My net worth has increased 74% since I retired 4 years ago

[ccjarider]

When I see a thread like this, I know a market downturn is coming. Time to rebalance...

Yeeeuuuup. When lame stream and social media start having lots of front page noise about wealth growth and how great things are, a downturn is close. Not a bad thing but no one should be surprised.

 

[jkern]

Retired 12 years ago at age 51. My NW has increased 220% since then.

 

[Digger1000]

Great news but this string would be even more insightful if folks provided their starting withdrawal rates.

I'm the opee. My average withdrawal rate the past 4 years has been 2.3% of my net worth on April 3,2017.

 

[Amethyst]

We've already taken husband's RMD for 2021. Might as well strike while the funds are high! Congratulations on your NW. We haven't done as well, but then again we've been spending like crazy on the house.

I retired April 3,2017 at age 51 and my net worth is 74% higher today than it was on my retirement date. Thats insane.

This post probably wont age well, we'll probably have a market crash soon. Thats ok. I can handle a 50-70% market pullback.

 

[Digger1000]

We've already taken husband's RMD for 2021. Might as well strike while the funds are high! Congratulations on your NW. We haven't done as well, but then again we've been spending like crazy on the house.

But you probably have a higher net worth than me.

 

[grasshopper]

I only kept track of our withdrawal rate for my first 10 years of retirement.

We were only spending about 70% of what we had back of the envelope budgeted.

3.60% 2008
3.30% 2009
3.30% 2010
3.30% 2011 Costa Rica 2 weeks
2.90% 2012
3.80% 2013 Alaska cruise and Denali
2.60% 2014 Cruise Hawaii 2 weeks
3.20% 2015 Cruise Sea of Cortez
4.20% 2016 Galapagos and Peru
3.50% 2017 Cruise Costa Rica Panama 2 weeks

3.37% AVERAGE

 

[Spanky]

I retired April 3,2017 at age 51 and my net worth is 74% higher today than it was on my retirement date. Thats insane.

This post probably wont age well, we'll probably have a market crash soon. Thats ok. I can handle a 50-70% market pullback.

Impressive. What's the AA?

 

[NW-Bound]

I retired 9 years ago, and my wife 14 years ago.

My stash is currently 2.01x its value back in 2012, when my earned income stopped.

While I have more money, our expenses shrunk over the years when the kids got out of college and flew the coop, such that our trailing 12-month expenses are just 2% of the stash value. That 2% of portfolio even includes a recently purchased new car paid in cash.

My WR is lower than 2%, because my wife has started her SS, while I am still delaying mine. And of course I do not buy a new car each year.

The car before this one was also purchased new in 2003. That car still only has around 30K miles on the odometer. I think I am done with buying cars in this life. Back to WR below 1%.

Who would have thunk the market god would be so generous. If he turns off the spigot, well I think I can survive.

Great news but this string would be even more insightful if folks provided their starting withdrawal rates.

Highly relevant point.

My WR was around 4% for the first few years of the 9 years of retirement, before tapering downward as expenses shrunk while the portfolio grew.

I just looked it up - very easy to do with Quicken. Over the course of 9 years, I have drawn a net 30% of the initial value of the stash. That's an average WR of 3.3% of initial portfolio.

The initial drawdown certainly depleted the portfolio more than the later withdrawals. The recent withdrawals decrease in dollar values, and are even less in terms of WR percentage.

Again, it's Bernicke's effect at work, plus SS kicking in.

Out of curiosity, I used Portfolio Visualizer to see how much a portfolio with 75% S&P and 25% cash (closest to my AA) would fare under two different conditions.

1) 0% WR: gain of 2.8X
2) 3.3% WR of initial value with no inflation adjustment: gain of 2.28X, which is more than my actual 2.01X.

 

[HenryD]

Just checked, my NW is up 1,001% since my divorce 7 years ago, but still w*rking, so not a fair comparison, I know.

1,405 days max until FIRE. Want to see another 57%.

AA
62% Stocks
16% Bonds
10% Home equity
9% Cash
3% Boat equity

 

[brett]

Our equity has grown substantially since retiring nine years or so ago.

We benefitted greatly from sequence of returns and low inflation. I would hate to think what would have happened if both those went against us as it were. Down to good fortune I guess.

We stay invested when the market tanks. In for the long term.

 

[SoReadyToRetire]

You guys are KILLING me!!! I retired one month before the 2020 crash.

So my SORR sucks. :-(

 

[CardsFan]

Unless you sold you should be ahead.

You guys are KILLING me!!! I retired one month before the 2020 crash.

