Younger retirees... Your game plan?

[papadad111]

This Q is targeted at those FIREd retirees who are 15 or more years out from collection of annuity, social security , and do not have a pension at all coming in today and will not have a sizable pension way out in time.. Ie, You rely on what assets you have right now.

Are you doing anything differently now that the market has corrected?

What is your source of living expenses?

Are you selling anything. or spending principle (cash) or only living on dividend and interest income.

Any other sources of passive ( you're retired right) income such as real estate or hobby income?

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc

What's your asset allocation ?

How many years of "cash" do you need to feel secure - for living expenses

Do u have dry powder to throw at the market if so what percent of portfolio ?

 

[scrabbler1]

Are you doing anything differently now that the market has corrected? No.

What is your source of living expenses? Mostly dividend income from bond funds.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income. I don't touch principal. I use only monthly dividend income from bond funds.

Any other sources of passive ( you're retired right) income such as real estate or hobby income? No.

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc. Not sure because my income is a function of the number of shares and the dividends per share, not the value of each share.

What's your asset allocation ? In my taxable accounts, it is 62/35/3 in favor of bonds. I have an IRA, too, which I can't touch. It is 52/48 in favor of stocks (target AA=50/50).

How many years of "cash" do you need to feel secure - for living expenses. I don't keep any big pile of cash, just a little bit excess (about $1,500) in my local bank account to pay my bills. The monthly dividend income from my bond funds replenishes the cash.

Do u have dry powder to throw at the market if so what percent of portfolio ? Not sure what you mean by dry powder. I do rebalance once in a while, more often in my IRA, but I have no pile of cash to throw at the market, if that's your question.

 

[rodi]

This Q is targeted at those FIREd retirees who are 15 or more years out from collection of annuity, social security , and do not have a pension at all coming in today and will not have a sizable pension way out in time.. Ie, You rely on what assets you have right now.
Technically I met this requirement when I retired at 52. I plan to collect SS at 67 or 70... unless I decide to collect earlier. More on that later.

Are you doing anything differently now that the market has corrected?
No

What is your source of living expenses?
Several sources - DH has SS coming in. We have rental income coming in. We withdraw from our portfolio.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income.
For the 2016 withdrawal it was covered 100% from dividends.

Any other sources of passive ( you're retired right) income such as real estate or hobby income?
As mentioned - rental and DH's SS

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc
I'm concerned with all those percentages. I'll admit to being a nervous nelly. But I've read enough studies about the importances of rebalancing to the chosen asset allocation and staying the course.

What's your asset allocation ?
60% equities, 30% bonds, 10%/cash equivalents

How many years of "cash" do you need to feel secure - for living expenses
1 year or less... I know that the equities/bonds will throw off a good amount, and we have cashflow coming in from rent and SS.

Do u have dry powder to throw at the market if so what percent of portfolio ? No dry powder. See asset allocation above. The cash portion is because DH has some fear of the market so some of his IRA money is in CDs. I'm working on converting him to Wellesley.

See my answers in blue.

 

[FIREd]

Are you doing anything differently now that the market has corrected?
Buying equities. Just a little bit for now.

What is your source of living expenses?
Dividends, interests.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income.
Only dividend and interest income.

Any other sources of passive ( you're retired right) income such as real estate or hobby income?
No.

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc
We have many years worth of expenses in high quality bonds, CDs, and I-bonds. So in the short run, I am not too concerned.

What's your asset allocation ?
Target is 50/50, I don't really know where it is now.

How many years of "cash" do you need to feel secure - for living expenses
Pure cash? Maybe 1 year.


Do u have dry powder to throw at the market if so what percent of portfolio ?
Plenty. Bonds have done OK so far in this downturn, so I can sell bonds to buy more equities. The percentage will depend on how low we go.

 

[Gone4Good]

Retired in 2010. Market is up, what, 100% since then?

Feeling pretty good.

Check back after another 40% down, or so.

Of course, then I'll be pretty much back to where I started (better, actually, because I've sold equities on the ride up) so still . . .

