Do We Have 10+ Year Retirees?

[CyclingInvestor]

Retired in 2006 at age 48.

Spending has drifted up (along with dividend income) over the years, more than double what it was, but I used to be a chronic underspender.

AA still at 100% individual dividend-growth stocks (since 1993).

 

[Rianne]

Experience matters, thanks RE

Great information. It's refreshing to hear the successes, even with downturns and unplanned spending. We are newbies in RE, 2014. Have not touched portfolio other than to get out of ST bond funds 12% of portfolio to laddered CD's. We still have LT and balanced VG + 8% in EE bonds (4% RR) and I bonds. The rest stock index VG. We reinvest all dividends. So, in general 55/40/5.

We squirreled enough after tax cash to offset DH consulting ($42K) which takes up < 20 hours/week. Interesting to see what 2018 tax hit will be. We stay within ACA MAGI and have a high deductible with HSA for HI.

DH taking advantage of U of I sporting events, tennis , basketball and football (Illini football ). Inexpensive pleasures. Plan to take SS at 64 or when DH tired of consulting from home. Should bring (combined) $35K + $12K pension kicks in at 65.

All calculators, I've used almost everyone suggested on this forum, give 100% at a much higher spending than we do. Since 2015 our total spending @ $62K. No mortgage, no car payments.

Long live FIRE!

 

[albundyz]

retired in 2007, age 56

Retired from Mega-corp, chose lump sum in late 2007, age 56. I waited and had to decide on what to do with lump sum. For 6 months, I waited and collected 5% interest on MM. Then, I decided to put 25% into s/p index fund. Market went down. Later, I put another 25% into same fund. Market went down, later I put 25% into same fund, market went down. I had enough cash to wait out the downturn. I never put in the remaining 25%, but was considering working at McDonalds (ha) when downturn stopped and reversed. Never changed spending habits. During the 5 yrs before my retirement, I had made some small mistakes with the stock market, but that experience benefitted me greatly as the recovery unraveled. I did not panic and fortunately, I did not put the lump sum into the s/p index fund immediately upon retirement......

 

[audreyh1]

I always want to pull back in a bad year. I totally understand the emotional tole a downturn can take on a retiree. I guess sometimes it might be better to spend somewhat less just to feel you are "doing something" about it.

That does seem like a natural reaction.

However, I have to say that it hasn’t happened to me. I’m sure because I always had at least an extra year’s worth of spending money set aside, plus we do bank unspent funds from the good years.

So when I see that our desired spending budget is covered for at least another year, I keep spending as planned regardless of market shenanigans. And a year later, at least so far, things have usually settled out enough that I’m OK with maintaining planned spending.

I expect after a few years drop at some point in the future I’ll have to face pulling back on discretionary spending. But I’m prepared for that and thus won’t worry about it until it actually happens.

 

[jkern]

Retired at 51 in June 2009 (officially laid off, but never went back to work).

Portfolio 6/09: $400k 403b (65/35) and $500k cash (CDs) Total = $900k

Severance and unemployment equivalent to 2 1/2 years of pay
Daughter just started college which cost me $40k over the next 4 years
Upgraded/remolded house over next 5 years which cost $175k
Bought 3 condo's during Real Estate crash for $290k
Was conservative budget wise for about 3 to 4 years just in case

Today:

Daughter is 27 and all taken care of
House is fully upgraded and awesome
Just replaced auto last July
Rentals are humming along

Portfolio: $925k IRA (40/40/20) and $50k cash Total = $975K

Value of 3 rental condo's: $775k

Total investments: $1.75M

Plan to start Social Security towards the end of the year (62)
SS and rental income will fully fund my Standard of Living ($60k/yr)
Might have around $950k to $1M in IRA as emergency reserve.

 

[jasg]

Not quite at the ten year mark, two months short but I have been thinking about the upcoming milestone.

A1. We have not had to cut spending.
A2. AA was 95/5 until late 2013, 70/30 until late 2016, 60/40 now but 15% of portfolio is in TIAA TREA as a hedge.

I got caught in a layoff a month after the market bottomed in March 2009 at age 60 and decided to retire. So in addition to the anniversary, I hit 70 and start RMDs this year.

