Worst time to retire since 2008?

[Diogenes]

Then a job offer came in.
I took it.
And now I am mad at myself.

You were (and are) presumably healthy, have no enormous responsibilities (such as caregiving) that can only be done if no longer employed, and still have smattering of patience for the corporate grind. So, no reason to regret un-retiring!

Stocks had a fairly routine down year, that wasn't the issue in 2022. The problem was inflation hitting 9.1% and the resulting Fed interest rate spikes. ...

2022 was the worst year in history for bonds. A 60/40 would have been walloped mercilessly. It's strange that today we dismiss 2022 as just another blip, whereas we remember the Covid crash (sharp but stunningly brief) and the dot-com crash (which was mostly just a crash in US large-caps). Depending on how one invests, 2022 second only to the 2008 crash in its intensity and destruction.

Yes, generally now is the worse time to retire especially if you carry any debt. And if you are below the Medicare cut off, medical related can be a real burden imho.

This being EARLY retirement, presumably some of us are retiring or semi-retiring a decade or more, before Medicare age (65). For me at least, 65 is so far into the future - and beyond the historical longevity of all of the males in my known (former) family - that it feels like some elaborate and impossible fiction. The OP is a tad older, but even for him, 65 is a long way off - especially, dare I voice it, with his diagnosis. He ought to be retiring right away, never mind what the market does.

 

[marko]

I understand your thinking and I'm guessing I'd chicken out if markets were tanking at the time I'd proposed retirement. But, in theory, such downturns happen every few years. If you retired and then the downturn happened, most of us would just take it in stride (as I did in 2008 after retiring in late 2005). So what is actually "special" about a downturn just before you retire? It's a hypothetical and rhetorical question, I know.

From Peter Lynch: bolds mine

Over the past 93 years, markets have witnessed around 50 declines of 10% or more. "We call that a correction. That's a euphemism for losing a lot of money rapidly,"

Even deeper declines occur periodically. Of those 50 corrections, about 15 have turned into full-fledged bear markets — defined as declines of 25% or more. That means investors can expect a major downturn roughly once every six years.

The takeaway is: investors must accept that markets will fall from time to time. Anybody not ready to brace for such stock market crashes should refrain from investing in stocks

 

[COcheesehead]

That means investors can expect a major downturn roughly ONCE every six years.

If, if, if this one turns into one, it would be the third in 6 years.

 

[marko]

If, if, if this one turns into one, it would be the third in 6 years.

But short lived ones IIRC. My average return since 2020 including ytd is 6.6%. My only negative years was 2022 and this one to-date with lots of time for 2026 to turn around.

 

[COcheesehead]

But short lived ones IIRC.

Still fits your bolded comment about major downturns

 

[CalBird]

If history is any indication:

 

[Markola]

I’ll be contrarian and say, for those every 6 year crashes, only a few lucky prognosticators ever saw them coming. Fewer still took any action. This time, everyone knows the macro context, and the market has priced in the best knowledge. We already see this black swan paddling in the swimming pool. The ones that we don’t see coming are the ones that get us and the markets.

 

[marko]

I’ll be contrarian and say, for those every 6 year crashes, only a few lucky prognosticators ever saw them coming. Fewer still took any action.

And most held the course and did nothing without any long term damage and maybe/likely turned out better than the others for it.

"Just don't just do something...stand there"

 

[Andre1969]

I remember back around 1990-91, in a finance magazine, they said the market goes down on average one year out of every three.

My own investing records go back through 1999. Even though I started investing in late 1991, the amount was pretty small, and overshadowed by an expensive divorce, so I really didn't keep good records.

Anyway, 1999-2025 gives me 27 years of data. Of those 27 years, I had losses in 7 of them. First, there was 2000/2001/2002, the only time I saw a drop three years in a row. Then there was 2008, the Great Recession. was also down in 2011...a whopping $628. Next up was 2018, and most recently, 2022.

So, my experience so far as been 7/27, or around 1 out of 4. I'm down so far in 2026. I also know I had a good year in 1998, but never bothered to calculate it, for some reason. So I guess we could bump it up to 8 out of 29, which is around 27.6%. Still, closer to 1 out of every 4, vs 1 out of every three years.

Hopefully this won't jinx things, but I guess you could make the correlation that 2026 so far is starting to feel a bit like 2008. The real estate market seems to be softening, and my invested assets are worth a bit less than they were in October the year before. But, it also feels a bit like the same time last year. After hitting a few new highs, my return this year is -4.07% so far. Last year, after hitting a few new highs, my return was -3.97% by 3/31/25.

I'm thinking that late 2021/early 2022 might have been a worse time to retire than 2008. While 2008 was bad, most of the pain, for me at least, was concentrated in the Sept/Oct/Nov timeframe. December was actually an upswing. Then there was that final bottom on 3/9/2009, and then it seemed like the market went nowhere but up.

In contrast, 2022 was pretty much bad the whole year, although it seemed like it really started dropping off after April. But then there was high inflation on top of that, so whatever your account balance was, it didn't go as far as it used to. And while 2023 ended on a high note, most of that was just clawing its way back from 2022's losses. And then there was a downturn in the late summer that wiped out most of the gains. So as a whole, the year really only redeemed itself in the final two months.