So my SORR sucks. :-(

 

[Amethyst]

Who can say? But you retired a lot sooner than we did! So that (time) is worth untold amounts of $$.

But you probably have a higher net worth than me.

 

[smihaila]

OP, unless you really crystalize those gains, your net worth increase is purely theoretical i.e. only on paper .

 

[Mo Money]

Retired just over six years ago. Overall net worth up 71%. Portfolio and retirement plans (liquid net worth) up 83%. The party can't go on forever, but I am thankful.

 

[Digger1000]

OP, unless you really crystalize those gains, your net worth increase is purely theoretical i.e. only on paper .

Absolutely what I say all the time. It is paper thin. In my mind I always think of myself as having half of my net worth.

 

[nap470]

About 10 months into retirement so had about a 1/2 year of employment last year. Portfolio value has increased about $780K since my departure date at the end of June 2020.

Still adjusting AA but currently around 55/38/7. Would love to see the market continue a couple more years. That would make the last 2 years of college tuition less painful.

 

[Koolau]

OP, unless you really crystalize those gains, your net worth increase is purely theoretical i.e. only on paper .

If I understand what you are saying, that is true for all investments. Even if you cashed your entire paper "empire" and held it in US$, it's still a variable "nut." US$ have variable "value" vs "things" purchased (inflation, country of origin, etc.)

All of us probably need to think of our nest egg as a fluid amount. I guess the reason I keep my equities to 30+% is 1) I don't need more growth than that and 2) I have at least a better idea of what I have available to me - less uncertainty about day to day or year to year market value.

Not sure if you meant anything beyond the idea that our investments (of all kinds) are never truly fixed in value (as I mentioned, not even dollars - or your favorite money.) YMMV of course.

 

[HarveyS]

You guys are KILLING me!!! I retired one month before the 2020 crash.

But isn't the SP500 up 23% from 1/31/2020 until 3/31/2021?

 

[jollystomper]

At only 30+% in the market, my net worth has barely doubled in the 15 years since FIRE. Not too impressive, but I sleep like a baby and rarely check my balances (once a year, maybe.) Of course, I've gone through a bunch of money during that same period, so there's that. YMMV

+1
The year I retired I went from 60% to 40% in the market, and down to 35% a year later. In almost 3 years my cash+investments are up 15%. my non-cash investments are up 21%. While low percentages, it is still a large six figure gain. Hitting singles is working fine for us .

Our SWR was targeted for between 2-2.5% but has turned out to be closer to something over 1%. Our net cash outflow has been 20% of what we budgeted so far. So I "missed" my forecast but I can deal with it .

 

[RobbieB]

I got more than I started with, but not even 50%.

But I've been blowing at more than 5%.

No problem -

 

[NW-Bound]

OP, unless you really crystalize those gains, your net worth increase is purely theoretical i.e. only on paper .

Absolutely what I say all the time. It is paper thin. In my mind I always think of myself as having half of my net worth.

I remember that Alan Greenspan once said that the value of stocks was ethereal.

Just now, searched the Web for a reference, but found none. I remember that it was roughly in the same period when Greenspan talked about "irrational exuberance". And there's a lot of references on the Web about his "irrational exuberance" quote.

Oh well, the stock value to me is still more concrete than the value of Bitcoin, or NFT. It represents the physical and intellectual assets that a corporation owns, its production output, its reputation, and market share, etc... It's more real than fiat money to me, although it may go up/down a lot.

Of course, many stocks have their value based mostly on their promises, with not much in concrete. I stay away from those.

 

[nun]

I retired 7 years ago, although I still do some part-time consulting work and I put the max I can from that into a solo-401k. My AA has drifted to 80/20 and I can't be bothered to rebalance because I'm living off rent and a small pension so I'm sanguine about the risk. I've started to gift money to my heirs to keep the value of the estate at a reasonable level.

 

[FIREd]

My NW is up ~200% since I quit work ~11 years ago.

 

[flybynight]

I retired 18 months ago and my financial assets are +34%. I still cannot believe this. Started with a 75/25 AA but that has drifted to 82/18 with the markets performance. I cannot stomach rebalancing with the current bond market environment. Plus, 1) with the wife still working our withdrawal rate is at .7%, and 2) That 18% in cash/short term bond funds provides 6-10 years of living expenses. Since the wife likes her gig and plans to stay at it at least another 2-3 years, am I crazy to let it ride? Anyway, it's nice to have accrued a quick 34% cushion as SORR was one of my biggest worries in pulling the plug.