Stay the course.
Remember that the 4% SWR guidance for retirement readiness is based on the worst scenarios in history, which include the 60's stagflation, the great depression, etc.
Another reference is the 2000 year retiree was hit with the stock market losing monies for 3 years at the start of retirement, plus another bear market in 2008 and from a historical sequence of market performance, this retiree is still doing fine and especially fine if the WR% is 3%.
I retired 2.5 years ago and the net portfolio increase is under 5%, so SORR is still very much in play.
Take a deep breath and continue enjoying life.
Good advice. I'd also add that it definitely helps to focus on percentages, rather than dollar amounts. I had hit a new peak on February 19, but 9 days later, was down about $224,000. For comparison, that's about what I lost, peak-to-trough, during the Great Recession! But, on a percentage basis, back then I had lost about 51%. This time, it was only around 11.4%.
As for that 2000-2002 period, I've run numbers based on my actual returns, to see how I would have fared, if I had retired at the end of 1999. It was shaping up to be a failure cycle for me for sure, at 4%. At 3%, it was below the original amount as of the end of 2019, but still on a good track to make it to the end of a 30 year retirement.
BUT, I recently realized a few flaws in my calculations. First off, since I'm still working, I've been invested a lot more aggressively, so I got hit harder during those downturns. If I was retired, I would have been invested a bit more moderately. Also, my overall balance back then was much smaller, so additional investments, depending on the time of the year, time of the month even, had some sway over those actual returns.
For instance, at the end of 1999, my portfolio was only $37,135. By the end of 2000, I was up to $57,238. BUT, I had sunk in another $22,566 over the course of the year, so those additional investments definitely had some sway.
By the end of 2001, I was up to $59,592. But I had invested another $22,606. And I distinctly remember investing a pretty big amount in March/April of 2001, when the market was actually up. In fact, I hit a new all-time high that May. But, when things crashed, that chunk that was invested near the high probably hurt me, percentage-wise.
If I was already retired, I wouldn't be adding more money to the portfolio, unless I got an inheritance. So, that would probably lessen the percentage drop I actually took during that timeframe.
By the time the Great Recession came around, I had a much larger portfolio. I was around $422K when it peaked in October 2007. In all of 2008, I added another $30,732, so that wasn't enough to sway the overall percentage as much.
And now, I had peaked at around $2.048M as of February 19. There's no way any additional investments that I make have that much pull, over the percentage. I max out my Roth IRA, but I do that by pulling from an after-tax account, so that's just a transfer, not a net investment. With my contribution and the company match, I'll probably put around $24K into the 401k.
So, I have a feeling that if I was retired, and we had a direct repeat of the 1999+ cycle, I would do better than my calculation had suggested.