 

[Whisper66]

As background, I retired in 1Q15 at 55 yrs old. Married, all kids grown and independent, no other dependent family members (such as parents that need help), no debt, no pension, no passive income.

Are you doing anything differently now that the market has corrected? - In expectation of a correction, I moved more toward dividend paying investments back in the August 2015 correction.

What is your source of living expenses? - Dividends should cover 85-100% of my needs. Any shortfall will be covered by selling bond fund assets as long as we are in a market correction. If run into trouble, can cut living expenses pretty sharply with no real pain.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income. - 2016 is first full year of retirement. Current estimate is 85% - 110% of expense needs will be covered by dividend income. Anything not covered will be covered by selling bond fund assets.

Any other sources of passive ( you're retired right) income such as real estate or hobby income? - No

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc - No concern, plan to ride out any downturn as I've done before I retired. Fully expect any downturn to come back to some reasonable level before I am forced to sell equities.

What's your asset allocation ?- 85% equities, 15% bond funds/cash (I put these in the same bucket). Before the August 2015 dip, AA was more like 70/30.

How many years of "cash" do you need to feel secure - for living expenses - A minimum of 3 yrs of expenses covered by cash + bond assets. This excludes any assistance from dividend income.

Do u have dry powder to throw at the market if so what percent of portfolio ? - No. Shot what I had available in August 2015.

 

[jim584672]

Are you doing anything differently now that the market has corrected?
Waiting for sales on some preferred stocks.

What is your source of living expenses?
Interest and dividends.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income.
Base expenses covered by income, can draw down as needed.

Any other sources of passive ( you're retired right) income such as real estate or hobby income?
None.

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc
Not too concerned, not exposed in regular equities.

What's your asset allocation ?
CDs, preferreds, GICs in legacy 401k

How many years of "cash" do you need to feel secure - for living expenses
Can sell stock or break CDs as needed.

Do u have dry powder to throw at the market if so what percent of portfolio ?
No plans to throw into the market any time soon.

 

[photoguy]

This Q is targeted at those FIREd retirees who are 15 or more years out from collection of annuity, social security , and do not have a pension at all coming in today and will not have a sizable pension way out in time.. Ie, You rely on what assets you have right now.

I'm in my early 40s with no pension so I guess I fit your criteria. Been ER'd now for almost 2 years (wow time flies)

Are you doing anything differently now that the market has corrected?

No. We will follow the standard buy & hold + rebalance.

But during our planning process we assumed that we would hit a bear market in the beginning and/or experience poor returns. This in turn lead to a low equity percentage (65%) and low planned withdrawal rate (2-3%)

What is your source of living expenses?

Cash in our portfolio. However wife picked up some part time consulting from her former employer (completely unplanned) and this covers a big chunk of basic living expenses (in 2015 this covered roughly 50%).

Are you selling anything. or spending principle (cash) or only living on dividend and interest income.

We haven't had to sell anything yet as living expenses have been covered by taxable dividends and DW part time consulting. Our spending in 2015 was 2% so in theory this could be covered completely by dividends (ignoring the fact that some of our funds are inaccessible in tax-defered accounts).

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc

I'm not concerned at all with capital preservation in the short run. My main concern is long run preservation.


What's your asset allocation ?

65% Equities, 35% Bonds/Cash. Equities are further subdivided in 57% US and 43% Foreign.

How many years of "cash" do you need to feel secure - for living expenses

I don't think of cash separately from fixed income. But at 35% fixed income and withdrawal rate at 2-3%, we're talking over a decade at least of spending money. So I feel secure but I'm not sure what the lower boundary is where I would start to worry

Do u have dry powder to throw at the market if so what percent of portfolio ?

The 35% in bonds/cash

 

[papadad111]

Good responses so far. Insightful how people without pension guarantees nor social security cope early on in retirement .

General observation is that the typical AA is approx 70/30. Tilt toward equities with Cash and bonds lumped together- about what I would expect for early early retirees. With a bit of math translation- on average a 8-12 years worth of cash or cash like (bonds Etc) assets that depending on that are not equity- dependent. A few are 80-90 percent in equities but able to live off of dividend income alone thus the higher AA is not cause for concern nor is there a desire to reduce equity exposure as long as dividends hold up in absolute $ payout terms.

