A retiree's personal experience...

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tennisplyr
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A retiree's personal experience...

Post by tennisplyr »

I retired @61 early in 2011 in the midst of the current bull market. DW retired early in 2014. We both have been collecting SS since turning 62 and have been withdrawing 4-5% from our 50/50 AA portfolio since I retired. Our portfolio remains up roughly 10% overall since I retired. I guess history would say I am much better off starting retirement in a bull market than in a bear market.....so far, so good. For those doubters, keep the faith! I'd be curious to hear from others.
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
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Re: A retiree's personal experience...

Post by Sbashore »

I retired in late 2005. My current average draw from my 50/50 portfolio is around 5%. My median annual return since I retired has been around 10%. Seeing how I retired right between two rather severe down events in the stock market I have no complaints. :beer
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sambb
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Re: A retiree's personal experience...

Post by sambb »

experience may differ if one retires at height of a bull market, and then there is a severe downturn
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Re: A retiree's personal experience...

Post by jebmke »

sambb wrote:experience may differ if one retires at height of a bull market, and then there is a severe downturn
Yes. I retired December, 2007. :shock:
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: A retiree's personal experience...

Post by retiredjg »

Me too. Retired in summer of 2007, just before the crash which started a few months later. People think the crash was in 2008, but it started in October 2007. Withdrew 2.5% to 3.5% through the crash.

It took my portfolio FOREVER to get back to pre-crash balance and it has not really ever gone over the pre-crash balance much since then. I did a little extra spending in 2014 which might account for some of that. But mostly, retiring into a crash and withdrawing all the way through it can really slow things down.

I'm not too worried. I'm comfortable and can tighten the belt if it comes to that, but I hope I don't have to.

If you find you face a similar situation, don't underestimate how slow the recovery will be. People who are still accumulating will be back to "normal" in a few years and you'll still be waiting for awhile, maybe even a couple more years.
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Re: A retiree's personal experience...

Post by rai »

To retiredjg, anything obvious you would have done differently? I don't mean looking backwards and rebalance all to stock after the crash. But something such as had 1-2 years of spending in one bucket (cash or short term bonds or CDs) and not sold any stocks as the marked turned south?
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair
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Re: A retiree's personal experience...

Post by rai »

tennisplyr wrote: We both have been collecting SS since turning 62 and have been withdrawing 4-5% from our 50/50 AA portfolio since I retired. Our portfolio remains up roughly 10% overall since I retired. I guess history would say I am much better off starting retirement in a bull market than in a bear market.....so far, so good. For those doubters, keep the faith! I'd be curious to hear from others.
Was curious to your thinking of taking the SS early? It's my understanding you are taking 75% of projected benefits.
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair
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Re: A retiree's personal experience...

Post by retiredjg »

rai wrote:To retiredjg, anything obvious you would have done differently? I don't mean looking backwards and rebalance all to stock after the crash. But something such as had 1-2 years of spending in one bucket (cash or short term bonds or CDs) and not sold any stocks as the marked turned south?
I can't say I would have done anything differently. Some of that is because I would not have done anything differently and some is because I didn't know back then to re-balance bonds into stocks as the market went down. I knew not to sell out my stocks in fear and that's about all I knew and that is about all I did other than trim luxury spending a bit.

At the time, I was selling about 1 year's worth of stuff and putting it in money market and spending out of that fund for the year. Next January, same thing. I did cut back on what I considered luxury - such as a trip to France - I chose not to go. But other than that, I didn't cut back on spending a great deal. I also didn't do anything unnecessary like a remodel or buying a new car. But since I didn't need either of those, it was not much to give up.

I considered putting several years' worth of money in money market, then a poster who no longer posts pointed out that if you only sell 3% and since not all of that is stocks, that selling 3% of the portfolio is not something to be afraid of because it is such a tiny amount. So I quit holding the year's worth of money in money market and just started selling either stocks or bonds, whichever I had too much of.

Looking back, if I had been thinking of keeping my stock to bond ratio intact, I would have only been selling bonds anyway as the market crashed. So the whole idea of "don't sell stocks in a crash" doesn't even come into play if you are trying to maintain your stock to bond ratio during a crash because you won't be selling stocks, you'll be selling bonds! Duh.

