What to do...

[blueskyk]

Lots of good advice given here.

There is almost always a huge gap between knowing something in theory and experiencing it (examples abound). When it comes to the market and investments, I never found a lot of fear and worry in the theory. I did find it in the experience. I began investing in 1982 and rode all the downturns out based on wise counsel, only nipping and tucking a bit if necessary. It worked out well.

It's a skill that grows with practice but no one, including myself, really wants the practice

[mrfeh]

Quote:

Originally Posted by Montecfo Stay the course

+1

In the years ahead, this will be a blip in the rear mirror.

[travelover]

Stop thinking in terms of "lost". Just stay the course and if you have enough to live on, quit worrying about it. It will come back and the only ones that will have "lost" will be those that panic sold.

[jebmke]

Quote:

Originally Posted by CindyBlue Ok, I have to breathe...I can do this...I can... I did it in 2008, just put away the statements. But I was contributing then, something every month (a lot for what I was earning - we've always lived simply), so I figured it would go up eventually. Now that I'm not contributing, I was worried that it would just go down to nothing and I wouldn't have anything left, much less recover anything. I'm not withdrawing anything to live on yet, planned to do that at 72 1/2 (or whatever age it is now.) I'm going to put away the statements and try to forget about them for a few months...

I retired at the end of December, 2007. You know what happened right after that, of course. Since you planned to wait for quite some time to withdraw anything, chances are good that things will recover along the way. It would be good if you could tell everyone what fund(s) you are invested in. The answers might be more specific if that information was known.

[CindyBlue]

Quote:

Originally Posted by LOL! You haven't stated what you are invested in, but it reads like a simple Target Retirement or LifeStrategy style portfolio. I doubt you have lost more than 10% to 15% of your portfolio and perhaps even less. I believe that because I always look at various asset allocations to see how they have performed. Portfolios routinely lose 10% to 15% of their value every 3 to 5 years or more often. Perhaps you are not used to this, but it has been happening over the past 40+ years that you wrote about that you have been saving. It is going to happen over the next 40+ years, too, whether you live that long or not. So, now that you know this is more or less normal and that you have been used to it without even realizing it, please step back and go enjoy yourself and stop looking at your Vanguard assets.

You are correct, it's about down about 11.4% from February. It just looks so bad on paper...sigh...

You gave me a lot of relief when I read your words here, that it's "normal" to go down that much. It's amazing, that if it loses that much every 3-5 years, how it ever increases (wry smile!)

I am pretty sure I won't need the money until I'm at RMD age, and also hoping that, at that time, it's all still there. I can make it until then, I hope!

Thank you for your calming words!

[CindyBlue]

Quote:

Originally Posted by jebmke I retired at the end of December, 2007. You know what happened right after that, of course. Since you planned to wait for quite some time to withdraw anything, chances are good that things will recover along the way. It would be good if you could tell everyone what fund(s) you are invested in. The answers might be more specific if that information was known.

I'm not sure I know. I signed up for Vanguard and the strategy there that supposedly decreases risk the last few years until I am 67. I'll try to look it up.

I know I should know more, and it's rather embarrassing not to know when I'm posting here but the reality is I don't know much. I got onto the safest thing I could find all those years ago (Vanguard) and let it take care of itself all these years.

[CindyBlue]

Quote:

Originally Posted by blueskyk Lots of good advice given here. There is almost always a huge gap between knowing something in theory and experiencing it (examples abound). When it comes to the market and investments, I never found a lot of fear and worry in the theory. I did find it in the experience. I began investing in 1982 and rode all the downturns out based on wise counsel, only nipping and tucking a bit if necessary. It worked out well. It's a skill that grows with practice but no one, including myself, really wants the practice

Wow, that is so true... "I never found a lot of fear and worry in the theory. I did find it in the experience." Sure resonates with me today

[DrRoy]

You have plenty of cash. Wait it out.

[Retired Expat]

Quote:

Originally Posted by CindyBlue I don't know what I'd do without you people here. I have enough cash to get me through three years or more of expenses, if we don't get sick and so all of a sudden have a lot of expenses. In a year I'll be on Social Security. Looking at the Vanguard statement they sent yesterday just shocked the hell out of me...I lost two years worth of living expenses in two months. I just don't want it to go down to nothing (can it)

In January I made an offer on a house. Was all going to be money made in the market in the last year or two. Fast forward a couple of months and that money is gone! So I lost a whole house worth of money! Fortunately the deal fell through or I would be sitting on 2 houses right now....

At the beginning of this when there were many saying it will pass with Spring or in a month I pulled 15% out of equities while down only 10% from their crazy peak.. Can live 10 years on that at the current lockdown spend level or 3-4 years at normal spending.. Really seeing how much was going to dining, travel, entertainment etc in the “Before times”. The rest will ride it out and I don’t look at my portfolio anymore!

Fortunately am diversified into things that also generate income and are not just US based so besides the added Cash on Hand have income that at the moment is not stock market related. Of course if the entire economy tanks and everyone is out of work that income stream will likely dry up into a trickle....

[racy]

"Two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. ... We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." -- Warren Buffett, Berkshire Hathaway.

If it works for this guy, it might be worth trying.

[Gary 1958]

Quote:

Originally Posted by CindyBlue I don't know what I'd do without you people here. I have enough cash to get me through three years or more of expenses, if we don't get sick and so all of a sudden have a lot of expenses. In a year I'll be on Social Security. Looking at the Vanguard statement they sent yesterday just shocked the hell out of me...I lost two years worth of living expenses in two months. I just don't want it to go down to nothing (can it)

I'm in the same boat as you but haven't quit my job. In February I was starting the paper work to move my 410k to and IRA. The plan was to stop working on June 1st. Things have really changed and I'm holding steady with my 401k until things stabilize a bit.

