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ER Class of 2008: Your thoughts?
Old 11-19-2008, 07:36 PM   #1
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ER Class of 2008: Your thoughts?

Let's hear from people ER Class of 2008. ie. those who ER'd (or left jobs to test the ER waters) in 2008. What are your thoughts on your current situation and your plans to deal with it?

I am just under 30% down on my portfolio which was 60/40 to start with at ER (May 1). Its now 53/47 and I'm slowly re-balancing with the aim to be re-balanced in 12 months.

We're concerned, but still sleeping well. We have travel and other plans through the spring of next year, and we are going to keep to them. We are a bit more frugal to keep withdrawals down, but not to the point of deprivation.

In order to repair the damage to our portfolios, we plan to go back to some sort of work mid-2009. This would allow us to reduce our withdrawals, or if the job is right, add to our portfolio. I've spent my entire career in one field, so I'm going to try something different - maybe a "green" career that everyone is talking about.

Having this forum of like minded souls is very helpful. Thanks to all who contribute.
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Old 11-19-2008, 08:13 PM   #2
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hi class of 2008, class of 2006 dropping in to say i might be dropping out by 2010. are diplomas returnable? not sure yet what i'm doing (surprise!). might just sell out completely and vagabond. might do teaching job local. might go back to corporate. decision pending.

reasons: losing 30-40% doesn't help any though not a deal breaker in itself. with such losses i'd have to at least downsize house & better yet downsize out of this expensive area, also neither a deal breaker. or get local job for a few years while remaining here to stop $ leak and give $s chance to grow. but having recently found father (after too many years' absense) alive and in pretty good shape for an 80 year old, that might be the deal breaker.

i can always vagabond a.d. (after dad). currently checking into job markets. still have no idea what i want to be when i grow up. if i can't find a job that i'd enjoy and one that i think would survive a (d word) deep recession job cut, i'll just sell out & take my diploma overseas. otherwise, i'd like a refund please.
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
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Old 11-19-2008, 08:47 PM   #3
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Originally Posted by walkinwood View Post
Let's hear from people ER Class of 2008. ie. those who ER'd (or left jobs to test the ER waters) in 2008. What are your thoughts on your current situation and your plans to deal with it?
FIREd since March. I just rebalanced, with a minor tweak coming in January as some additional funds become available. No changes to asset allocation:
Stocks/Bonds: 60/40
Stocks Domestic/Foreign: 70/30
Stocks Domestic Total Market/Small Value: 80/20
Bonds Treas/Corp/Inflation 25/25/50
It looks like we won't be getting that second home at the beach. Other than that, we're doing OK. Yield on the portfolio just about covers the annual income, so with a small cash reserve I shouldn't have to touch the principal for the next year.
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Old 11-19-2008, 09:49 PM   #4
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I don't have anything pithy to say yet, it's too soon to tell since I retired about Labor Day. As planned, the first year (or three) will cost more than I expect future years, partly because of health insurance premiums. I will probably have to average out a full year to get a better feel for how frugal I will be.

I had a mobility problem just before retiring and am now well enough to get out every day. I'm not too concerned about any extra expenses involved in getting out; the only extra expense I remember there was one taxi fare. I don't know which makes me happier, being retired or being able to walk a couple of miles.

All and all it's going very well and I'm not going to slit my wrists over the economy; I'm not even remotely thinking about going back to w*rk.

Just another happy camper, Cuppa.
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Old 11-19-2008, 09:51 PM   #5
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class of 2007 here.
i'm going to start a new thread in parallel with what you asked, only for 2007 FIREees.
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
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Old 11-20-2008, 04:06 AM   #6
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Greetings, I ER'd in 4/08 after 3 years of planning for it. The decision did not come easily but I believed it was the prudent thing to do knowing that time and good health are finite. My house modest, 1000 sq ft, paid off and very affordable. Fully remodeled in '06 in anticipation. Vehicles in good condition, paid off, at least 5 years life left. No debt. Portfolio totaled just barely over $1M on last day of work. My material demands are not high and I can live my life with feeling too limited on about $32K a year. It looked like smooth sailing ahead.

Before things turned bad, former employer offered 20 hours a week paid as hourly through June 09. I debated and took it. This reduced draw from $32 to $10 to $12K.

Present, I enjoying leaving work at noon, I enjoy flexing my time when I want. Stress from work dropped tremendously. Portfolio down to $800K+. Firecalc says I am still good. Markets are cliff jumping on a daily basis. I am finding it hard to take. I find comfort in having very close to 10 year cash/fixed asset cushion with no work, but no new vehicle budget in that worst case scenario either. 10 years takes me to age 62.

