Share Your 2025 Milestones

[Grayscock]

If you're like many of us, you'll hit $1M soon. Then the markets will correct, and you'll drop below $1M, but then there'll be a rebound, and you'll be back over $1M. After 2 or 3 cycles, hopefully you'll stay above $1M when there's a correction, unless it's a major correction like we had in 2020. Then I suggest you invest as much as you can when the funds are on sale.

Be patient... It's going to happen eventually. I had to wait until I was age 49.

Exactly. I crossed the $900k mark for the third time this week. I'm sure it will be the same for $1M.

 

[Andre1969]

Exactly. I crossed the $900k mark for the third time this week. I'm sure it will be the same for $1M.

Yeah, that's another thing we all probably need a reminder of...to be patient, and that these new thresholds don't always hold the first time we hit them. Looking back through my records, I hit $1M for the first time in February of 2015. However, my investments went back and forth across the $1M mark a few times, and it wasn't until March of 2016 that I finally crossed $1M and never looked back.

But even then, I came scary close to $1M in 2020. I peaked on 2/19/20, at around $2.048M. However, by 3/23 I was at $1.362M. That might seem like a long ways from $1M, but when you're coming off of the $2M, euphoria, it's still a bit too close for comfort!

 

[Digger1000]

S&P 500 dropped 49% in 2000 and 56% in 2008. I'm always mentally prepared to lose 50% of my money.

 

[tulak]

I only have an 80% equity allocation, so I can plan for a 40% drop assuming a 50% drop in equities. But this is overly conservative. In 2008, which was the worst in recent memory, was -37%, and in 2009 was up 26.46%.

Worst is multiple consecutive down years, such as 2000-2002. For 2000, it was only down -9.1%. The subsequent drops in 2001 and 2002, -11.89% and -22.10% respectively, make it worse.

A lot of people like to point out these bigger drops, but they are from peaks and to make a point and instill fear in equities (IMO). Reality is if you had a good allocation and plan, you would have been fine in the last few decades.

Here’s the source that I used for S&P500 returns: S&P 500 - Wikipedia

 

[Dtail]

I only have an 80% equity allocation, so I can plan for a 40% drop assuming a 50% drop in equities. But this is overly conservative. In 2008, which was the worst in recent memory, was -37%, and in 2009 was up 26.46%.

Worst is multiple consecutive down years, such as 2000-2002. For 2000, it was only down -9.1%. The subsequent drops in 2001 and 2002, -11.89% and -22.10% respectively, make it worse.

A lot of people like to point out these bigger drops, but they are from peaks and to make a point and instill fear in equities (IMO). Reality is if you had a good allocation and plan, you would have been fine in the last few decades.

Here’s the source that I used for S&P500 returns: S&P 500 - Wikipedia

Yep, the worst years to start a retirement do not include 2000 or 2008.

 

[bada bing]

I crossed $1M in Roth for the first time. My conversions have been limited to the IRMAA limit for 4 years now. I noticed it last week when I made 2025 Roth IRA contribution, I still have enough earned income to cover the contributions. Hopefully for a few more years.

I have another milestone this year, it's partially already happened. My FRA is July this year. One reason, but not the deciding reason, I haven't taken SS yet is the earnings cap. I could now take SS and not run over the earnings cap. WooHoo, I'm getting older. Best milestone of all.

 

[tulak]

Yep, the worst years to start a retirement do not include 2000 or 2008.

True, but what really needs to be considered is inflation. Market drops are only looking at part of the picture.

Some of the worst years would have been ok if not for inflation.

 

[audreyh1]

True, but what really needs to be considered is inflation. Market drops are only looking at part of the picture.

Some of the worst years would have been ok if not for inflation.

Right, taking into account inflation from 2009 low my portfolio did not recover until late 2012 whereas in nominal terms it had recovered by late 2010.

Also no 30 year period yet for starting years 2000 or 2008.

 

[tulak]

Right, taking into account inflation from 2009 low my portfolio did not recover until late 2012 whereas in nominal terms it had recovered by late 2010.

Also no 30 year period yet for starting years 2000 or 2008.

And those years had low inflation.

I was thinking of years like 1973/74, where the S&P500 dropped double-digits and you had significant inflation too.

If you take inflation out of the picture, the S&P500 returns don't look that bad. This is, after-all, what led to the infamous "The Death of Equities" BusinessWeek article, from 1979, with the full headline:

The Death of Equities​

How inflation is destroying the stock market​

But if you look only at S&P500 returns:

1973	-14.66%
1974	-26.47%
1975	37.20%
1976	23.84%
1977	-7.18%
1978	6.56%
1979	18.44%
1980	32.50%
1981	-4.92%

Not too bad. I'd be happy with those returns without any/low inflation and that's excluding 1971-72 and 1982-83, which had double-digital returns.