If the same thing happens again, and I'm sure it will, I will again cut out luxury spending. Next time, I plan to rebalance into stocks all the way down. And I will continue to sell whatever I need to for living expenses.

But I still expect the result to be the same - a portfolio cannot grow if you are spending part of it and the market is crashing. So I will expect the recovery to be very slow - at least a couple of years after accumulators say "I'm back!"

And I suppose that is all OK. :happy
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Re: A retiree's personal experience...

Post by rai »

retiredjg wrote:
But I still expect the result to be the same - a portfolio cannot grow if you are spending part of it and the market is crashing. So I will expect the recovery to be very slow - at least a couple of years after accumulators say "I'm back!"

And I suppose that is all OK. :happy
not much to do, the dividends of stocks/bonds are in the 2-3% range, you were only selling 2-3% of the total (I suppose) to make up the 5% withdrawal.

I'm not retired, so it's a whole different ball game as you are aware, I was putting tons of money into a rebounding market as opposed to taking money out.
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair
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Re: A retiree's personal experience...

Post by Sheepdog »

Good for you. Good for me, too, I guess. I am almost 82. I retired in late 1998 during a bull market, thankfully. I took SS at 65 and my wife at 62. I went through the 2000-02 and 2007-08 "crashes" and recovered okay. I have taken out an average of 4.52% a year My portfolio is up about 10%. 8-)
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Re: A retiree's personal experience...

Post by tennisplyr »

rai wrote:
tennisplyr wrote: We both have been collecting SS since turning 62 and have been withdrawing 4-5% from our 50/50 AA portfolio since I retired. Our portfolio remains up roughly 10% overall since I retired. I guess history would say I am much better off starting retirement in a bull market than in a bear market.....so far, so good. For those doubters, keep the faith! I'd be curious to hear from others.
Was curious to your thinking of taking the SS early? It's my understanding you are taking 75% of projected benefits.
There are tons of viewpoints on this. My personal reason was that I wanted/needed the money now, who knows how long I will live. Studies show that twothirds of Americans collect early so I'm not that unusual. Also I have no pension. So far I'm up over $100,000.
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
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Re: A retiree's personal experience...

Post by tennisplyr »

retiredjg wrote:
rai wrote:To retiredjg, anything obvious you would have done differently? I don't mean looking backwards and rebalance all to stock after the crash. But something such as had 1-2 years of spending in one bucket (cash or short term bonds or CDs) and not sold any stocks as the marked turned south?
I can't say I would have done anything differently. Some of that is because I would not have done anything differently and some is because I didn't know back then to re-balance bonds into stocks as the market went down. I knew not to sell out my stocks in fear and that's about all I knew and that is about all I did other than trim luxury spending a bit.

At the time, I was selling about 1 year's worth of stuff and putting it in money market and spending out of that fund for the year. Next January, same thing. I did cut back on what I considered luxury - such as a trip to France - I chose not to go. But other than that, I didn't cut back on spending a great deal. I also didn't do anything unnecessary like a remodel or buying a new car. But since I didn't need either of those, it was not much to give up.

I considered putting several years' worth of money in money market, then a poster who no longer posts pointed out that if you only sell 3% and since not all of that is stocks, that selling 3% of the portfolio is not something to be afraid of because it is such a tiny amount. So I quit holding the year's worth of money in money market and just started selling either stocks or bonds, whichever I had too much of.

Looking back, if I had been thinking of keeping my stock to bond ratio intact, I would have only been selling bonds anyway as the market crashed. So the whole idea of "don't sell stocks in a crash" doesn't even come into play if you are trying to maintain your stock to bond ratio during a crash because you won't be selling stocks, you'll be selling bonds! Duh.

If the same thing happens again, and I'm sure it will, I will again cut out luxury spending. Next time, I plan to rebalance into stocks all the way down. And I will continue to sell whatever I need to for living expenses.

But I still expect the result to be the same - a portfolio cannot grow if you are spending part of it and the market is crashing. So I will expect the recovery to be very slow - at least a couple of years after accumulators say "I'm back!"

And I suppose that is all OK. :happy
Agree totally
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
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Re: A retiree's personal experience...