Worst financial times in my life were '79-82 but I was in the military, no investments, managed to save up downpayment for house and bought one in '82. Crash of '87, working full time, investments small at that time. 2000-2002 Recession, way more luck than skill, went mostly to cash in January 2000 and did not go back in until August 2003. Was working full-time then and missed all the anxiety.

The worsening economy is very worrisome but still sleeping and not obsessing too badly. I might have more P/T work in 2009 and I might not, and I might not be able to find much if the economy is bad. Health good. Concerned "ex" may not continue to fund daughters education due to what all this is doing to her, I want and have to help my daughter if necessary.

The increasing talk that this could be a Depression seems more plausible. I have dismissed the possibility of this ever happening again my whole life, however the potential seems to be there now or so I think.

I have run some scenarios through FIRECalc and I am thinking that maybe it would be prudent to move some moneys from equities to cash, maximizing cash and minimizing equities but still shooting for 100% probability of success. I realize this could be a mistake and odds are it would be. Of course it might be a mistake to stay the course as I am if this is going to be as bad as the 1930's. Whatever I decide it feels like I am gambling with my future.

The only areas of my life that I can make cutbacks too is going out to out which I do frequently and ditching my home phone. I suppose I could go cut trees to burn for heat but that is hard work from the time you start the saw to cleaning out the ashes. I am too old for that. I could take in a boarder but need to widen my driveway for that. Being six mile from the State U. makes that possible. We would need to be in a Depression for me to consider doing that.

I am enjoying semi FIRE. I really really really don't want to go back to work full time especialy at my old job.

I did not think I be tested this hard this fast. It is scarier for me then some, I have no living adult relatives, nobody to fall back on. However my whole life I have been a survivor. I still have an excellent work ethic and health. I am pretty sure I still have more assets than most of my neighbors and co-workers. Job loss for any of them spells a bigger immediate disaster than anything I am currently facing.

If I had planned on Retiring in Oct '08 and that was one of my options I would have seen this coming and probably not left my job. I believe it would have also scared me into ever trying any Semi-ER or ER until age 62. In the course of my life that might have been a sadder situation in the long run.

Ideally I would rather be focusing on decompressing, expanding hobbies, civic involvment as I have without this unexpected anxiety. So all I can do is a very truthful line from a not so good movie..... Adapt, Improvise, Overcome.
Never surrender what you really want for what you want right now.
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Old 11-20-2008, 09:54 AM   #7
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DH volunteered to ER in August, two years ahead of schedule, with a year's pay and benefits. Still glad he did it as we knew what we were going into, 401K was already moved into 80% money market (thank you little voice in my head when the Dow slipped near 13,000) and probably the job would have been cut in a few months without the buyout. I think it would be more stressful if he were still in that job than to be ER'd in a bad economy.

We are budgeted down to the penny for the next two years when the original ER plan will kick in, however.
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Old 11-20-2008, 10:45 AM   #8
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Originally Posted by Bestwifeever View Post
401K was already moved into 80% money market (thank you little voice in my head when the Dow slipped near 13,000)
Wow, your user name is certainly appropriate.
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Old 11-20-2008, 11:01 AM   #9
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A lot of gloom and doom lately.

I quit in July at 39

It could be worse all this bad stuff could be happening and I could still be working...

I had a bad dream last night I was at my old job and we were trying to make a forging that was impossible to make:confused:

I woke up and got some coffee and watched the market hit new lows

I think Im just gonna turn off the damn TV and computer and remind myself how good I have it

There's gotta be something better to do than worrying about things...
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Old 11-20-2008, 03:18 PM   #10
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Before I FIRE'd in May I planned for retireing into a down market...set up at least 5 years worth of laddered CD's to tide me over and let the market rebound. Planned my portfolio and budget on the crappy market conditions of the early 1970's...figured the market wouldn't start to rebound until Q2 2009. So far things look about like what I planned for soooo NO WORRIES!
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Old 11-20-2008, 06:00 PM   #11
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I FIREd Jan 1st, 2008, and DH followed Mar, 2008. I'm glad all this financial bad news happened after we retired! I bet we would have been too chicken to retire if the portfolio looked like it does now... We have living expenses for the next six years safely set aside in CDs, Bonds, and cash, and we won't be tapping into the 401(k) and 403(b) until 2016. If the market doesn't look like it will turn around by then, I guess we'll have to refigure things. But, we are very lucky to have paid-for retiree health coverage and we will have four small pensions to look forward to in several years.
I used to love watching our investments grow, and I'd check out the totals on all our investments obsessively. I'd put everything in a spreadsheet and make pretty graphs and all. But now--I dutifully enter the quarterly account totals into my spreadsheet as I get them, and that is it! I don't like watching our net worth go down, so I just kind of ignore it. But I know that I ended up with as much money as I have now precisely because I did nothing with my 403(b) and 401(k) (other than putting in money every month) for 20 years. Gotta love those index funds!
Retirement is so sweet-- I will never regret retiring at 52! This has been one terrific year, and DH and I will gladly live as frugally as needed so we can keep on doing exactly as we please...
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Old 11-20-2008, 06:03 PM   #12
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Retired in July. Watching. Waiting to rebalance in January. Set up several years in cash and s/term bonds, so don't need to touch equities for quite a while yet.

