retiring - please hold my hand...

[steady saver]

Hello people. Yes we had finally made the decision for DH to retire a few weeks ago. He gave his notice, his job has been posted and it's a done deal. His last working day will be this summer.

Whew, Okay. We are okay. I keep telling myself we are okay. I figured that we could drop about 45% and still be okay. We have a high equities exposure...about 78%...ha, well it WAS about 78%. We were working towards moving to a 60/40 but we had NO losses to harvest for taxes so we'd planned to wait to see if anything went south this year and to then be more proactive about rebalancing next year when income was lower. Well the market is rebalancing for us.

On the one hand, I'm a buy and holder. I don't tend to panic and big part of me honestly feels ginger peachy. We have cash for 3-4 years so we're okay. And the yearly spend I've budgeted for is more than we've ever spent anyway.

In my heart I know this is how things go. The market goes up, the market goes down. I planned with padding in place. I need to keep my DH shored up b/c he's the one who feels less confident at times like this. I totally get that. That said, I come to you all to shore me up, ha. Because while we're going to be fine, it's just the worst time to have finally decided to retire.

I don't even think I'm asking for any advice. Just needed to lament out loud here and ask for a little hand holding.

Thanks.

 

[Dtail]

First of all, congrats on your DH retirement. It will be the best time of your life.
Next you will be fine. We retired 2.5 years ago and have now lost our gains, but still are 100%+ on retirement calculators.
If you can survive a 45% drop, you will be fine based on history.

 

[georgemoe]

Congratulations on DH. I'm in his boat. I just took an early retirement package at megacorp. I have less than two weeks left. DW is planning to retire in December at 65.6 and will take SS. We have enough cash for 3+ years so can ride it out a bit. I too share his concern but I'm confident is our US economy overall and we will get through this. As long as we have toilet paper.

 

[Mountain skier]

I am curious about your retirement numbers including expenses. There are many people here in the same boat as you- retiring soon and potentially nervous. I think if folks share #'s it would help enlighten us.

 

[ER Eddie]

If you've got enough cash for 3-4 years, you will be fine. You shouldn't even have to touch your principal, which is the main worry in these situations.

You might check out this thread for similar thoughts:
https://www.early-retirement.org/forums/f28/make-it-stop-102501.html

I retired 8 months ago, so I'm feeling a little trepidation, too. However, like you, I know I've got enough cash to tide me over for 3 or 4 years, by which time I assume the market will have recovered. If not, I have some other backups. Worst case scenario I have to withdraw 3% instead of 2%, which is hardly a disaster (and actually something I was consciously trying to get myself to do, prior to this downfall, unsuccessfully).

In the end, it will be a good learning experience. It'll give us some early schooling in how these market crashes play out and how it all works out well in the end. Getting there is the tricky part, but eventually, the market will recover, and we will look back and say, "Whew, everything is okay; I survived with minimal damage."

After that, we can feel confident and relaxed about the rest of retirement, knowing that although the market may go into a prolonged slump, we'll be okay. At this point, that is theory, but in a couple of years, it'll be personal experience.

 

[ER2B]

I retired in 2017 and DW is still retiring in May despite this huge drop. I told my wife to move it till this crisis is over but she's psyched up to quit already. We were 60/40. My guess is it's now 50/50. We have 10 years of cash and we'll be okay. I know it's overkill but helps us sleep at night. SS at FRA for wife and 70 for me in 6 years.

 

[steady saver]

Thanks. I just needed to hear from others in a similar boat. Sorry my response is delayed. I'm out of town helping parents and after I posted my dad started having post surgery problems.
But for now, thank you.

 

[pn3069]

The key is holding cash to tide you over for a few years - as long as you got that your AA really doesn't matter that much. Good luck.

 

[Finance Dave]

Sounds like you are just a bit afraid of the unknown. The one thing I would NOT do is sell your equities now. Hang in there...it will come back...it always has...just may take time.

 

[Scout]

Thanks. I just needed to hear from others in a similar boat. Sorry my response is delayed. I'm out of town helping parents and after I posted my dad started having post surgery problems.
But for now, thank you.

This is EXACTLY what you’ve planned and saved so diligently for all those years! Something tells me that when you ran firecalc you weren’t given a 60% success rate. You could have retired years ago in that case. You’re fine.

