Has the downturn stopped anyone from ER

Charlie!

You're the one we lost that I've missed most of all.

A real veteran investor...keep posting!
 
Rustic23 said:
... If their retirement is so contingent on the market that even this won't work, then seems like they really should not be retiring this year even if the market recovers completely.
Click to expand...
BINGO.
IMO if your plan is so tight that there is no wiggle room, then in a down market you will panic and potentially do something devastating (like DMT and miss on one end or the other).
Your plan should, as most advocate here, but it seem either don't implement or have forgotten it, is in the plan (or mayber you're just wanting to wring your hands over ? :rolleyes:), be able to handle a down market. Remember when you do FIRECALC it takes into consideration down market periods. It seems that the people who are comfortable (or as much as they can be with potentially 6 figure losses) are the ones who have a 'bucket' for the 1st x number of years expenses. I have that in place and am ok with my, now 6 month old, retirement.
If I was not retired yet, I would have no problem with pulling the rip cord, given my plan. I have enough wiggle room and contingent plans so that I can sleep at night.
btw, this forum allows one to think, vent, ...etc. and that helps too.
Thanks everyone!
 
No but just today I told DW that can't have a new car because I need the cash to invest while the market is down.

She has a 12 year old mini-van with 170k miles and a big dent in the side. Should last another couple of years and if it breaks down in the middle of the free-way, well that's what cell phones are for. Right ;)

MB
 
I'll chime in and say I'm still moving forward with my plan to retire this spring. I've lost some $ in the last few weeks, but bucket #1 is still as full as it needs to be.

As a matter of fact, I drafted the retirement memo this afternoon to deliver to my boss at the end of next week. Just waiting for some details for HR, but as far as I'm concerned I will w*ork no more!

Rita
 
D*mn the torpedoes and full speed ahead!

I retired January 1st, DH is due to pull the plug at the end of Feb.2008. We never even though about not retiring. (well...maybe only a teensy bit) Like others have said, if you feel you have to put off RE because of a market downturn, then you REALLY should put off RE.
Now how do I explain it to the in-laws? Because of the current financial mess, they are sure the end of civilization is near and will flip out when they hear that both of us are stopping w*rk...
 
None of my nest egg is in the stock market...
so even though the DOW futures are down almost 600 as I type...
I will be sleeping late tomorrow.
 
Gotadimple said:
I'll chime in and say I'm still moving forward with my plan to retire this spring. I've lost some $ in the last few weeks, but bucket #1 is still as full as it needs to be.

As a matter of fact, I drafted the retirement memo this afternoon to deliver to my boss at the end of next week. Just waiting for some details for HR, but as far as I'm concerned I will w*ork no more!

Rita
Click to expand...

Gotadimple,

Congratulations on your ER. I'll bet you can hardly wait. It's a good thing you have a bucket #1 and are not fully invested. Without diversification your plans may have been derailed. Your foresight will now enable you to enjoy life to the fullest and without worry.
 
The key to all of surviving down markets for me is finding a asset allocation that I can live with and not freak out when the inevitable down market hits. I'm about 30-35% in equities and don't vary this much even in up markets. Yeah, sure I give up gains while the market is rising but at the same time I'm not suicidal when the market is tanking like it is now. And don't get me wrong, I also get down when the market is tanking and ask myself "why didn't I lighten up on equities?". I'm amazed that people here can ER with 90-100% of their assents in the market...I don't have the guts to do that....yeah, no guts, no glory. But the only way I could do that is if I knew that even if I lost half of my investments I could still comfortably live on whats left. If I lost 50% of what I currently have, ER for me would be out of the question. So for me it comes down to whether I can live with a lower return but guarantee myself ER.
 
DallasGuy said:
The key to all of surviving down markets for me is finding a asset allocation that I can live with and not freak out when the inevitable down market hits. I'm about 30-35% in equities and don't vary this much even in up markets. Yeah, sure I give up gains while the market is rising but at the same time I'm not suicidal when the market is tanking like it is now. And don't get me wrong, I also get down when the market is tanking and ask myself "why didn't I lighten up on equities?". I'm amazed that people here can ER with 90-100% of their assents in the market...I don't have the guts to do that....yeah, no guts, no glory. But the only way I could do that is if I knew that even if I lost half of my investments I could still comfortably live on whats left. If I lost 50% of what I currently have, ER for me would be out of the question. So for me it comes down to whether I can live with a lower return but guarantee myself ER.
Click to expand...

The Dow is down only 120 points today so far. No problems! :D It's just another day.

I agree with your philosophy, and I plan to ER with no more than 45% equities, maybe less.
 
Last edited:
I'll add my 2 cents.

My DW is still on for her retirement the end of this month. I have a few contract jobs that I have to finish (ends in June) and then I'll be all out as well.

FireCalc says I have 100% success rate and that includes going through the depression so I see no reason to hold off retirement. I don't think it will get worse than the "big one". I also have run my plan on the fidelity retirement planner (more conservative than FireCalc) and with a few tweeks it also says 100%.

I have a 10 year CD "bucket" so once I've finished DCAing into the market I plan on looking at my AA once a year.

Bogle was on CNBC today and he said who cares what the market is doing TODAY. The market is always on an uptrend - it just depends on your viewing scale.
 
Last edited:
About the only concrete reason someone well-prepared might postpone retirement until after a recession has resolved that I can think of is if you are cutting it close with your SWR.

