Posted by Enuff2Eat View Post
Are you retired? I saw a friend whom retired 3-4 years ago. To my surprise, he told me that his assets actually INCREASED since he retired.

why? how? I don't believe it. Those was my initial thoughts. It turns out that he didn't touch his 401k and the market did well the last 3 years. He lived on pension and withdraw small amount from his saving...

Wow... is it really possible? too many people keep telling me that I will out live your money. if you are retired, please share your thoughts.

enuff
True in my case, but no pension until recently and even then it is small. 6th year of retirement so 5 1/2 years of living expenses, plus additional spending on a garage (~$50k) plus a ~$35k truck and winter condo paid in cash and we have 120% of what we retired with.... pinch me!
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Old 06-05-2017, 09:49 PM   #16
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We have a pretty conservative AA so we have not had as huge of market gains as many here, but our house value increased, we had pension and hobby job income, we keep finding ways to lower our overhead, the kids are almost off the payroll and our investments didn't do too bad so our NW is up after 5 years as well.
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Old 06-05-2017, 10:14 PM   #17
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Our assets, our net worth, have grown after five years of retirement.

Not what we expected but you have to take the good with the bad. Now, the trick is to protect that growth from future downturns in the market.

And of course, spend.
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Old 06-05-2017, 11:26 PM   #18
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heh heh heh - yup assets have grown. Over all a good time in history. Plus I was a tad cheap in early years of ER.
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Old 06-06-2017, 04:28 AM   #19
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retirement is working well for me, financially. I buy/buy/buy and the cash keeps comin in!
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Old 06-06-2017, 05:01 AM   #20
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If you have a small WR, if the market goes up nicely... you will see assets grow. If the market goes down nicely... they don't grow. You really need to see what happens over 10 to 30 years.
+1. I have a modest pension and only need 2% WR or less after that. If my annual return is over 2% then my assets grow. I am thinking about more expensive travel.
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