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Old 11-20-2008, 10:01 PM   #13
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Retired 3/08. It is painful to watch the portfolio dissolve so quickly, although I am fortunate that I don't need to make any withdrawals for a few more years. I am hoping it will bounce back by then ... about 5 years. It gets increasingly more difficult to remain positive and not let the fear set in, but I keep talking to myself about silver linings and rainbows...
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Old 11-21-2008, 09:19 AM   #14
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I semi retired in 2007 and totally retired in 2008 . While I love retirement this market has made me crazy . I had a lot of padding in my budget which has helped make the down turn more palatable . What I have learned from this market is do not retire with just your basics covered or you may be back at work .Do I regret that I retired ? Not for one second I was ready to call it quits.
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Old 11-21-2008, 01:12 PM   #15
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Retired in March 2, 2008,. The only reason I would like to be working is to have cash to be buying right now. I have 08 and 09 covered without touching deferred comp funds. Then it might get interesting. Had one of the trips of my life this year, one I wanted to do for 40 years, wouldn't give that up for anything.
If I have to I will go back to work but for now things look good in retirement. Time is more important than money.
Financial assets are down 18% Jan 1 to Oct 31. Good thing we have pensions that cover most of our expenses. Wifes IRA is in Wellesley and my main fund is a target retirement type fund (TSP 2020). House value is down too but as anything we would want to buy is also down I figure we break even on that.
I told DW that we could retire and if the market goes well we go to Tahiti and if not then its Tijuana; so it looks like more Mexico than more exotic places for us. Also have a small travel trailer, just got back from a week with older son and our grandchildren. Doesn't get much better.
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Old 11-21-2008, 06:02 PM   #16
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I semi retired in July and the plan was DH would follow some time soon.

However with the recent market gyrations we are confused as ever as to what to do. Biggest issue for us, is the majority of our retirement funds were intended to come from dividends. However, until we can be sure there are not going to be dividend cuts in the near future, my feeling is we need to keep generating income from other sources.

So at the current time our intention is DH will continue with his full time position and I will do some temp work next year, something I was hoping to avoid. Add in the possibility of DH losing his current position and really we are totally unsure as to what is going to happen in the next year or so.

I be a girl, he's a boy. Think I maybe FIRED since July 08. Mid 40s, no kidlets. Actually am totally clueless as to what is going on with DH.
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Old 11-23-2008, 09:03 PM   #17
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FIREd Oct 31. Some thought I was nuts, other asked how I arranged my finances to be able to do so during such rough economic times. My taxable accounts are 80% in MMF, short term bonds and intermediate term bonds. The plan was to draw this down until I hit 59.5 (I'm 54) because I didn't want to mess with SEPP. It's too early to tell how my actual expenditures are going to compare to expected, but it looks like I could lose half of the value of the stock funds and still make it to 59.5 without having to SEPP because I was way conservative in my calculations.

The retirement accounts contain another 6-7 years of living expenses in bond funds, so I'm hoping I can ride out this bear market. My calculations have not included anything from social security, so if that materializes I think I'm home free.

Yes, I'm financially conservative and actually acted upon the advice that any any money I needed within 10 years had better be in bonds ---- and I can't begin to tell you how relieved I am that I did so.
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Old 11-24-2008, 12:43 AM   #18
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FIREd last month at 48. Pulled out of port despite the severe weather warnings. So far seaworthiness of the portfolio seems OK, but the we're still getting our sea legs. Started 55% stocks / 45% bonds, now we're the reverse. We are down 22% YTD. Will rebalance in January. Portfolio generates about 3.5% in dividends/interest most of which is tax free, which we redirect to MM fund. It's a little more cash than we need for expenses, but excess will be redeployed at rebalance time. Portfolio income stream has remained remarkably constant in $$ amount, even though NAVs and share prices are all over the map. I do expect stock dividends to dip by some (10-20%) in Q4, since a large fraction of dividend stocks are financials, and some are suspending or reducing.

I am considering rebalancing with a bias towards dividend paying stocks (via something like VEIRX). I think the dividend component can act as sort of a low-pass filter on some of the share price volitility, and I'm more interested in income stability than appreciation at this point anyway.
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