I was a bit surprised when I rolled up our withdrawals since 2009 in my tracking spreadsheet. It shows:

• Total portfolio at FIRE was down 42% from end of 2007
• Taxable savings lasted through 2018
• Total withdrawals (including this year's RMDs) were two-thirds of the initial FIRE balance
• Current portfolio is twice the FIRE balance
• We are now following a Boglehead Three-fund strategy. TIAA Traditional (stable value @3.25%) is 25% of total and is counted as Bond
• Based on past spending, it looks like RMDs will cover expenses

 

[LARS]

Retired in 1995 at 38 years old. Still, going strong. No adjustments necessary so far...

 

[marko]

RE'd in late 2005.

We were newbies in direct investing on our own but in late 2008, by the time we thought of making changes it was March of 2009 and we were off to the races. I must thank DW for beating my head against the wall to knock the skittishness out of me at the time.

The Great Recession ("end of the world as we know it") was a great gift as it has given me considerably more guts to stay the course. We actually increased from 60/40 to 70/30 over the past decade despite that I'm heading into age 67.

Our spending didn't change during the recession and hasn't really changed in the past 13 years. When we first RE'd we were pretty careful but over time loosened the purse strings.

Our lifestyle vs a set budget pretty much keeps our spending within a certain limit; sort of a 'shepherd moon' approach. We live the way we want and it coincidentally falls within the SWR. We withdraw from only our banked dividends (and occasional cap gains) and haven't sold a single MF share since we RE'd.

 

[Offgrid Organic Farmer]

...
-At any point did you have to curb your spending?
-How did you adjust your portfolio during 2008-2012?

The massive layoffs of 2008 caused us to lose our last remaining apartment complex.

We were living on my pension when I retired in 2001, so by 2008, we were not using the apartment complex income. Losing it was an emotional hit, as we had to file bankruptcy.

But it did not really affect our monthly budget.

We still made more than we were spending.

From 2009 to 2014 we saved up enough, that in 2014 we bought another rental real estate, to start the process over again.

 

[Andre1969]

I always want to pull back in a bad year. I totally understand the emotional tole a downturn can take on a retiree. I guess sometimes it might be better to spend somewhat less just to feel you are "doing something" about it.

I think it's definitely a psychological thing. My investible assets went down by a pretty good chunk in September of last year, because I bought a house and put a pretty big down payment on it. Even though the market hadn't started to drop, yet, and technically I didn't "lose" money, simply shifted it from cash to home equity, it still bothered me, seeing my investible asset total drop by about 8.8%.

I noticed I started doing little things, like eating out less, not that I ate out a lot to begin with. And, it got worse in October, when the market truly started to drop. I also cut back a bit on driving wherever I could, and other minor extravagances. But, in the overall scheme of things, it really meant nothing. According to my spreadsheet, I "lost" $121,269 in value from my investible assets in October. My little cutbacks here and there might have managed to save at best, a couple hundred bucks. And in my case, I'm still w*rking, so it's not like I had to tap into investible assets, anyway.

But, psychologically, I guess, it still felt like I was doing something. Admittedly, it got a bit worse during the furlough. This time, even though the stock market, and my net worth, kept going up, I still felt the need to cut back on expenses wherever I could. And, with another shutdown looming, I just have this "we're not out of the woods yet" feeling.

 

[marko]

I always want to pull back in a bad year. I totally understand the emotional tole a downturn can take on a retiree. I guess sometimes it might be better to spend somewhat less just to feel you are "doing something" about it.

Seems we had a discussion a few years ago where it was shown that pulling back in slow times didn't make a really big difference over the course of one's RE.
I could be mistaken.

 

[Lsbcal]

Seems we had a discussion a few years ago where it was shown that pulling back in slow times didn't make a really big difference over the course of one's RE.
I could be mistaken.

You are probably right. We often revisit old thoughts. There is nothing like ruminating on the internet.

 

[NYEXPAT]

So far on this thread you are the winner.

Oh goody, hopefully, the prize is 32 more years?

 

[JOHNNIE36]

Retirement date was 5-1-88 at age 52. Threads like this interest me because I'm always amazed at the people that can retire because of the investments they made and maintain. In my case it was because I had a defined benefit pension with 34 years service. I could never had done it otherwise. Maybe threads like this should be labeled FIREWP (with pension), FIREWL (won lottery), FIREWI (with inheritance) etc. We would need a portfolio of about $1.5 million to maintain our lifestyle.

