Retiring at the start of a down turn... oddly at peace.

[TrophyHusband]

This was our year. July 27th 2022 had been the FIRE marker for years. Everything allocated, calculated and planned out..... DW would work OMY (2023) until DD was off to college then we would hit the road.

Then COVID hit. DW was so overwhelmed at work with COVID related issues she quit 2-years early. No worries, our plan had enough robustness and depth to handle it....

Then inflation climbed to 40 year highs.

Then the 2022 bear market hit.

We're down 7 figures + in 6 months and now below our safety threshold. Let alone the need to recalibrate a lifestyle based on the increasing costs for everything, especially our desire to travel.

Our plan could handle one "deviation" but not a market meltdown and record inflation on top of it. So FIRE is on hold, at least for a year, probably more.

SoRR is real, inflation destroys savings and I'm definitely NOT at peace.

 

[COcheesehead]

SORR was the thing I feared most when preparing for our July 2020 date. I worked on it for five years prior to pulling the plug. I felt a little stupid, too conservative, but all the prep allowed us to not only absorb the pandemic, but today’s bear market.
SORR is real and it’s real hard to recover from.

 

[shafer9]

Took me a year to stop feeling guilty (I was self employed) but about day 370, I was on to other stuff and didn’t look back.
Buh bye.

 

[Koolau]

This was our year. July 27th 2022 had been the FIRE marker for years. Everything allocated, calculated and planned out..... DW would work OMY (2023) until DD was off to college then we would hit the road.

Then COVID hit. DW was so overwhelmed at work with COVID related issues she quit 2-years early. No worries, our plan had enough robustness and depth to handle it....

Then inflation climbed to 40 year highs.

Then the 2022 bear market hit.

We're down 7 figures + in 6 months and now below our safety threshold. Let alone the need to recalibrate a lifestyle based on the increasing costs for everything, especially our desire to travel.

Our plan could handle one "deviation" but not a market meltdown and record inflation on top of it. So FIRE is on hold, at least for a year, probably more.

SoRR is real, inflation destroys savings and I'm definitely NOT at peace.

I feel your pain - but at least you still have the choice to stay OMY. I retired late '05, so we were soon into the late 00's. It all worked out and I don't worry too much about the current situation (I've seen it all before.) But for those contemplating FIRE right now, I can see how it could be very scary. Best luck!

 

[MC Rider]

.. (I've seen it all before.) .......

My brain decided to play an old song.


Listen kid, you paid for the call. You ain't bad

but we heard it all before.
Don't call us, we'll call youuuuuuu...............

 

[Koolau]

My brain decided to play an old song.


Listen kid, you paid for the call. You ain't bad

but we heard it all before.
Don't call us, we'll call youuuuuuu...............

Always wondered why Sugarloaf never had another big hit. Great group though YMMV.

 

[Lstansbury]

Some peace here too only because of a bit of luck and guidance here.

In December last year, just two months after retiring, I was forced to sell a bunch of equities in order to roll from company 401k to personal IRA. At first I was irritated about the forced sales but luckily it was at a market high so lots of gains came off the table. All the advisors said, "just buy back intp equities asap!" But I was really worried about SORR, too. So against every single advisor's advice except Roger Whitney, (the Retirement Man) , I didn't buy right back in. Not completely anyway. I kept 8 years in cash as a shield against SORR. Eight years seemed to be the time frame he recommended we all cover with super secure cash funding in case of bear market.

Whew. Thanks to the poster on this forum who mentioned the Retirement Man's podcasts, I dodged the SORR bullet, at least for now.

 

[COcheesehead]

Some peace here too only because of a bit of luck and guidance here.

In December last year, just two months after retiring, I was forced to sell a bunch of equities in order to roll from company 401k to personal IRA. At first I was irritated about the forced sales but luckily it was at a market high so lots of gains came off the table. All the advisors said, "just buy back intp equities asap!" But I was really worried about SORR, too. So against every single advisor's advice except Roger Whitney, (the Retirement Man) , I didn't buy right back in. Not completely anyway. I kept 8 years in cash as a shield against SORR. Eight years seemed to be the time frame he recommended we all cover with super secure cash funding in case of bear market.

Whew. Thanks to the poster on this forum who mentioned the Retirement Man's podcasts, I dodged the SORR bullet, at least for now.

The Retirement Answer Man…

Love his podcasts.

 

[rdy4er]

FIREd in Jan of this year, getting my resume together to head back to work until things settle out. Not very happy right now.

 

[COcheesehead]

The unhappy folks who replied, legit question, were you on the edge of your number, was SORR not anticipated, too much in equities, too little in short term funds. Curious what you’d do different.

 

[rdy4er]

The unhappy folks who replied, legit question, were you on the edge of your number, was SORR not anticipated, too much in equities, too little in short term funds. Curious what you’d do different.