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This thread is now in the Personal Finance (Not Investing) forum (retirement planning).
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Re: A retiree's personal experience...

Post by Grt2bOutdoors »

tennisplyr wrote:I retired @61 early in 2011 in the midst of the current bull market. DW retired early in 2014. We both have been collecting SS since turning 62 and have been withdrawing 4-5% from our 50/50 AA portfolio since I retired. Our portfolio remains up roughly 10% overall since I retired. I guess history would say I am much better off starting retirement in a bull market than in a bear market.....so far, so good. For those doubters, keep the faith! I'd be curious to hear from others.
Curious....what did you do for health insurance when you retired before the Medicare age? Did your former employer offer retiree healthcare or did you purchase insurance in the open market? I say I'm curious because health insurance is very expensive even when working, I can't imagine what it's like in retirement.
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Re: A retiree's personal experience...

Post by kolea »

Grt2bOutdoors wrote: Curious....what did you do for health insurance when you retired before the Medicare age? Did your former employer offer retiree healthcare or did you purchase insurance in the open market? I say I'm curious because health insurance is very expensive even when working, I can't imagine what it's like in retirement.
I retired at 62 and have had COBRA for 18 months from my employer. It will end shortly and I am going to switch to private insurance. COBRA premiums are costing me $550/month and had $0 deductible and 20% coinsurance, and is a Blue Cross plan so it covers multiple states (important to us since we snow-bird). I contacted my COBRA insurer and the closest private plan they have to what I have now will cost about $800/month. I can get on my wife's retirement insurance plan she has through her former work for only $200/month and has a deductible of $2500. That is a better deal though since the premiums are still less than the deductible and is what I will likely do. But even so, I am still tempted to stay with my COBRA provider since they never blinked an eye at paying for a major (and expensive) illness I had. I am not sure how this new provider will treat me if misfortune strike again.

One thing to be aware of - insurance is cheaper/easier if you have continuity in coverage. If you let one lapse before you start another, you will pay through the nose. So apply for new coverage long before the former coverage ends.
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Re: A retiree's personal experience...

Post by likegarden »

I retired at 62 in 2002, but then worked part time until 2009. We took SS at 65/66 yrs of age. We have SS and a pension, take out 2% out of savings, and have no problems.
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Re: A retiree's personal experience...

Post by midareff »

Retired at 64 in early 2012. SS at 65. Wife retired in 2011 at 49. The bull has been extremely kind and our $ withdrawn has steadily increased to the current 3.2%. I'm writing this AM from the Amsterdam Hilton. Germany, Austria, Slovakia, Hungary and the Czech Republic to follow. When we get back I expect to withdraw enough from taxable funds to fund MM and to purchase CD's to provide retirement funding through first RMD in 2018. In a real crunch we could live on my pension and SS, but I would not be writing from Amsterdam...... and yes, it's raining at the moment. :sharebeer
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Re: A retiree's personal experience...

Post by Grasshopper »

I retired at 54 in 2006, sold my home at the top of the market, bought my new home at the top of the market. I was sitting on a bunch of cash from the home sale, remember 5% MMFs, so I did OK in 2007. I don't have a SWR but back figuring averages around 2.5%. My portfolio is up 25% from the day I retired RE not included. :beer
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Re: A retiree's personal experience...

Post by TravelforFun »

midareff wrote:Retired at 64 in early 2012. SS at 65. Wife retired in 2011 at 49. The bull has been extremely kind and our $ withdrawn has steadily increased to the current 3.2%. I'm writing this AM from the Amsterdam Hilton. Germany, Austria, Slovakia, Hungary and the Czech Republic to follow. When we get back I expect to withdraw enough from taxable funds to fund MM and to purchase CD's to provide retirement funding through first RMD in 2018. In a real crunch we could live on my pension and SS, but I would not be writing from Amsterdam...... and yes, it's raining at the moment. :sharebeer
Congratulations, midareff. Amsterdam is one of the places I have not been to. Out of curiosity, since your wife is 14 years younger than you, were there reasons why you didn't want to wait until 70 to withdraw SS so that your wife could receive a bigger survivor's benefit for potentially a long time?
Last edited by TravelforFun on Sun Jul 19, 2015 12:06 pm, edited 1 time in total.
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Re: A retiree's personal experience...

