Net Worth increases AFTER RETIRE

[Mdlerth]

There's probably precedent for whatever happens

Don't expect that this state of affairs will continue. I bet we'll see a drop in folks' net worths pretty soon. 2008 wasn't a one-off.

Certainly, in the fullness of time, the markets will drop. But do they go down because they went up? Couldn't they also go down after having stayed at some stagnant level for a while? Or alternatively, couldn't they go up and then plateau at the higher level?

Not criticizing, just asking.

 

[hesperus]

Nine years of a market that goes up, Up and UP will do that for you.

OTOH, had these folks retired into an enraged BEAR market like '74, the story might be different, especially in real terms.

that pretty much says it all.
It'll be interesting to watch how posts change when a bear wanders into this forum.

 

[Sunset]

I think a lot of this discussion also summarizes the issue of a time window: short term vs. long term.

One of the surest ways to decrease NW is by selling everything during a short term NW hit. One of my co-workers did this in 2009 and is only getting back in the market now with the current excitement. Yikes! No wonder he hasn't ER'd yet.

OMG.... just watch your co-worker repeat the cycle again.... so sad..

 

[JoeWras]

OMG.... just watch your co-worker repeat the cycle again.... so sad..

I doubt he is the only one. The next bear may feel pretty bad for some. Kind of like the guy who works out in the open and complains that he's been hit by lightning twice. Some people will get a mauling twice.

 

[Chuckanut]

that pretty much says it all.
It'll be interesting to watch how posts change when a bear wanders into this forum.

And we should keep in mind that the USA did not fully recover in real terms from the 1974 crash until about 1993. See what I mean about a Big Nasty Bear market that not only knocks the market down but keeps it down for years? It can take a long time to recover from the repeated swipes of the Bear's powerful paws.

I am concerned that some of the younger members of this elite group don't have that burned into their memories.

 

[haha]

For example.

If your expense is $50k/yr and you can get 6% return on 1 million dollar porfolio. Now you get $30k pension + $15k social security. How on earth would anyone worrying about depleting their pension?


enuff

This question seems ideally suited to present to the people who are supposedly worried about this situation. On the face of it, it is an odd concern. As you say, how can one deplete a pension? Inflation can do it, but we are not seeing that.Perhaps you misunderstood.

Let us know how they answer

Ha

 

[Enuff2Eat]

I feel a deja vue - I’m pretty sure we had almost exactly this same thread a year or two ago.

i think so too. But once in awhile it's good to sing the same song twice to a new audience to get new perspective.

Hey repetition is a good thing.. Almost everything good in life requires repetition right? from playing basketball, to bowling, to listen to music, to go to work, to invest..

 

[Enuff2Eat]

Don't expect that this state of affairs will continue. I bet we'll see a drop in folks' net worths pretty soon. 2008 wasn't a one-off.

i heard the same... it sounds scary. Just hope that day never come. I like to retire too.

 

[GalaxyBoy]

Increasing NW in retirement shouldn’t be that surprising. Just run firecalc and look at the number of curves that go up. We happen to be on one of those (or one similar). Whether it continues up and when it turns down, who knows? Plan for the worst and hope for the best.

 

[jkern]

I retired in the summer of 09 and my NW has increased by $1.25M thanks to Real Estate and stocks.

 

[GravitySucks]

I'll take another '08 as long as it's followed by a '10 - 17.
A '74 would be a bit of a scare.
Note that 1974 passes the 4% "rule" though. It probably was the final nail in the coffin for the 1965 1966 group though.

 

[nun]

I don't touch my IRA/401k/403b/457 money and don't plan to other than for ROTH rollovers and RMDs. I live off a small pension and rent and actually have some left over to invest. So that along with dividends and capital gains has seen my networth increase substantially since I retired 4 years ago.

 

[Sasset]

Net worth has definitely increased since retirement!!

 

[mickeyd]

Were in rarified air. Just enjoy the riches that the market will deliver and understand that RTM will eventually change the whole picture.

 

[kcowan]

I am concerned that some of the younger members of this elite group don't have that burned into their memories.

It could represent an opportunity. A whole generation that does not appreciate a long downward spiral! I feel sorry for them!

 

[marko]

For some reason I was cruising through my spreadsheet this morning and for fun saw that, minus my withdrawals my average return over the past 6 years has been about 6.4%.

Now, some years I only WD 2% or 3% (2017 was 5.1% but whatever) and obviously the 10 year rally has been a factor, but it's easy to see how a growing portfolio can happen.

 

[augam]

And we should keep in mind that the USA did not fully recover in real terms from the 1974 crash until about 1993. See what I mean about a Big Nasty Bear market that not only knocks the market down but keeps it down for years? It can take a long time to recover from the repeated swipes of the Bear's powerful paws.

I am concerned that some of the younger members of this elite group don't have that burned into their memories.

Agree with you about the recovery post 74’ however wasn’t 08/09 worse in terms of losses. Understood the duration of the 74 - 93 period but these guys pulling the strings at the top have an awful lot of skin in the game as well.

They figured it out post 08’ and did it fast imo. Follow the money and stay the course.

 

[SJ1_]

Nine years of a market that goes up, Up and UP will do that for you.

.

along with Real estate prices.

 

[exnavynuke]

Agree with you about the recovery post 74’ however wasn’t 08/09 worse in terms of losses. Understood the duration of the 74 - 93 period but these guys pulling the strings at the top have an awful lot of skin in the game as well.

They figured it out post 08’ and did it fast imo. Follow the money and stay the course.

and last I heard, the guys who retired in 74' still were able to follow the 4% rule..

 

[audreyh1]

Agree with you about the recovery post 74’ however wasn’t 08/09 worse in terms of losses. Understood the duration of the 74 - 93 period but these guys pulling the strings at the top have an awful lot of skin in the game as well.

They figured it out post 08’ and did it fast imo. Follow the money and stay the course.

They experienced much worse inflation. That’s what kills portfolio survival, although the 1974 retiree portfolio did survive, while the 1966 retiree ran out of money, using the standard 4% scenario.

 

[Islandtraveler]

Portfolio up 34% since ER 29 months ago after expenses. Life is good!

 

[augam]

They experienced much worse inflation. That’s what kills portfolio survival, although the 1974 retiree portfolio did survive, while the 1966 retiree ran out of money, using the standard 4% scenario.

Precisely. Modern day economic practices are much more sensitive to historical events such as the mid - 70's Embargo era.

 

[brett]

As at Jan 1 our net worth is up by 48 percent after five/six years of retirement.

Average after tax spend $70k. Lots of international travel each year-4-5 months on average.

I credit the market and the delta between our personal inflation rate and our equity ROI. We may need this when a slump occurs or if inflation picks up substantially.

This has increase has caused us to think a little differently. We are spending more on travel-upgrading our practices on flights, hotels etc. Plus increased gifting. Our personal spending at home will not change substantially.

 

[Enuff2Eat]

As at Jan 1 our net worth is up by 48 percent after five/six years of retirement.

Average after tax spend $70k. Lots of international travel each year-4-5 months on average.

I credit the market and the delta between our personal inflation rate and our equity ROI. We may need this when a slump occurs or if inflation picks up substantially.

This has increase has caused us to think a little differently. We are spending more on travel-upgrading our practices on flights, hotels etc. Plus increased gifting. Our personal spending at home will not change substantially.

that's incredible. Too good to be true.

Retired, travel, spent $70k/yr and still up 48% after 5 yrs. Congrats. I m happy for you. Hope the market is the same when it's my turn.

 

[street]

Brett >>>> you have done well.