 

[COcheesehead]

I only have records going back to 2006. I have had two down years in that timeframe: 2008 and 2022.

 

[marko]

I only have records going back to 2006. I have had two down years in that timeframe: 2008 and 2022.

2008, 2018 (just a little) and 2022.

 

[Andre1969]

For 2018, it was just two months that got to me. October wiped out all of my gains for the year. Then December came along and took me negative, ending the year with a loss of about 7.2%.

 

[Tuirc]

Thanks all! I have 13 days vacation I’m planning to mostly burn between now and 5/4 as well so it will be easy street to make it.

I retire April 17th. I have 2 sick days I'm going to burn before that. I had 3 weeks vacation, burned one the week before last. I'm going to let them pay me for the other two for more cash on hand. Hopefully the dust up in Iran will be over soonish, before I need to tap anything from retirement accounts. I moved two years expenses to money market and CDs before all of this kicked off. So, I don't need to sell anything for living purposes. It's a tempting time for a Roth conversion though.

 

[Tuirc]

Current events?

Market is down around 5 - 6% and the US is involved in a limited military engagement with another nation. We're retiring this July with zero hesitation.

We also haven't watched the news besides business channels for the past 6 years. Don't need some bobblehead getting us all worked up over nothing.

Yeah, haven't watched that junk in more than a decade. Highly recommend for mental health improvement. Easy and no cost.

 

[ERD50]

... 2022 was the worst year in history for bonds. A 60/40 would have been walloped mercilessly. ...

I'm not sure what constitutes 'walloped mercilessly', but ficalc_dot_org ("_dot_" just to avoid the forum SW injecting a large preview block from their site) shows that for a 60/40 with a conservative 3.7% initial WR (reports 100% safe for 30 years @ 60/40) and 3 year period, a 2022 retirement would end 2024 at $885K, down $115K, of which $111K were the withdrawals. The trough was the 1st year, down to $780K - but we are in this for the long haul. And adding more recent data from testfol_dot_io , a 60/40 from 1/1/2025 would be up above the starting point.

 

[Diogenes]

I'm not sure what constitutes 'walloped mercilessly', but ficalc_dot_org ("_dot_" just to avoid the forum SW injecting a large preview block from their site) shows that for a 60/40 with a conservative 3.7% initial WR (reports 100% safe for 30 years @ 60/40) and 3 year period, a 2022 retirement would end 2024 at $885K, down $115K, of which $111K were the withdrawals. The trough was the 1st year, down to $780K - but we are in this for the long haul. And adding more recent data from testfol_dot_io , a 60/40 from 1/1/2025 would be up above the starting point.

It all depends on our goals. If our goal is to fund a decently dignified life for a 30-year stretch, then indeed, 2022 is not grievous setback, especially if we reduce the much-vaunted 4% withdrawal rate to 3.7% or slightly less.

But if our goal is to have say 2X as much, 30 years later, adjusted for inflation... then we run into a bit of a pickle. Then the bonds portion of the portfolio are a long-term drag, without providing SORR relief in a challenging year like 2022.

My point isn't to assert that we should never retire, or that no amount of money is "safe"... but that 2022 was a heck of a lot worse than is commonly admitted these days. 2022 really calls into question the whole 60/40 mantra. Sure, if we have a mere 30-year horizon and aren't concerned about growth or vitality beyond that, then there's no reason to manufacture additional stress or cause for argument; why torture oneself? But if we want to retire genuinely early - meaning >>30 year horizon - and crave the self-satisfaction of watching our money grow, throughout the remainder of our lives - well then, we have to reconsider the usual assumptions.

 

[ERD50]

... But if our goal is to have say 2X as much, 30 years later, adjusted for inflation... then we run into a bit of a pickle. Then the bonds portion of the portfolio are a long-term drag, without providing SORR relief in a challenging year like 2022.

Not sure how anyone can plan for a reasonable w/d and also have a goal of 2x inflation adjusted. It happens in many cases, but that's a product of the markets and the times.

2022 was a heck of a lot worse than is commonly admitted these days.

I guess I don't know where this comes from. There are a lot of people on this forum with a wide range of views. I'm not sure we can say what is 'commonly admitted' on this topic?

2022 really calls into question the whole 60/40 mantra. Sure, if we have a mere 30-year horizon and aren't concerned about growth or vitality beyond that, then there's no reason to manufacture additional stress or cause for argument; why torture oneself? But if we want to retire genuinely early - meaning >>30 year horizon - and crave the self-satisfaction of watching our money grow, throughout the remainder of our lives - well then, we have to reconsider the usual assumptions.

I don't think so. Run FIRECalc or ficalc-app with a 40 year horizon, like many have done.

Here's the results in FIRECalc, $1M start, investigate for 100% safe 40 years. I got 3.34%, default portfolio.

"A spending level of $33,413 provided a success rate of 100.0% (115 total cycles, of which 0 failed). This spending level is 3.34% of your starting portfolio."

 

[yakers]

Lost $ in 2008 (the year I retired), 2018, and 2022 about even in 2015. Portfolio growing faster than DW can spend it.