WR all all well below 4% - some down at 2% with some part time work or alternate income sources to help reduce the main portfolio WR.

Other observation thus far is that few if any drastic short term changes to AA and no temptation to get in and buy at lower price just because there is a sale ... Most are sticking to their AA and just normal annual etc rebalancing as needed -

Sequence of return risk is real and it's clear many early early retirees have taken a properly conservative stance to prepare for these sorts of "worst case" SOR scenarios*.

*it could get worse yet....

 

[papadad111]

Photo guy - quick Q. Was your planned WR at 3% and DW unplanned consulting gig extra income knocks that down to 2% ?

Or you went in to FIRE planning for 2% and the consulting income takes portfolio and dividend dependence WR to less than that ?

Is your WR inclusive of dividends or just what gets drawn down from principle. ?

I got confused. Sorry.

 

[DrRoy]

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc. Not sure because my income is a function of the number of shares and the dividends per share, not the value of each share.

This is true in general, and in the shot run, but does not always hold forever. The conditions that lead to severe market declines can also lead to the loss of this income. Companies occasionally go broke and no longer have value or pay a dividend. Example - pre-bankruptcy GM. Securities can also reduce their payouts even if they to not go broke such as banks during the Great Recession and recently KMI. Bond holders occasionally lose income too. Can you say Detroit or Puerto Rico?

 

[scrabbler1]

Papadad, another thing I want to mention about those of use who are ERed years before we are eligible to collect a pension, SS, or tap into a TIRA is this: Many of us have a two-tiered ER plan, the first tier is to get us safely to age ~60 with those early years only able to use our non-retirement assets and their income to cover our expenses. The second tier, which I have often referred to as my "reinforcements," is the unlocking of these additional assets and income streams which only improve my financial picture. This picture is borne out when I run a long-term retirement program such as Fidelity's RIP (I am a Fido client) which shows the huge, growing surplus once I begin tapping into those reinforcements.


The bigger challenge is getting to age ~60, of course. But as long as I can use the monthly dividends from my bond mutual funds (not the more risky individual bonds, DrRoy) to cover my expenses, I will be fine. I do recognize that even those more stable and reliable monthly dividends can and have declined some in the last 7 years in terms of DPS, I have also added many more shares through budget surpluses, rebalancing, and the more erratic and reinvested cap gain distributions to keep the monthly dividend stable. I have also begun using my quarterly stock fund dividend to supplement my income, a Plan B I had always contemplated implementing.

 

[jim584672]

Getting to the "reinforcements" is a gap of 4 to 14 years for me.

 

[FreqFlyer]

I left work last year at the age of 43. I will receive some residual separation payments from my employer that will fund my living expenses in 2016 and 2017.

Are you doing anything differently now that the market has corrected?
So far the correction hasn't made me too nervous, nothing like 2008.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income.
Living on severance payments.

Any other sources of passive ( you're retired right) income such as real estate or hobby income?
None.

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc
I'd be worried at a 20% correction and would cut spending. At 30% I'd be more worried and might

What's your asset allocation ?
Right now I'm 80/20 Stock/Bonds+cash

How many years of "cash" do you need to feel secure - for living expenses
2 years in cash, with the current dividend yield of my taxable portfolio I would stretch it to 4 years or more if I kept discretionary spending under control.

Do u have dry powder to throw at the market if so what percent of portfolio
If we appeared to hit bottom I'd probably increase my equity allocation and lower my cash and make due with just my dividend income. In a pinch I would survive on dividends and wait for the market to move back up before selling.

 

[papadad111]

Yes. Good point scrabbler1. That approach is very conservative.

When you state a portfolio WR is that a mental exercise to base it on non IRA assets ? Or X percent is X percent of everything ?

It's a critical element to have sources of money prior to that magic age of 59.5 outside of IRA's or be willing to pull a 72T

 

[papadad111]

Getting to the "reinforcements" is a gap of 4 to 14 years for me.

Why such a variation? Pension vs SS ?