 

[RenoJay]

It sounds like you’d thought things through beforehand, so if you stick to the plan I think you’re fine. Best bet is probably to turn off the news.

In other news, though, I’m confused by so many peoples’ strong need to counter taxable gains with losses. Yeah, I understand wanting to lower a tax bill, but frankly, cap gains taxes are a first world problem....it means you’ve made money. In early Oct 2018 I recognized seven figures of long term gains, and had a hefty six figure cap gains tax bill to go with it. I didn’t love paying that bill, nor did I love missing much of the 2019 rally, but my research led me to believe stocks were entering silly town so I bit the bullet, paid my taxes, and now have plenty of dry powder for opportunities.

 

[Mdlerth]

Battle Fatigue

In another thread maybe a year ago somebody used the phrase "battle-tested risk tolerance". It was an apt descriptor, and moved me to note that my own risk tolerance had never been "battle-tested" before.

During earlier market routs I was employed, so not only was I not dependent on a portfolio but my meager 401k contributions bought a few extra shares during those dips. I could be 100% equities and pay no attention to volatility. If that's battle testing, then Disneyworld is Parris Island.

So as I was approaching retirement last year I decided I needed a whisker more insulation and reconfigured to 80/20.

I'm now in my third month of retirement, and the current insanity is sparking some more self-examination. I'm in no immediate danger, since I'll continue to draw my severance pay through December, and we have a few years worth of cash beyond that before we'd need to tap equities. There is still a cushion, although it's not quite so thick.

But the Panic of 2020 is as close to battle testing as I want to be. I can only imagine what my reaction would be if I were both still at 100% stocks and dependent on them to pay the grocery bill. After this craziness subsides (I still believe it will) my AA is going to ratchet down a bit further from equities.

 

[albireo13]

re-consider my end date due to market ??

Hi,
I am 64yo and have been planning to retire by June. I haven't given notice yet. My wife is still working and planning to go another 3 yrs.
My plan was to put off SS for 2 yrs to at least get to FRA.

Now, the market correction has me nervous.
…. Pull SS early?
… keep working a bit longer?

Firecalc has been giving me 100% before March.
My AA is currently at 60/40.

Intellectually, I feel we are still ok but .. makes me nervous.

Anyone else in the same boat?

Rob

 

[steady saver]

This is EXACTLY what you’ve planned and saved so diligently for all those years! Something tells me that when you ran firecalc you weren’t given a 60% success rate. You could have retired years ago in that case. You’re fine.

Yes, Scout, you're right. For me, I wouldn't even consider retirement unless Firecalc (and my own Fidelity number crunching) said we were past 100% with ample padding.

We've always had a high percentage invested in stocks but for the past 5-7 years we've also held onto cash. That's what helps me feel okay about things because I know it'll go down (and in this case, way down) and it'll go up. And this is a storm to ride out b/c there's no way I'd sell anything now.

As with many of you, we're very good at LBYM.

I just liked it better when I felt a bit flush. It was a new feeling for me. It's one of the reasons I continue using YNAB for budgeting. It helps me to know it's OKAY to spend money. It's almost as if I have a bit of that depression era thinking and I didn't live through the depression.

 

[steady saver]

Mdlerth, I hear you about Battle Fatigue. We'll be ratcheting our AA a bit too, but that's always been our plan. I'm all about sleeping soundly at night!! Having a high equities exposure was super easy for me when we weren't at the retirement stage yet. I figured we could always ride out and that we'd simply catch the sale on the battered market. I'm feeling nostalgic right now b/c I'd like to be buying something...

 

[travelover]

Hi,
I am 64yo and have been planning to retire by June. I haven't given notice yet. My wife is still working and planning to go another 3 yrs.
My plan was to put off SS for 2 yrs to at least get to FRA.

Now, the market correction has me nervous.
…. Pull SS early?
… keep working a bit longer?

Firecalc has been giving me 100% before March.
My AA is currently at 60/40.

Intellectually, I feel we are still ok but .. makes me nervous.

Anyone else in the same boat?

Rob

Respectfully, you should start your own thread. You'll get a better answer and the future replies in this thread won't be a mixture of replies to the original poster and you which get all jumbled up.