 

[AudreyClaude]

I too retired in Sept '25. The freedom to do what I want, when I want, without asking for permission from a supervisor is priceless. As long as you have "enough", it shouldn't matter about timing. If it's time to go, then jump and don't look back.

I would hate to go thru the anguish of OMY on a loop. Been there, done that!

My primary goal now is to maximize life experiences rather than accumulate more money that I will never spend during my lifetime.

Congratulations! Enjoy your retirement! What will be your plan to do daily?

 

[SouthernHeaven]

Congratulations! Enjoy your retirement! What will be your plan to do daily?

Daily plan? Exercise, eat good food, connect with loved ones who are 4000+ miles on the other side of the pond, and ponder on life’s greatest mysteries, you know….like why aren’t all sponges made of magic sponge

 

[Original Wally]

A Cautionary Tale. I was working for a Municipal Utility District in 1989. We had a guy, Bob, who had started way back in 1959 and was getting ready. At the time, was had a good CalPERS retirement plan AND a Section 457 plan. CalPERS pension was calculated on a number of factors: Age, Service Time and Salary. Bob was into the "one more quarter" mode: 1/4 of a year older + 1/4 of a year service time, AND he could sock away extra $$ into the 457 plan. JUST ONE MORE QUARTER ... then another ... then another. One day he had a MASSIVE heart attack, ending up with a transplant and a COMPLETELY DIFFERENT retirement than he had planned.

MY lesson? Don't stay a day longer than necessary. I got out @ 55 1/2 in 2009 and never regretted it.

 

[Andre1969]

I guess I don't know where this comes from. There are a lot of people on this forum with a wide range of views. I'm not sure we can say what is 'commonly admitted' on this topic?

I think the mainstream media tends to downplay 2022. I tend to call it the "Not-a-recession recession." By the typical definition of two consecutive quarters of negative growth, I don't think 2022 qualifies as a recession, but with the hurting it put on my portfolio, it sure felt like one! The unemployment rate was also low, so it wasn't like the typical recession where a lot of people get laid off. 2022 was also when real estate prices started taking off, around these parts at least. Good news if you were selling a house, not so good if you were buying!

Then, of course, there was the inflation, high gasoline prices, etc. I'd imagine people who were retired, close to retirement, and/or had large financial portfolios noticed it, and griped about 2022, more than those who were younger, had less to lose, and many more years to go. They'd notice the high inflation in everyday prices, but by and large they didn't have enough amassed to really notice the 20% or so dip that many of us took that year. At the bottom, I think it may have been more like 25%.

I was chatting with a younger friend just the other day, and he was lamenting about how much better things were 4 years ago. Of course, he has nothing invested, only a small savings account, so he's never experienced market swings. He conveniently forgot about how expensive gasoline was starting to get. I checked my records, and at this time in 2022, gasoline was about the same price. With two considerations. First, there's inflation, so $3.75/gal today isn't the same as $3.75 4 years ago. And on top of that, around this time, Maryland enacted a "gas tax holiday" for 30 days. That was a 36 cent-per-gallon savings right there.

But, 2026 is just getting started, so who knows how it will turn out. My invested assets were down 4.65% around this time in 2022. So far this year, I'm actually down a bit more, at a 5.69% loss. So, who knows how things will turn out.

 

[sdawson]

Well, count me in as one who retired into this downturn.

Feb 2nd, 2026 was my last work day. Age 62, so not super-early retirement, but still 5-8 years before I turn on Social Security, and 3 years before medicare. I am not one of those with multi-millions saved, so I am navigating this carefully -- as no one knows if this is just a 10-20% correction, or if it will develop into the 50% drop we saw in 2007-2009.

I plan on starting Roth conversions this year, which means transferring savings from 401K to TIRA then Roth IRA. i need to navigate that part carefully and quickly when I do it.

But am staying the course, enjoying my mornings at the YMCA, and my days with my wife, my books and garden, and have three camping trips planned this year. Two months in, and my days are relaxed and filled, with no desire to return to work. I would rather live frugally and have my time to do with as I desire than give up this new freedom.

 

[Lorenzo]

Well, count me in as one who retired into this downturn.

Feb 2nd, 2026 was my last work day. Age 62, so not super-early retirement, but still 5-8 years before I turn on Social Security, and 3 years before medicare. I am not one of those with multi-millions saved ....

Similar here. I hope you prepared for SORR better than I did.

 

[sdawson]

Similar here. I hope you prepared for SORR better than I did.

Wishing you good fortunes Lorenzo!

I have a mental bucket in cash. That is, 4 years worh of funds in a money market at 3.3% currently, but is in the pre-tax 401K and I can't draw from it directly. So will have to move funds from 401K to IRA which I can use as a short term bucket, and then rebalance the 401K. I think. Will be talking with Fidelity about it this week.

Also, we had 38K set aside in a brokerage account for a new camping truck this April. But am going to put that on hold, just had the discussion with my wife and she is on board putting off that purchase. She likes having me around the house. The truck is not a necessity, we can get along with our old minivan for our camping trips. That frees up 3K a month for a year if needed.