 

[jim584672]

Why such a variation? Pension vs SS ?

Pension starts from 55 to 65, Social Security from 62 to 70.

 

[papadad111]

I left work last year at the age of 43. I will receive some residual separation payments from my employer that will fund my living expenses in 2016 and 2017.



Are you doing anything differently now that the market has corrected?

So far the correction hasn't made me too nervous, nothing like 2008.



Are you selling anything. or spending principle (cash) or only living on dividend and interest income.

Living on severance payments.



Any other sources of passive ( you're retired right) income such as real estate or hobby income?

None.



At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc

I'd be worried at a 20% correction and would cut spending. At 30% I'd be more worried and might



What's your asset allocation ?

Right now I'm 80/20 Stock/Bonds+cash



How many years of "cash" do you need to feel secure - for living expenses

2 years in cash, with the current dividend yield of my taxable portfolio I would stretch it to 4 years or more if I kept discretionary spending under control.



Do u have dry powder to throw at the market if so what percent of portfolio

If we appeared to hit bottom I'd probably increase my equity allocation and lower my cash and make due with just my dividend income. In a pinch I would survive on dividends and wait for the market to move back up before selling.

Eventual pension ? Or no pension at all -- all on your own for ever til Uncle Sam comes up with some SS ? Or retired military ?

 

[rodi]

Hey Papadad - how about you share your answers?

 

[TallTim]

Are you doing anything differently now that the market has corrected? No; not really. I had moved a big chunk into cash/cash equivalents in the Fall of 15 in anticipation of some tax moves at the start of the year - and while all that stuff is being set up and $$ moved around, I am not upset that we did that.

What is your source of living expenses? Small consulting contract w/ former employer, but mostly trading profits on portfolio and then portfolio cash.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income. See above.

Any other sources of passive ( you're retired right) income such as real estate or hobby income? Small consulting income; DW has a small hobby business; substantial trading income/profits that in most years will exceed our living expenses.

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc. Probably at >30% we would have to re-look at things.

What's your asset allocation ? Plan is 80-ish% equities (incl ETF, equity mutual funds and individual issues) and 20-ish% cash and bonds (incl cash, CDs, AAA or better corp debt and municipal bond fund)

How many years of "cash" do you need to feel secure - for living expenses Well, is our first year of full RE and we have just started to dip into the pile, having lived off severance and consulting for the last 6 months of 15. This year we will start the year with about a year's costs plus one year of college expenses in true cash; too much, I know, but we wanted to be conservative and make sure we didn't tap the big pile (by selling assets) this year if possible.

Do u have dry powder to throw at the market if so what percent of portfolio ? Yes, per above; will deploy the cash slowly.

 

[photoguy]

Photo guy - quick Q. Was your planned WR at 3% and DW unplanned consulting gig extra income knocks that down to 2% ?

Or you went in to FIRE planning for 2% and the consulting income takes portfolio and dividend dependence WR to less than that ?

Is your WR inclusive of dividends or just what gets drawn down from principle. ?

I got confused. Sorry.

We don't have a rigid withdrawal plan yet but we have been planning to spend anywhere from 2-3% of our stash (total NW including taxable and tax deferred) per year. Currently we just spend what we need/feel like but I want to formalize this into a mechanical withdrawal (to avoid both over and under spending).

In 2015 our expenses totaled 2% of our the portfolio value at the start of the year. DW income covered 1/2 of our expenses, so I guess you could say we withdrew 1%. Note that the 2% is our expenses on a cash basis and does NOT include accruals for capital expenses (like a new car) or lumpy medical costs.

I have no idea how long she will want to continue part time consulting, she might end this year or she might continue for several years. She has found that when she gets to work on her terms it is not that onerous. Plus as we are moving around a lot it give her some additional social interaction (it takes a while to develop new friends). However, we made our plans assuming no other income streams so this is just a bonus.

We're total return investors and don't make a distinction between dividends and principle. But since we only spent 2%, this is well within the range of dividends for an all equity portfolio. However ~1/2 of our portfolio is in tax-deferred accounts so we couldn't access those dividends for living expenses.