I will be 62 in August. Before the virus I wasn't going to start taking SS until full retirement age of 66.8. I have 2-3 years worth of cash so I'm now looking to retire in August and turn on my SS and fill in the gaps with my cash savings. This will save me from having to touch my retirement accounts. I'm hoping things will have sorted themselves out in two years and at that time I can start withdrawing money from retirement accounts.

The one good thing about this, if there is one. I was always wondering when the long bull market would end. I now no longer have to worry about that. Now it's how long will the bear market last?

[CindyBlue]

Quote:

Originally Posted by Gary 1958 I'm in the same boat as you but haven't quit my job.

Are you still going to Fire? Or keep wo**king for awhile longer?

[Gary 1958]

I haven't been on the Fire site for a few months. My numbers there were always extremely good before this recent curve.

I plan to work a few more months. Everyday we seem to get a new round of hurdles to manage.

I'm alone with no bills so I can live relatively cheap if I need to but that isn't the retirement I saved for.

The manual I received on how to live a happy life seems to be missing several of the key chapters.

[RobLJ]

If you've got enough cash for 3 years, you've done fine to prepare (except maybe psychologically)

Quote:

Originally Posted by CindyBlue I don't know what I'd do without you people here. I have enough cash to get me through three years or more of expenses, if we don't get sick and so all of a sudden have a lot of expenses. In a year I'll be on Social Security. Looking at the Vanguard statement they sent yesterday just shocked the hell out of me...I lost two years worth of living expenses in two months. I just don't want it to go down to nothing (can it)

[targatom2019]

Quote:

Originally Posted by CindyBlue Wow, that is so true... "I never found a lot of fear and worry in the theory. I did find it in the experience." Sure resonates with me today

Still try to find out what funds you have at vanguard and your asset allocation. I bet they got you in a target date fund which is perfect.

[easysurfer]

Stay the course and wait it out. Since all this commotion started, I've only look at my balances once. That was to do my usual tallying for the end of 1st Quarter. Have not plans to look until end of 2nd quarter. No rebalancing fo me until 2021 .

[UnrealizedPotential]

Quote:

Originally Posted by CindyBlue Fine...I retire and the market crashes...sigh... I saved diligently for 40+ years. I had enough to retire. I have most everything in a 403b at Vanguard. I've lost a lot the past two months. Any advice as to what I could do at Vanguard to not lose any more, considering that I don't really know what I'm doing? Should I just wait it out? Can/should I tell them to move the money to a more conservative place, and if so, how do I do that?

Hi CindyBlue,

I have no advice to offer you, but I will write how I approached retirement and my AA. First off, I put over 40% in a global bond fund. It lost half of what the market did in this bear market, but has bounced back very well. The other thing I did was limit my risk in my t-ira. for my t-ira I have half in the SP500 and half in a balanced fund.

That right there takes some fear out of investing while still giving me some income and growth. The rest I put in stocks, but really it only comes out to a little over 50% stocks. I get my income from this and I know I am not going to get absolutely killed like I did in the 2008/2009 downturn. That was bad. So when I retired in 2016 I made sure that couldn't happen to me again.

I hope that helps.

[jeroly]

Quote:

Originally Posted by CindyBlue Thanks for replying...I don't really have an "investment polity." And I don't understand the language very well, sorry. I am on a "path" at Vanguard that moves my money to be more conservative as I get closer to retirement, which they put at age 67 (I'm 65) Last year, I called and asked them to move it to the next year, i.e., more conservatively, and they did. I have been to one financial adviser, and he said I was on the right track. If my money is in a 403b, and I'm not contributing to it anymore, does that mean that my losses are final, even when - if! - the market begins to climb back up again?

Based on this, I would hypothesize that you are in a target date fund, possibly the 2020 fund which is about 50% stocks, 50% bonds.

If your March statement was showing you down 2 years of spending, and its year-to-date performance was down 11%, as of March 31st, then you had something around 18-20 years worth of spending in it.

So, you now have something like 16-18 years worth of spending in it (the market has recovered a bit from its end of March lows). You say that you don't need to touch it for another seven years, so overall you've got 23-25 years worth of expenses in financial assets.

Now, in the entire history of US markets, only once or twice has that level of savings and spending (taking bumps up annually to keep up with inflation) ever led to a retiree running out of money in thirty years. So unless your family is particularly long lived you should be fine even leaving your social security payments out of the picture entirely.

If you were managing this nest egg by yourself, what you would probably want to do is to rebalance your stocks and bonds to return to your desired asset allocation. However, if you do in fact have these $$$'s in a Vanguard target date fund, Vanguard does this for you automatically, and also manages a 'glide path' that makes the allocation more conservative as you age. So there's really nothing to do! Remember, you have a very large cushion relative to the 4% or so you'll start taking out in a few years, so even if you were already making withdrawals, you'd have loads of time for the market to recover!

[jasg]

Staying the course worked for me.

I retired a month after the market bottomed in March 2009 - 95% stocks.

I lived of cash & taxable savings and I did nothing with my 403b for the first 5 years. Over the next 5 years I moved it to 50% stocks.

Now, even after two years of RMDs from the 403b it still has tripled since the bottom in 2009.

[Gearhead Jim]

I've always stayed the course before, and was glad.
But this time we are in our mid-70's and wondering how old we will be when our January 40% equity allocation gets back to what it was.

We have enough cash/CDs/bonds/pension/SS to last us 10+ years unless inflation goes completely berserk, but still...

Of course, if we die from C-19 or something else, then it won't matter.