Post by 1210sda »

Sbashore wrote:I retired in late 2005. My current average draw from my 50/50 portfolio is around 5%. My median annual return since I retired has been around 10%. Seeing how I retired right between two rather severe down events in the stock market I have no complaints. :beer
Thank you for sharing.

Two questions: 1) What asset allocation did you have that generated a 10% return for 2005 thru 2014?
2) Why did you use median instead of CAGR? (compound annual growth rate)?

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Re: A retiree's personal experience...

Post by CABob »

jebmke wrote:
sambb wrote:experience may differ if one retires at height of a bull market, and then there is a severe downturn
Yes. I retired December, 2007. :shock:
I retired in 2002 and my wife in 2004. We survived 2007-2009 and recovered what we had lost reasonably soon afterwards. From that point forward the portfolio has grown including some RMDs and is near its highpoint since retirement.
Bob
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Re: A retiree's personal experience...

Post by LarryG »

I retired 12/31/1998. My withdrawal rate from a 50%/50% portfolio (at start) has averaged 4.9%. The value of the portfolio is 4.1% higher than the date of retirement.
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Re: A retiree's personal experience...

Post by tennisplyr »

Grt2bOutdoors wrote:
tennisplyr wrote:I retired @61 early in 2011 in the midst of the current bull market. DW retired early in 2014. We both have been collecting SS since turning 62 and have been withdrawing 4-5% from our 50/50 AA portfolio since I retired. Our portfolio remains up roughly 10% overall since I retired. I guess history would say I am much better off starting retirement in a bull market than in a bear market.....so far, so good. For those doubters, keep the faith! I'd be curious to hear from others.
Curious....what did you do for health insurance when you retired before the Medicare age? Did your former employer offer retiree healthcare or did you purchase insurance in the open market? I say I'm curious because health insurance is very expensive even when working, I can't imagine what it's like in retirement.
Agree....fortunate to be on my wife's early retirement plan.
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
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Re: A retiree's personal experience...

Post by Toons »

Retired 4 years ago.
Entered retirement debt free.
60/Spouse 56
Saved and Invested for decades.
Was 90/10 stock bond until 2011,then have gradually reallocated to 75/25 now.
So far we have not HAD to draw from our investments,during retirement ,although I will take dividends in cash taxable accounts now as I had been reinvesting them for many years.
Portfolio is up about 42% since 2011
Regarding Health Insurance we have been using Company Retiree Insurance.
Turning 65 this year will have me becoming ineligible.Spouse will still qualify.
Medicare and Medigap G plan recently purchased will work for me.
Looks like we will be spending approx. 200.00 less for Health Insurance for the both of us :happy
Last edited by Toons on Sun Jul 19, 2015 5:28 pm, edited 3 times in total.
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Re: A retiree's personal experience...

Post by montanagirl »

I "retired" in Feb 2014 when I was laid off after 19 years of service. I had just turned 65 so had no worries about health insurance. All my savings were from those 19 years. I started retirement saving at 45 with a lot of debt and I think I did pretty well, considering my past indolence.

I haven't touched my retirement savings yet, just doing Roth conversions while getting spousal SS, playing music part time and doing some seasonal tax work. I don't need to do anything, really.

It's fun learning how to goof off..
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Re: A retiree's personal experience...

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montanagirl wrote:It's fun learning how to goof off..
Great!
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Re: A retiree's personal experience...

Post by blueblock »

I retired at the end of April, at 63, and am taking early SS.

The reason I opted for early payment is that, four years ago, I was diagnosed with a congenital heart defect that may or may not require surgical intervention. So I figured that by applying early I'd at least get something back if I kick off sooner rather than later.

Here's my plan: I've got my 2015 "SS supplemental income" in checking, my 2016 "SSSI" in my savings account, and my 2017 "SSSI" in my IRA, in a money market fund. (Which is to say, when I rolled over my 401K to a self-managed IRA (45/55; 3-fund portfolio), I kept a chunk un-invested.) Which may seem less than optimal, but liquidity is important to me, I want to keep it simple, and I don't want to be forced to sell in a down market.

