Your experience living through new highs

[4nursebee]

Hello,

So the market is at new highs, I don't recall this before. Excited yet have some fear.

Firecalc shows great success from here if we retire now, perhaps even dying with 5-10 times the money we have now. Can this really happen? Have you lived through previous new highs and seen your $$$ grow? Especially in retirement? If you retired having "x" amount of dollars, what portion of "X" do you still have, over what time frame?

30% higher from here is the FIRE point for me psychologically.

Thanks for sharing!

 

[bobandsherry]

What goes up can go down. Just be prepared and expect at some point. May be a month, may be a year. May be another decade.

 

[LOL!]

Yes, I have lived through new highs. For the stock market to make anyone money, it has to spend a significant fraction of the time at new highs. By definition. Get it?

I found this article which explains it:
https://tubofcash.com/how-often-is-the-stock-market-at-all-time-highs/

The S&P 500 has spent roughly 32% of its life within 5% of its (up to then) all time high and 24% of its life within 2% of its (up to then) all time high. That’s often!

This is also why one should keep buying even if market is at/near all-time high. It's just routine.

 

[marko]

Careful.

FireCalc and the market are two different things and only connected via long, long, long term market behavior.

Markets go up and down. Net worth goes up and down. FireCalc covers both up and down markets in its calculations and leans conservative but a bad year or two in the current market won't register much in FC's numbers.

Personally, our NW is about 3.5X what it was in 2006 when we RE'd, despite '08 and 3%-5% withdrawals. But the last 9 years have been exceptionally good investment-wise.

There's been discussion here about it being most likely that many of us will leave this earth with notably more than we started with but the math between under spending and overspending is a very fine line when projected out 20 or 30 years.

 

[frayne]

Been in the market since 1975 and I've seen fire and I've seen rain and I've seen sunny days that I thought would never end. My advice is stick to your savings plan and rebalance your AA at least annually or anytime it gets out of whack by 5% or more. Use firecalc as a guide not a holy grail. It is relatively easy to know how much you will need in your retirement if you know what you're going to be spending. I retired in 2005 and my principal is up by at least 25% last I looked. I've maintained pretty much a 60/40 AA through the period and the majority of the 60% is in index funds.

 

[RobbieB]

I tell ya, I keep blowing more and more dough in an effort to decrease my net worth but it just ain't happening.

Gotta blow more dough!

 

[GravitySucks]

Yes, I have lived through new highs. For the stock market to make anyone money, it has to spend a significant fraction of the time at new highs. By definition. Get it?

I found this article which explains it:
https://tubofcash.com/how-often-is-the-stock-market-at-all-time-highs/


This is also why one should keep buying even if market is at/near all-time high. It's just routine.

+1
I retired in 2013 and every year has had new highs, even in 2015, which was not a great year, the SP 500 was at new highs in first quarter.

 

[cranberryjoe]

I retired 5 years ago with x dollars. Today I have 2x dollars.

 

[4nursebee]

Thanks everyone, keep it coming.
Longer retirees, please do weigh in.

 

[MRG]

Been there done that.

Things looked great in 1998. They looked even better in 2006. Stuff changes quickly and can take a while to come back.

Don't forget to stay calm.

 

[4nursebee]

Been there done that.

Things looked great in 1998. They looked even better in 2006. Stuff changes quickly and can take a while to come back.

Don't forget to stay calm.

OK, what about you and your data?

 

[Rianne]

I always adjust down Firecalc to 200K-300k and do the long term outlook. Adjust starting portfolio to worse case scenario (within reason). As quickly portfolio goes up, it can come down so when it comes down the panic lessens. I have the lower numbers in my head so I don't get immediate anxiety.



When our income was good (200K) we lived as though it were 1/2 that. Put the rest in a place we forgot about. We can always live on less. 5% of 1M is 50k, can we live on $25K plus SS? Yeah, that's 55K. Scrambling numbers around makes me feel comfortable with worse scenarios. BTW our portfolio is twice the example, not rich but comfortable, I mean, how much do you need?

 

[6miths]

Been in the market since 1975 and I've seen fire and I've seen rain and I've seen sunny days that I thought would never end. My advice is stick to your savings plan and rebalance your AA at least annually or anytime it gets out of whack by 5% or more. Use firecalc as a guide not a holy grail. It is relatively easy to know how much you will need in your retirement if you know what you're going to be spending. I retired in 2005 and my principal is up by at least 25% last I looked. I've maintained pretty much a 60/40 AA through the period and the majority of the 60% is in index funds.