 

[Rianne]

Retirement date was 5-1-88 at age 52. Threads like this interest me because I'm always amazed at the people that can retire because of the investments they made and maintain. In my case it was because I had a defined benefit pension with 34 years service. I could never had done it otherwise. Maybe threads like this should be labeled FIREWP (with pension), FIREWL (won lottery), FIREWI (with inheritance). etc. We would need a portfolio of about $1.5 million to maintain our lifestyle.

Yes! So true. We're banking solely on investments + SS + small pension ($12K per year in 2022). I guess that was the initial question my post.

 

[razztazz]

In my case it was because I had a defined benefit pension with 34 years service. I could never had done it otherwise. .

Ah, not necessarily. I have a pension. But way back in the late 90's I did, I guess what you'd call a "backstudy" on the value of the pension. I calc'ed how much would I have had to earn and DCA into a reasonable mutual fund all those years to end up with a "phantom 401-k" worth about what the pension was worth. If the wages I wasn't paid all those years in lieu of the pension had been paid and matched, at what was then the national average employer match, for the 20 yrs I worked, the numbers were surprisingly close. Like within a few thousand bucks close. Pay me now or pay me later I guess.

Yes, this is all dependent on what years of human history you live your life and work and get paid etc etc.

 

[rk911]

Retirement date was 5-1-88 at age 52. Threads like this interest me because I'm always amazed at the people that can retire because of the investments they made and maintain. In my case it was because I had a defined benefit pension with 34 years service. I could never had done it otherwise. Maybe threads like this should be labeled FIREWP (with pension), FIREWL (won lottery), FIREWI (with inheritance) etc. We would need a portfolio of about $1.5 million to maintain our lifestyle.

no doubt that we are both lucky to have defined benefit pensions (37 yrs for me and 35 yrs for my wife). that and our SS finance our day-day living and funding several sinkng funds for future expenses.

my wife started us out on our investing without asking me. first i learned about it was when the first statement arrived in the mail. i was very nervous. my folks and grandparents had always preached that if the “5% savings account” was good enough for them it should be good enough for me. OTOH, my father and bro-in-law, especially the BIL, had been investing in mutual funds for quite some time. BIL convinced my wife to give it a go. once the ice was broken i saw the light and we’ve been investing for the last 38+ years. i give her all the credit for our FIRE status.

 

[harllee]

We retired in 2000, both of us age 50. From 2000-2008 we lived it up, traveled and spent a lot, AA was 60-40 had very little in cash. We were caught short of cash in the 2008 downtown, spent sleepless nights. We DID cut back on our spending for a while, quit traveling because we did not have enough cash but we did not sell any asses at the low point. We learned a lesson. Now we have a lot of cash (probably too much) but we sleep good at night. We are now at a 50/50 allocation but a chunk of the fixed part is in CDs and Money Markets. I never want to worry about cash like I did in 2008.

 

[Lsbcal]

We retired in 2000, both of us age 50. From 2000-2008 we lived it up, traveled and spent a lot, AA was 60-40 had very little in cash. We were caught short of cash in the 2008 downtown, spent sleepless nights. We DID cut back on our spending for a while, quit traveling because we did not have enough cash but we did not sell any asses at the low point. We learned a lesson. Now we have a lot of cash (probably too much) but we sleep good at night. We are now at a 50/50 allocation but a chunk of the fixed part is in CDs and Money Markets. I never want to worry about cash like I did in 2008.

Reminds me of our cash issues in 2008. We had the most money in retirement accounts and the withdrawals were to come from our non-retirement accounts. But those non-retirement accounts kind of disappeared by the end of 2010. Changed my tax planning for sure. Also TIPS became somewhat less then liquid in 2008 because large investors were unloading them to cover their even less liquid positions (the explanation I read at the time).

I took SS in 2012 which was very comforting . As it turned out our assets grew faster then if I had waited to age 70 to take SS. That was one fortunate thing for us about this long bull market.

So one lesson is to make sure you have enough in liquid assets which would include savings accounts (CD's) and Treasuries. At least make sure your tax picture won't be too strongly affected by the need to take IRA assets early.