Retire mid-recession at 4% SWR (or whatever your SWR) of $800k gives you $32k a year to live on. Or wait a year or two, contribute a little more, and retire on 4% of a recovered nest egg of $1mm, or $40K and change per year, for a 25% "raise."

Of course, you have to find your current situation tolerable. Or, you might have enough cushion to not care. But that's a situation I would pay attention to given that scenario.

If you've already retired it's quite different.
 
DallasGuy said:
I'm amazed that people here can ER with 90-100% of their assents in the market...I don't have the guts to do that....yeah, no guts, no glory. But the only way I could do that is if I knew that even if I lost half of my investments I could still comfortably live on whats left. If I lost 50% of what I currently have, ER for me would be out of the question. So for me it comes down to whether I can live with a lower return but guarantee myself ER.
Click to expand...


I retired with my equity portion at 85% .I have trimmed it down to 75% . If I lost a good chunk as I did in previous downmarkets I could survive .I also have a paid for expensive house that I could downsize . So sure I worry but the media could drive you nuts .
 
As I'm already retired, the question is moot for me, but I always viewed going into retirement as akin to stepping onto a moving escalator. You have to make your plan and then take that big step. If you've done adequate planning/saving and have covered as many contingencies as possible to make you feel comfortable about your decision, you gotta make up your mind and step on the walkway to retirement. Otherwise, you can always find some reason or other to delay the decision..."one more year", "one more bonus", "waiting for the market to rebound," whatever. Bottom line: we should all be planning for a retirement that lasts decades, and during those decades we'll all face up and down markets and other challenges. It's part of life...no regrets...and "woulda, coulda, shoulda" doesn't change it.
 
I'm a little shaken but going ahead. I spent 6% last year, which I know is unsustainable, so the downturn focusses me on controlling my expenses this year. I've got 2 years in cash and 3+ years in bonds, so the downturn doesn't have much concrete effect on my finances right now.
 
Thanks for the sanity check!

charlie said:
IMHO, this is an ideal time for a retiree with a wad of cash to start DCA
into his/her desired AA. I would not plunge as the knife is still falling,
but I would get fully invested over the next 18 months.
Click to expand...

As always the wise ol' seers on this board are making me feel better. Wasn't real comfortable with the market direction since I'm hoping to leave MegaTech in probably May. (Haven't said anything yet, and the date isn't totally firm.)

Comments in this thread remind me that:
1) With the wife's salary/government pension (she thinks she may want to work into 2009) + cash in hand, we're good for probably 4 years.
2) MegaTech stock/stock options (which will undoubtly go down, though this is large cap/growth) should be good for another 4-5 years.
3) Therefore 401K (which is down a good 10% from 2007 highs) won't be touched for ~ 8 years. Doubles?
4) I'll take the cash option on my pension (per charlies' excellent thought) and DCA into a down market! Big win!

Anyway, that's today's plan ... :)

t.r.
 
Impact on ER

I have planned on retiring in 2009 at the age of 55. The only income that I will have is the return on my investments and my DW social security (she has a medical disability). So my challenges are health care and making sure I don't exceed a SWR. Which I think is doable. For health care, I'll will use cobra for 18 months and then enter the state's high risk pool with a hefty deductible. My wife has qualified for medicare.

However, if I was planning on retiring tomorrow -- I would delay it for a while. When I do ER next year, I plan do nothing for 6 months and if I need to, pick up a part-time job (2 days a week) that would bring in ~25K and maybe help with health benefits. I don't have a crystal ball, but I'm extremely concerned about the economy for the reasons others have mentioned.

We downsized this last year -- selling the house and moving to a lower priced condo. We have no debt and have budgeted $50K a year for living expenses once I do call it quits. Fortunately, I really like my job, so if I have to work a few additional years it wouldn't be all that terrible.

dwk
 
My plans are to ER in 3.95 years. I would just as soon go through the bottom of the biz cycle now. It will hopefully be on an upswing or at least on the mend when I ER.

I am not sure about a recession (though it is looking likely). But it is looking like we may be headed for a bear market. I think a bear market is approximately 20% drop during so many months (6 or longer). The S&P 500 peaked at 1565 on Oct 9, 2007. It closed at 1310 on Jan 22, 2008. 1310 is a 255 point drop over 3 months. It is about 15% drop from the peak. To look at it another way, from 1310 the S&P 500 will have to gain almost 20% to get to its former high. The last time the S&P saw the 1300 level was in Sept 2006. So the 20% gain over the last year and a quarter is gone.

I suspect that could easily see another 5% to 10% drop. Hopefully it will recover quickly. I would hate to see the market go sideways for 5 years.
 
We had planned to retire on March 31st but must push it back because we have options that have to be exercised within 90 days of retirement. They were worth $240K 6 month ago and only 40K now because the stock has dropped from $94 to $60. That's too much money to leave on the table. We should have been exercising them all along but were afraid of the AMT. Oh well, 2 more years at the most.

kbst
 
You must log in or register to reply here.

Similar threads

M
ER tax accuracy
Replies
9
Views
517
karen1972
K
F
Traumatic events were my blessing
Replies
15
Views
600
Koolau
Koolau
F
7 years FIRE'd
2
Replies
44
Views
6K
cyber888
C
2
Reducing stock exposure in Retirement, age 60+
4 5 6
Replies
144
Views
8K
Onda
O
F
Anyone use hypnosis as a treatment?
Replies
16
Views
548
GenXguy
G

Latest posts

Back
Top Bottom