 

[Dtail]

Right, taking into account inflation from 2009 low my portfolio did not recover until late 2012 whereas in nominal terms it had recovered by late 2010.

Also no 30 year period yet for starting years 2000 or 2008.

True, I should have stated "as of yet". Year 2000 is probably in the top 10 or near it so far.

 

[Dtail]

And those years had low inflation.

I was thinking of years like 1973/74, where the S&P500 dropped double-digits and you had significant inflation too.

If you take inflation out of the picture, the S&P500 returns don't look that bad. This is, after-all, what led to the infamous "The Death of Equities" BusinessWeek article, from 1979, with the full headline:



But if you look only at S&P500 returns:

1973	-14.66%
1974	-26.47%
1975	37.20%
1976	23.84%
1977	-7.18%
1978	6.56%
1979	18.44%
1980	32.50%
1981	-4.92%

Not too bad. I'd be happy with those returns without any/low inflation and that's excluding 1971-72 and 1982-83, which had double-digital returns.

Agree with the concept of inflation also being a potential large factor. Even so, I don't believe that 1973 start of retirement year is still in the top 5.

 

[audreyh1]

Agree with the concept of inflation also being a potential large factor. Even so, I don't believe that 1973 start of retirement year is still in the top 5.

1966 or 1967 is. That’s when 1973 served the double whammy.

 

[Digger1000]

Market will go up the next few days as I will have 50k out of the market while it moves from TIAA 403b to Fidelity rollover IRA. Got today's closing price. Not getting anywhere moving 20k at a time. Hate being out of the market.

 

[Zona]

DH fully retired in August of 2021. At that time, we had our "number" plus what we considered a little bit of cushion. Since that time, we've been using a withdrawal rate of between 3.25% and 3.5% for our annual spend. The other day I thought, "Wow! Our portfolio is really at an all-time high!". But that got me thinking...is it? What about inflation, and how are we really doing with sequence of returns?

So I decided to put together a spreadsheet where I started with what our net worth value was in August 2021 (green line). Then for every year since, I've converted our net worth for that year-end into August 2021 dollars. It was eye-opening, to say the least. 2022 really took a bite out of the nest egg and we still haven't fully recovered. I didn't want to put too much personal NW info here but in my example chart, it shows what has happened to each million dollars in our portfolio since August 2021. The last line shows current net worth in today's dollars (blue) right next to current net worth in August 2021 dollars (yellow). It was a helpful exercise that made me want to pay closer attention to inflationary impacts and sequence of returns on our portfolio.

The source I'm using for inflation calculator is the BLS CPI Inflation Calculator.

 

[audreyh1]

I track our net worth since retiring against inflation too. After a few years inflation really makes a difference. Of course 2021 accelerated that difference!

 

[Dtail]

I track our net worth since retiring against inflation too. After a few years inflation really makes a difference. Of course 2021 accelerated that difference!

Same here.

 

[Digger1000]

With inflation I have doubled my money since retiring April 2017 (no SS and no pension). In raw numbers I am up 163%.

My total yearly spending has failed to keep up with inflation. My total spending was $13,694.85 in 2024 and $13,363.70 in 2023.

 

[Purslane]

I’ve pretty much decided that in 2025 I have to start adapting to the reality of being in the middle of the Senior Citizen part of life. Time to purge a lot of things from my life that made sense when I first retired over 10 years ago, but now are just minor nuisances at best and obstacles to happy life at worst.

Minimalism is the word of the year for 2025,

Like what?

 

[Andre1969]

I've been running a rough simulation using Excel, of how my investments would have performed if I had retired on 12/31/1999, using actual inflation numbers, and my own personal performance.

Now, my calculation is pretty simple, and probably has faults in it. But I started off with $1M. Then immediately make my year's withdrawal, all at once, at the beginning of the new year. So, for a 4% withdrawal, I started at $1M on 12/31/1999. I immediately took out $40K at the beginning of 2000. That left $960K. Then I'd add/subtract my total return for the year. In 2000, I was down about 5.4%. From $960K, that's $51,840. So by 12/31/2000, I was down to $908,160.

Well, at a 4% withdrawal rate, inflation-adjusted, my portfolio ran out of money in 2023. As of 12/31/2022, it was down to $50,234, and the 2023 withdrawal had risen to $71,660 inflation adjusted, so that killed it immediately.

At 3%, which means I started off with a $30K withdrawal back in 2000, the portfolio was at $1,004,471 on 12/31/24, and the 2025 withdrawal was projected to be $57,627.