I also have other taxable and non-taxable investments, but I'm ignoring those. You could call them my emergency funds.

I, too, am using COBRA ($630). I'll need to find a 6-month bridging plan when that ends to when I turn 65 and am eligible for Medicare.
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Re: A retiree's personal experience...

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[Edit: Deleted; wrong thread.]
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Re: A retiree's personal experience...

Post by mickeyd »

Retired about 10 years ago. We have lived on DB/SSA income streams as they provide more than enough to pay all of our expenses so far. I will make my first RMD this year and will have the opportunity to have to decide what to do with all of that $.

As I once read on this site~ "RMD is a requirement to pay taxes, not a requirement to spend $."
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Toons
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Re: A retiree's personal experience...

Post by Toons »

mickeyd wrote:Retired about 10 years ago. We have lived on DB/SSA income streams as they provide more than enough to pay all of our expenses so far. I will make my first RMD this year and will have the opportunity to have to decide what to do with all of that $.

As I once read on this site~ "RMD is a requirement to pay taxes, not a requirement to spend $."
Well,,,after crunching some numbers I better be prepared to use a lot of my RMD payout when I reach that age ,,,,
To pay taxes. :happy
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Re: A retiree's personal experience...

Post by SeeMoe »

Retired for 2 decades with good pensions, no bills and we used to take big vacations , still buy quality vehicles every 3 years, moved into a 5 star CCRC too...Most thanks to Vanguard Investments !
Recently contracted with Vanguard Group to manage our accounts, what a relief that is for us, after 35 years investing,..!!!
Only tap our investments for big ticket items, and our manager does that(tapping) for us tax efficiently .
Only take The AutoTrain with roomette now to S.W. Florida in winter,..Driving there is tedious for us..
Very thankful for Vanguard, John Bogle, Louis Reukeiser and Harry Gross for their sage advise over the years too,..33.
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Re: A retiree's personal experience...

Post by scotthal »

Retired (laid off) @age 54, early '08. Intervening market hiccups triggered some anxiety & increased equity exposure, but after 7+ years of retirement draws, portfolio is still up ~50% since I caught the boot... ummm... gracefully (?gratefully) exited the rat race. No pension, small annuity (covers health insurance), figure I'll hold off on social security until age 70.
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Peter Foley
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Re: A retiree's personal experience...

Post by Peter Foley »

I retired in 2012 at age 61.5 and my wife retired from her day job a couple months later at age 56. (She consulted in her field for about 2 years after retiring.) We had ridden out the great recession quite well and I became slightly more conservative as we moved out the recession in 2010 and 2011 - rebalancing on the way up. About 6 months prior to retirement we went to about 45/55 as we had achieved our savings goal by a wide margin and could afford to give up some future growth for additional safety. The market has brought us back to roughly 50/50. We both plan to delay SS until age 67 or 68. We've been spending heavily the past couple of years funding grandchildren's 529 plans. That will slow this year. I expect we will have a couple of years of 2% to 3% withdrawals before taking SS. At that point our withdrawals likely will not exceed 2%. Once we are both taking SS my guess is our withdrawal rate will fall to about 1%. We live modestly, a habit that is hard to break. Maybe we will start flying first class . . . No! Economy comfort - yes.

Only with hindsight would I do anything differently. I would not have rebalanced as the market recovered and would have done much better. On the other hand, had we not had such a strong recovery I might have had to work another year.

One cannot predict the future and I have no regrets as to how things turned out.
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Re: A retiree's personal experience...

Post by TravelforFun »

Peter Foley wrote:We live modestly, a habit that is hard to break. Maybe we will start flying first class . . .
Start flying first class or your heirs will. :happy
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Re: A retiree's personal experience...

Post by SpaceCowboy »

TwoByFour wrote:One thing to be aware of - insurance is cheaper/easier if you have continuity in coverage. If you let one lapse before you start another, you will pay through the nose. So apply for new coverage long before the former coverage ends.
This is false. In the Obamacare era insurance rates purely depend on age. Past medical history or insurance history are not considered. One of the many improvements provided by the ACA that make early retirement much more feasible.
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Re: A retiree's personal experience...