 

[scrabbler1]

Yes. Good point scrabbler1. That approach is very conservative.

When you state a portfolio WR is that a mental exercise to base it on non IRA assets ? Or X percent is X percent of everything ?

It's a critical element to have sources of money prior to that magic age of 59.5 outside of IRA's or be willing to pull a 72T

When I state a WR, it is based on my entire portfolio including the IRA. I do keep track of the WR based only on the taxable investments, though.

As my signature line suggests, I cashed out the company stock in my former company's savings plan when I left the company. That basically reversed my AA between the taxable accounts and the retirement account. It was about 2:1 in favor of the retirement accounts but then went to 2:1 in favor of the taxable accounts because I needed the extra money now even if I had to take a tax hit on it. Most of the stock's value was NUA so the tax hit was fairly light, about 25% overall (federal and state).

 

[Fean]

This Q is targeted at those FIREd retirees who are 15 or more years out from collection of annuity, social security , and do not have a pension at all coming in today and will not have a sizable pension way out in time.. Ie, You rely on what assets you have right now.

We retired a little over 2 years ago. DW and I are both in our early 40s so SS is a long way out for us. We have no annuities or pensions, but I will most likely start laddering some small SPIAs in the future. Since I have a lot of $0 years for SS earnings, our SS won't be enormous and I'd like our portfolio to become more pension-like over time. By the time we are in our 70s, I'd like at least half of our basic expenses to be covered by SS and SPIAs.

Are you doing anything differently now that the market has corrected?

Nope. Our plan is our plan...If our plan was at risk for derailment after a minor correction, then we'd probably have bigger financial problems than the correction

What is your source of living expenses?

Dividends and interest in our taxable accounts cover ~85% of our expenses. We include expenditures for taxes and accruals for big ticket items like vehicles and medical expenses in our annual budget. Whatever we don't spend each year goes into a virtual "bucket" in one of my spreadsheets and we dip into that bucket whenever we have a big expense. That helps us smooth out the impact of large expected (or unexpected) expenses when we budget.

The remaining 15% of our budget comes from a pool of cash that I replenish whenever I rebalance our portfolio. We are big fans of total return.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income.

We can almost, but not quite, live solely on dividends and interest. Our withdrawal rates for 2014 and 2015 were 2.44% and 2.46% respectively and we can't quite get there with our current portfolio's dividends/interest. I top off a cash pool whenever I rebalance and we use that to supplement what our portfolio brings in. I haven't had to explicitly sell anything though outside of our planned rebalancing.

Any other sources of passive ( you're retired right) income such as real estate or hobby income?

A friend and former co-worker asked me to do 2 days of consulting with his company last year. Other than those 2 days of "work", we haven't had any outside income for 2+ years of retirement. I'd have done the work for free because I mainly just wanted to catch up with my old colleagues, but don't tell my friend that

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc

I don't focus much on the exact levels of the market. My criteria is based on the current withdrawal rate for our expenses. If the market goes down, that makes our WR increase. However, we have control over our spending so we can tweak discretionary spending to bring WR back down if necessary. Our plan is to start cutting back on discretionary spending if our WR hits 3.5% and for me to start looking for w*rk if our WR hits 5%. That would require our fairly conservative portfolio to drop well over 50% (probably closer to 60% if we cut discretionary spending) so hopefully I'll never need to brush off my resume.

What's your asset allocation ?

Our current AA is 57/40/3, but that is a little misleading. A big chunk of the 40% fixed income block is actually in short-term bonds that I can snag without much penalty for emergencies or to avoid selling equity during a downturn. Also, we are gradually moving our non-inflation adjusted bond holdings to inflation-adjusted holdings. By the time we hit 70, I'd like to have roughly half of our bond holdings be inflation-adjusted.

• Equity (domestic): 35%
• Equity (foreign): 17%
• Equity (REITs): 5%
• Bonds (non-inflation adjusted): 26%
• Bonds (inflation adjusted): 14%
• Cash: 3%

How many years of "cash" do you need to feel secure - for living expenses

I keep enough "cash" to cover our annual dividend/interest shortfall for 5 years. That includes a chunk of short-term bonds that I can tap if necessary.