 

[CardsFan]

We retired in 2000, both of us age 50. From 2000-2008 we lived it up, traveled and spent a lot, AA was 60-40 had very little in cash. We were caught short of cash in the 2008 downtown, spent sleepless nights. We DID cut back on our spending for a while, quit traveling because we did not have enough cash but we did not sell any asses at the low point. We learned a lesson. Now we have a lot of cash (probably too much) but we sleep good at night. We are now at a 50/50 allocation but a chunk of the fixed part is in CDs and Money Markets. I never want to worry about cash like I did in 2008.

Glad to hear you did not need to resort to the world's oldest profession .

Seriously, we were still working at the time, but that left me with the desire to have 2-3 years cash/CD on hand at all times. We were about 60/40 at the time, and the drop was a little unnerving.

 

[braumeister]

quit traveling because we did not have enough cash but we did not sell any asses at the low point.

Yeah, the market price really tanked there for a while. In fact, I haven't seen those prices in donkey's years.

 

[Original Wally]

I left on Pearl Harbor Day 2009. Portfolio is up 25% since. We do a fair amount of travel - 2 or so big trips a year. Business class or better when we fly. (Will spend 2 months in late spring / early summer in Europe - incl River Cruise). Otherwise we are fairly conservative financially - not a LOT of dinners out. Homebodies. We do as we please, no change to spending. Life is good.

 

[audreyh1]

I always want to pull back in a bad year. I totally understand the emotional tole a downturn can take on a retiree. I guess sometimes it might be better to spend somewhat less just to feel you are "doing something" about it.

I think it's definitely a psychological thing. My investible assets went down by a pretty good chunk in September of last year, because I bought a house and put a pretty big down payment on it. Even though the market hadn't started to drop, yet, and technically I didn't "lose" money, simply shifted it from cash to home equity, it still bothered me, seeing my investible asset total drop by about 8.8%.

I noticed I started doing little things, like eating out less, not that I ate out a lot to begin with. And, it got worse in October, when the market truly started to drop. I also cut back a bit on driving wherever I could, and other minor extravagances. But, in the overall scheme of things, it really meant nothing. According to my spreadsheet, I "lost" $121,269 in value from my investible assets in October. My little cutbacks here and there might have managed to save at best, a couple hundred bucks. And in my case, I'm still w*rking, so it's not like I had to tap into investible assets, anyway.

But, psychologically, I guess, it still felt like I was doing something. Admittedly, it got a bit worse during the furlough. This time, even though the stock market, and my net worth, kept going up, I still felt the need to cut back on expenses wherever I could. And, with another shutdown looming, I just have this "we're not out of the woods yet" feeling.

In 1999 in preparation for retirement, one of the things we did was build up an earmarked "travel slush fund" to cover extra travel for the first 2 or 3 years of retirement anticipating our pent up demand once free of working. We cleaned up a motley set of smaller assets we'd randomly accumulated over the years - some tech stocks bought a year or two earlier, a small piece of land, some stock bought in the company ESPP - and threw them into this fund.

As it turned out, the big 2000-2002 bear did not impact our travel spending at all because we had this nice fund there to use up. We didn't even consider it. So for us, as long as we have short-term funds available we don't modify spending based on market events and pretty much ignore them until it's time to rebalance.

By 2008/2009 we had morphed into a system where we kept a year or two of after-tax expenses in short-term funds available to draw on as needed. Again - we didn't modify spending in spite of having our net worth cut in half. Interestingly, we had lower spending in general at that time, but that spending drop had already been going on since we started seriously RVing in 2003.

 

[Oakster]

Does anybody leave their account 100 into mutual funds and use a buffer, such as a 3 year or 5 year cd ladder to counter market swings? It always seemed to me that if you had a significant amount of money in your nest egg, and 3-5 years of spending money in a cd ladder, it would be fairly easy and safe to leave that nest egg in high performing mutual funds, rather than blend it down in a conservative fashion?

 

[street]

^ that has been on a few discussions before. The majority say, that it would be a good move to invest 100% with a long term if other funds were there for them to live on.

I have some I really should do that too (100%) because I would have plenty in CD ladders to live on. I just haven't and don't know if I will.