Not as long but definitely long enough to see a few tornadoes and hurricanes. Regression to the mean can be a b#tch especially after 10 years of [possibly artificial] up. I'm not ditching my rain gear but at this point it doesn't matter much to me. I'm quite content to rebalance and dance with who brung me.

 

[MRG]

OK, what about you and your data?

Since retiring in 13 our assets have increased by 30%. I don't count on that. This market can go South for a few decades as far as I know.

 

[Amethyst]

We are 5 feet 7.5" and 6 feet 2". That long enough for you?

We live on our pensions, with the investments providing $$ for large expenses (desired, and not-so-desired ones). We would still have the same # of shares even if the market tanked, so presumably, we'd still be getting dividend income (unless the boards voted to cut dividends).

Thanks everyone, keep it coming.
Longer retirees, please do weigh in.

 

[Major Tom]

Nearly all of us who retired in the last 9 or 10 years, and who were invested in equities, have seen our NW's increase. It took very little skill on our part - we were just lucky to have began portfolio withdrawals at an opportune time.

There's always a chance that you'll begin withdrawing from your portfolio just before, or at the beginning of, a prolonged downturn. As a result, the first few years of your retirement could feel significantly more rocky than it felt for those of us who just sat by and watched our portfolios go up and up in value, as we congratulated ourselves on our remarkable prowess and excellent luck.

I guess it all comes down to your tolerance for risk and volatility. If you're lucky enough to be able to live on a particularly conservative WR, then it won't bother you too much at what point in a market cycle you retire. Blessed is the person who can live on 2% or less. As your WR edges upward towards, say, 3.5 and 4%*, and perhaps even (gulp) beyond, these things start to matter a lot more.


*These percentages assume no other source of retirement income. Adjust accordingly.

 

[HarveyS]

retired 47 months ago. Net worth was X dollars. Is 1.44X today.
AA approx 75/25 equity/bond.

 

[joeea]

So the market is at new highs, I don't recall this before.

Is this your first year investing? Or your first year paying attention?

Lots of market highs in the past. Nothing new here.

 

[Souschef]

Thanks everyone, keep it coming.
Longer retirees, please do weigh in.

I have been retired since early 2009, and every year my RMD goes up, even after I take the previous RMD

 

[scrabbler1]

I retired in late 2008 as the markets were crashing. I set up my ER so I would be able to live off only the dividends from the taxable portion of my total portfolio, and I have been able to stick to that (annual SWR=~2%, on average). Even with that, the taxable portion of my total portfolio has risen by just over 50% in the last 10 years.


The rollover IRA, meanwhile, has risen nicely on its own, by 150% in the last 10 years. Steady rebalancing has allowed me to lock in some of the gains on the stock side while the bond side has nearly tripled in that time, about 2/3 of that gain due solely to rebalancing. The stock fund side has still more than doubled despite all the rebalancing out of the stock fund and a slightly bigger bond AA in the last 10 years.

 

[Oz investor]

i used to race bicycles,

if there is one thing more exciting than a nice descent , it is the same descent in the DARK ( and yes i do mean as fast as you can )

and the doctors think i am joking about being suicidal at 18 ( years of age )

 

[gcgang]

Wheeeeeeee!!!

 

[canuck5]

My wife and i will both be 62 next month and will be completely retired by the end of the year. We've always been LBYM, saved as much as we could and never tried to time the market.

We've seen lots of new highs over our time and some scarey lows. We first started to invest, in the spring of 1987. Our meager investment was 50% by that fall. Got serious about investing in 1994 and have kept after things, ever since. There have been a lot of ups and downs initiated by factors outside the USA and a few inside.

I anticipate seeing the same curve in retirement that I've seen over the last 24 years, minus my annual adding to the investment. All the "points" are where my investments were at the start of they year and what "scary" things might have occurred, during that year.

 

[brett]

Excellent returns coupled with low inflation for the past 5/6 years of retirement. We were good to go then but sequence of returns has sweetened the pot.

Cutting back a little on our allocations. Taking some profit. Should there be a collapse we want to protect our position but also be able to re enter a price attractive market.

 

[lem1955]

I retired in December 2015. My withdrawals were 3.72% of portfolio in 2016, 7.57% in 2017, and 4.55% in 2018. Asset allocation 62/38 (with ROTHs at 80/20, Trad IRA's at 60/40). I have two years expenses in CD's within the Trad IRA. Portfolio is 9.5% larger than when I retired. I don't plan to take SS until age 70. I'm 63 now. I will take less from the portfolio in the future if the market dips, but will continue to feel free with the money if growth keeps up with my current spending. My DW is 72. We are in good health and want to travel, help support kids and grandkids while we can.