Post by kolea »

rrppve wrote:
TwoByFour wrote:One thing to be aware of - insurance is cheaper/easier if you have continuity in coverage. If you let one lapse before you start another, you will pay through the nose. So apply for new coverage long before the former coverage ends.
This is false. In the Obamacare era insurance rates purely depend on age. Past medical history or insurance history are not considered. One of the many improvements provided by the ACA that make early retirement much more feasible.
It is not false, but thanks for the comment. Your comments are correct for individual insurance but group policies are not governed the same by ACA. I have the option of buying an extension to COBRA (a group plan) or joining my wife's retirement insurance plan (another group plan). Both told me I will lose eligibility if I have any lapse in coverage. In the case of extending COBRA, the insurer told me if I lose eligibility I could go to an equivalent individual plan at a higher rate.
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Re: A retiree's personal experience...

Post by midareff »

TravelforFun wrote:
midareff wrote:Retired at 64 in early 2012. SS at 65. Wife retired in 2011 at 49. The bull has been extremely kind and our $ withdrawn has steadily increased to the current 3.2%. I'm writing this AM from the Amsterdam Hilton. Germany, Austria, Slovakia, Hungary and the Czech Republic to follow. When we get back I expect to withdraw enough from taxable funds to fund MM and to purchase CD's to provide retirement funding through first RMD in 2018. In a real crunch we could live on my pension and SS, but I would not be writing from Amsterdam...... and yes, it's raining at the moment. :sharebeer
Congratulations, midareff. Amsterdam is one of the places I have not been to. Out of curiosity, since your wife is 14 years younger than you, were there reasons why you didn't want to wait until 70 to withdraw SS so that your wife could receive a bigger survivor's benefit for potentially a long time?
There are a few reasons. First, not knowing what the market would do I didn't want too accelerate the use of the liquidity in taxable. Second, when wife retired from an advertising agency in BKK it was because she could, not because of us.... we are relative newly weds... 2010 in BKK, 2012 in USA. She probably will not stay in the US after I pass and she will have more than adequate resources between her assets and what's left from mine to live a long comfortable life in BKK.
frisbee
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Joined: Tue Jan 06, 2015 8:02 am

Re: A retiree's personal experience...

Post by frisbee »

Thought I'd share my personal story--

In July 2007 I "retired" at the age of 34 with the intention of backpacking/travelling for 5-7 years - I had worked & super-saved for 14 years and had enough assets to do so comfortably.

I wasn't a Boglehead, because had I been, I would have known to invest my travel money as if I were retiring, and put it into stable income funds. I rode the crash down to the bottom, all the while withdrawing & spending deeply discounted money. At the end of the day, it didn't matter - I learned to travel cheaper, but it was annoying. For the record, I was off 6yr10mo, and now am back in supersave mode, planning my real retirement.

What I learned: If you need a defined amount of cash in the near future, put it into a safe investment.
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SeeMoe
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Location: Near Philly..

Re: A retiree's personal experience...

Post by SeeMoe »

Stay loose, and stay the course they tell us . Been retired for 2 decades now . Wish I still had the sweet taste of freedom I had during the first says and weeks back then,...Kept investing and living(well)off our pensions . Now we just coast along putting the extra cash in Limited t.e. Bonds or mm . Are at 45/55 , not counting about $30 k in a bank account for short term spending needs,...take RMDS end of each year 1x. Keep IRAs in bond funds . Works okay..
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}
Dandy
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Re: A retiree's personal experience...

Post by Dandy »

I retired in 2008 at 60 just before the crash. :oops: I drew from savings to supplement my decent pension. I have ridden the bull market so far in retirement. I think it has given me a false sense of wealth and well being. While in theory I know that a market correction will drop my assets quite a bit even with a 40/60 allocation - I didn't feel much pain until yesterday - seeing your assets take a big hit and also withdrawing from those assets is a bit of a new retirement experience.

I am in good shape but it was still instructive to experience the asset drop rather than the theory of what could happen. It made me glad I am 40/60, using Wm Bernstein's approach of have enough "safe" assets, and having all TIRA retirement equities in balanced funds so the rebalancing is automated.
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