In my case I had about a 3.2% swr and 2 years cash. Felt pretty good about my safety zone. Now looking at around a 4%swr and thinking we are heading for a recession. I’m a pilot and worried the airlines will be the first to stop hiring. Just trying to get a job to ride out the downturn.

 

[COcheesehead]

In my case I had about a 3.2% swr and 2 years cash. Felt pretty good about my safety zone. Now looking at around a 4%swr and thinking we are heading for a recession. I’m a pilot and worried the airlines will be the first to stop hiring. Just trying to get a job to ride out the downturn.

Where I live they are cutting flights saying there are not enough pilots. I wish you luck and hope you continue on your path to the best life.

 

[rdy4er]

Where I live they are cutting flights saying there are not enough pilots. I wish you luck and hope you continue on your path to the best life.

Thanks, yep airlines hire like crazy right up until they furlough

 

[Scout]

Went to PT a few years ago. Paid off house when market was closer to 4800. Was gonna pull the trigger:-/
Continuing to work to build up a bit more cash buffer in case this is more protracted than expected although it’s also hard to not take advantage of this excellent buying opportunity.
Lol….my plan was so solid.

 

[COcheesehead]

In our first year of retirement we were at about a 2.5% WR, but that was with buying things for the new house. We bought a new car too. In July we’ll start year 3 of retirement and we are on pace for being under 2% WR and that’s with spending all of our travel budget left for the year, about $17,000. We’ll likely only spend half of that.
So with some flexibility and lots of cashflow from our muni bond ladder, I feel good about we’re we are at. Yes, I would like our portfolio to be where it was last Fall, but today is the first day of the rest of our retirement.

 

[Vincenzo Corleone]

Some peace here too only because of a bit of luck and guidance here.

In December last year, just two months after retiring, I was forced to sell a bunch of equities in order to roll from company 401k to personal IRA. At first I was irritated about the forced sales but luckily it was at a market high so lots of gains came off the table. All the advisors said, "just buy back intp equities asap!" But I was really worried about SORR, too. So against every single advisor's advice except Roger Whitney, (the Retirement Man) , I didn't buy right back in. Not completely anyway. I kept 8 years in cash as a shield against SORR. Eight years seemed to be the time frame he recommended we all cover with super secure cash funding in case of bear market.

Whew. Thanks to the poster on this forum who mentioned the Retirement Man's podcasts, I dodged the SORR bullet, at least for now.

I'd like to take this opportunity to thank the members of this forum for making me aware of SORR (among many other things). After learning about it, I made sure to accumulate enough in cash and individual municipal bonds (laddered) in our taxable account to cover expenses for a good number of years. Between that, a low WR, and a relatively conservative AA (50% equities), I'm sleeping well.

 

[DawgMan]

The unhappy folks who replied, legit question, were you on the edge of your number, was SORR not anticipated, too much in equities, too little in short term funds. Curious what you’d do different.

Can't imagine anyone is "happy", but yes, agree with you. Anyone retiring this year (me included) should have underwritten a much higher probability of significant market downturn, recession included. That's what I did along with setting up a 10 year bond ladder to ride out events like this. In my case, a low WR, 10 yr bond ladder, and a spend plan that is more than 50% discretionary (lots of levers to pull), will hopefully keep me steady at the hull. So far, so good. I figure if I can weather a $hit-show year 1, then I should be good for the long hall. Time will tell. but I AM NOT GOING BACK TO WORK!

 

[COcheesehead]

Can't imagine anyone is "happy", but yes, agree with you. Anyone retiring this year (me included) should have underwritten a much higher probability of significant market downturn, recession included. That's what I did along with setting up a 10 year bond ladder to ride out events like this. In my case, a low WR, 10 yr bond ladder, and a spend plan that is more than 50% discretionary (lots of levers to pull), will hopefully keep me steady at the hull. So far, so good. I figure if I can weather a $hit-show year 1, then I should be good for the long hall. Time will tell. but I AM NOT GOING BACK TO WORK!

You and me sound like brothers. Congratulations!

 

[mojavesue]

I retired in March and the market has only gone down since then. Still, I have no regrets and will ride it out

I had a list of lots of things I wanted to do. A lot of Land scaping projects. Barely cracked it as other things came up and I have no sense of urgency in working through it. I try and do something productive every day, exercise more and am happy I no longer have to go tow work. I enjoyed my job and career and felt I made a difference, but time to focus on my life going forward

Congrats

Hey Romer! Are you a moderator on IH8MUD forum? I'm a bit of a Landcruiser enthusiast. I currently own a 95 triple locked 80. My screen name there is VegasFJ40. Good to see you here as well!

 

[COcheesehead]

I'd like to take this opportunity to thank the members of this forum for making me aware of SORR (among many other things). After learning about it, I made sure to accumulate enough in cash and individual municipal bonds (laddered) in our taxable account to cover expenses for a good number of years. Between that, a low WR, and a relatively conservative AA (50% equities), I'm sleeping well.