At 3.5% ($35K initial withdrawal), the 12/31/24 balance was $441,953. The 2025 withdrawal would have been $67,231. That's blown up to about a 15% withdrawal rate, so I'd expect this scenario to fail fairly soon. But, I'd guess it still has a good chance of making it to the end of a 30 year span.

I had been suspecting for awhile that a 1999/2000 retirement date would end up being one of the failure cycles for FireCalc. And, for me at least, it looks like it would have been!

And truth be told, even 3% hasn't held up that great. While it's still over $1M, 25 years later, inflation has taken its toll. That $1M would have needed to grow to around $1.8M to keep pace with inflation. Meanwhile, what it's been whittled down to would be about the equivalent of around $540K back in late 1999/2000.

 

[Digger1000]

I've been running a rough simulation using Excel, of how my investments would have performed if I had retired on 12/31/1999, using actual inflation numbers, and my own personal performance.

Now, my calculation is pretty simple, and probably has faults in it. But I started off with $1M. Then immediately make my year's withdrawal, all at once, at the beginning of the new year. So, for a 4% withdrawal, I started at $1M on 12/31/1999. I immediately took out $40K at the beginning of 2000. That left $960K. Then I'd add/subtract my total return for the year. In 2000, I was down about 5.4%. From $960K, that's $51,840. So by 12/31/2000, I was down to $908,160.

Well, at a 4% withdrawal rate, inflation-adjusted, my portfolio ran out of money in 2023. As of 12/31/2022, it was down to $50,234, and the 2023 withdrawal had risen to $71,660 inflation adjusted, so that killed it immediately.

At 3%, which means I started off with a $30K withdrawal back in 2000, the portfolio was at $1,004,471 on 12/31/24, and the 2025 withdrawal was projected to be $57,627.

At 3.5% ($35K initial withdrawal), the 12/31/24 balance was $441,953. The 2025 withdrawal would have been $67,231. That's blown up to about a 15% withdrawal rate, so I'd expect this scenario to fail fairly soon. But, I'd guess it still has a good chance of making it to the end of a 30 year span.

I had been suspecting for awhile that a 1999/2000 retirement date would end up being one of the failure cycles for FireCalc. And, for me at least, it looks like it would have been!

And truth be told, even 3% hasn't held up that great. While it's still over $1M, 25 years later, inflation has taken its toll. That $1M would have needed to grow to around $1.8M to keep pace with inflation. Meanwhile, what it's been whittled down to would be about the equivalent of around $540K back in late 1999/2000.

Thank you sir.

 

[The Cosmic Avenger]

Hit a big milestone this week, hitting $5M total assets without our house equity. (Fidelity Full View shows two cards, total NW and total cash/investments, so it was the latter.)

 

[tulak]

I've been running a rough simulation using Excel, of how my investments would have performed if I had retired on 12/31/1999, using actual inflation numbers, and my own personal performance.

Can't you model this in Firecalc, specifying 24 years and then seeing what the starting balance was for 2024?

Assuming I did this correctly, using 1 million and a 4% WR, then you'd have $442,246 at the start of 2024. That's not trending well and could be a stretch to survive another 6 years.

There was only one cycle that failed and that was 1966. If you retired in 1996, then 24 years later you'd have -$52,737.

So retiring in 2000 is not great, but historically, might not be the worst either.

Of course, this is using Firecalc's returns and not yours, so that can be a big difference. I used the default allocations in Firecalc.

Ok, so I was curious, what starting years have a balance under a million after 24 years?

Thank you Firecalc for the data and ChatGPT for providing the script:

Year: 1899, Final Amount: $993,249
Year: 1902, Final Amount: $829,639
Year: 1906, Final Amount: $592,492
Year: 1907, Final Amount: $791,366
Year: 1909, Final Amount: $527,716
Year: 1910, Final Amount: $713,332
Year: 1911, Final Amount: $621,254
Year: 1912, Final Amount: $779,416
Year: 1916, Final Amount: $985,174
Year: 1929, Final Amount: $607,435
Year: 1930, Final Amount: $945,882
Year: 1937, Final Amount: $989,210
Year: 1964, Final Amount: $900,438
Year: 1965, Final Amount: $320,475
Year: 1966, Final Amount: -$52,737
Year: 1967, Final Amount: $732,114
Year: 1968, Final Amount: $259,151
Year: 1969, Final Amount: $90,360
Year: 1973, Final Amount: $596,130
Year: 1999, Final Amount: $647,209
Year: 2000, Final Amount: $442,246

Based on this, 2000 is definitely in the club of bad starting years, in 5th place.

 

[audreyh1]

Very good! Of course those are inflation adjusted (real) dollars. So for most nominal won’t be under $1M but spending power will be.