Do u have dry powder to throw at the market if so what percent of portfolio ?

Not really. At this point, I just rebalance as necessary when our AA drifts more than 5% in either direction. I don't like keeping "dry powder" around since I prefer my money to be at work earning me more money.

-Fean

 

[papadad111]

Excellent replies. Very good insight.
Scrabbler - I'm working on my responses too. I actually intended to post what I'm doing as well but got side tracked. Stand by - on the way

It's insightful how the WR is in the low or mid 2's for those of us who grew up working without any promise of a pension and skepticism that SS will be there in full when we hit full Retirement Age.

More conservatism needed than the ones who retire early by a few years to be able to go a few decades early!

The percentage difference is big - Looking like a 50 percent or larger portfolio/ egg needed to FIRE "early early".

 

[FUEGO]

I'm 35 so a little over 30 years from collecting SS at full retirement age.

Are you doing anything differently now that the market has corrected?
Not yet, but see my comments at the end of this post. Ask me after another 30% drop and I'll probably change my tune.

What is your source of living expenses?
$1.x million portfolio covers living expenses at a 2-3% withdrawal rate (div yield > avg 2014-2015 expenses). I also started a blog and some other side projects post-FIRE and it covers ~100% of living expenses. Wife is also still working (but not for long) which covers 100%+ of living expenses.

Are you selling anything. or spending principle (cash) or only living on dividend and interest income.
So far other income streams cover living expenses so not selling anything. I collect dividends from taxable account and they cover 25-30% of living expenses (and the checking account keeps growing).

Any other sources of passive ( you're retired right) income such as real estate or hobby income?
I started a blog and some other side projects post-FIRE and it covers ~100% of living expenses.

At what market level from the top do you start to be very concerned about capital preservation in the short run ? Down 10-20-30-50-66 percent etc
My gut says 40% or so I would get worried about where my money would come from after 1-3 years (once the cash/bonds on hand is depleted). It looks like we're down 12-13% from our peak, and I'm about 1.5% worried right now (aka sleeping like a plump well fed baby at night).

Even with a 40% drop from the peak, we can take a 4% withdrawal on the portfolio value (under the variable portfolio withdrawal model) and still cover our 2015 budget which includes about 75% necessities and 25% purely discretionary spending. I'm planning on going to a 4% variable withdrawal (or less if we don't need it) so this will be a good test. We could sustain a 55% drop from the peak and still have a 4% variable withdrawal cover all of our core expenses plus some small fun money. I'm also not averse to working a few more hours per week to bring in another $10-15k/yr if it's uglay.


What's your asset allocation ?
97% equities, 1% bonds, 2% cash

How many years of "cash" do you need to feel secure - for living expenses
1-2 years

Do u have dry powder to throw at the market if so what percent of portfolio ?
No, but I might toss some of my living expenses cash into the market if the market does a March 2009 on me. I might also consider margin borrowing, cash out refi-ing the house, or cash out financing a car (if we had one worth anything). Nothing crazy - perhaps 10-15% of total portfolio value.

I put together a 2016 budget to help us spend more money and so far I'm planning on sticking with it. The budget includes a lot of extra discretionary spending including more on travel. I'm not sure we actually want to do another multi-month trip this summer, so the $ is likely to get diverted to buying a new(er) car instead. And then do a relatively inexpensive and shorter road trip in the new(er) car.

Barring abnormally high unexpected expenses or us tackling some known home improvement tasks, I doubt we'll be able to spend our upgraded budget which is 21% higher than 2015's budget. If we see another 20-30% drop in portfolio value, I will certainly re-examine our budget and consider cutting costs, including postponing the new(er) car purchase. It's really only going to be used for road trips and we have a perfectly adequate car for that right now (but why not splurge on a nice ride if you've got the $).

Then again, if my side hustle income keeps gushing in like it did in 2015, I might proceed with plans to spend the full 2016 budget and then some. Especially if we start seeing discounted recession-like pricing on home improvement and travel.