Very smart.

 

[MarieIG]

The unhappy folks who replied, legit question, were you on the edge of your number, was SORR not anticipated, too much in equities, too little in short term funds. Curious what you’d do different.

Have only been retired since January. I suppose I qualify as fiscally unhappy.

- No was not on the edge of my number.

- SORR was anticipated for and planned for.

- Do have a cash cushion.

Differently? Gotten out of bond funds and bought some individual short term bonds sooner. There were also some stock positions that were less than stellar. I don't like watching the value of my accounts going down, while expenses are going up.

I also am stressed about the economic situation in the country for other people who are having a hard time, the increase in crime, and overt hate between factions. So, overall I'm feeling a bit stressed.

 

[NomDeER]

The unhappy folks who replied, legit question, were you on the edge of your number, was SORR not anticipated, too much in equities, too little in short term funds. Curious what you’d do different.

I'm stressed. I second much of what MarieIG said and am in a similar situation.

I was not on the edge of my number. Had a significant cushion in there.

I anticipated SORR, though probably didn't think it would happen so big so fast. (I got my last paycheck right around the time the market hit its high.) Ended up doing Roth conversions just before things tanked. I was doing fine emotionally for the first 15% of the correction, but the last week has been tough. It is tougher than previous corrections and bear markets because I don't feel like I can look at it as a buying opportunity or brief blip in the long-term road leading to retirement.

I definitely did NOT anticipate the huge inflation that may have long term consequences.

I have a cash cushion so don't have to sell. However, I hold bond funds which are not doing well. Like MarieIG, I should have gotten out of bond funds and bought some individual short term bonds.

And, like MarieIG, it adds to my unhappiness to think about people who have it worse than I do along with the factionalism.

I will say that I have factors that most here do not have. Most here own their homes and don't have to sell right now. I don't own my home and the rent inflation is absolutely insane and will far and away be the biggest part of my own inflation hit. It's bad enough for me, but I also think about how many people are not going to be able to pay the rent.

Also, I was planning on moving very soon and had delayed and arranged retirement plans around that but have now decided that it's just not a smart move to take on greater expenses right now with the financial situation so up in the air. Injuring myself within a couple of months of retirement and having multiple health issues come up in the first six months of retirement also took away some of the fun. The first couple of months of just decompressing were very nice, though.

 

[cyber888]

I'm still on track to retiring in 1 year. This downturn in the stock market looks like a blessing in disguise for me, because I would have been more panicky and less prepared if I retired before this stock market crash/correction. With one more year to go, I've done more simulations, run scenarios, look at my cashflows and safety buckets - make sure I can sleep tight in the next 5-7 years, and be more vigilant and conservative at the start of retirement. I've got a projected cashflow for 7 years, calculated ACA subsidizes, withdrawal and taxes, etc. I've got $60K left in my home mortgage (my only debt), but I have $40K in I-Bonds earning 8.5% - so at some point will eventually be debt-free and pay off the house. Fingers crossed, but I feel calm and focused.

 

[COcheesehead]

I'm stressed. I second much of what MarieIG said and am in a similar situation.

I was not on the edge of my number. Had a significant cushion in there.

I anticipated SORR, though probably didn't think it would happen so big so fast. (I got my last paycheck right around the time the market hit its high.) Ended up doing Roth conversions just before things tanked. I was doing fine emotionally for the first 15% of the correction, but the last week has been tough. It is tougher than previous corrections and bear markets because I don't feel like I can look at it as a buying opportunity or brief blip in the long-term road leading to retirement.

I definitely did NOT anticipate the huge inflation that may have long term consequences.

I have a cash cushion so don't have to sell. However, I hold bond funds which are not doing well. Like MarieIG, I should have gotten out of bond funds and bought some individual short term bonds.

And, like MarieIG, it adds to my unhappiness to think about people who have it worse than I do along with the factionalism.

I will say that I have factors that most here do not have. Most here own their homes and don't have to sell right now. I don't own my home and the rent inflation is absolutely insane and will far and away be the biggest part of my own inflation hit. It's bad enough for me, but I also think about how many people are not going to be able to pay the rent.

Also, I was planning on moving very soon and had delayed and arranged retirement plans around that but have now decided that it's just not a smart move to take on greater expenses right now with the financial situation so up in the air. Injuring myself within a couple of months of retirement and having multiple health issues come up in the first six months of retirement also took away some of the fun. The first couple of months of just decompressing were very nice, though.

My sister is a renter and retiring in two months. That’s a tough situation to be in. Who knows where rent will go.

 

[wearefinishedworking]

I am oddly at peace for now. We retired completely at the end of 2021. Right now the cash we have would last 2.5 years with no investments needed. We are both 62 and have not applied for SS benefits (another option if necessary). Hopefully we ride it out until markets reverse course.