Do retired Bogleheads have rising net assets?

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mt
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Do retired Bogleheads have rising net assets?

Post by mt » Mon Feb 02, 2015 5:15 pm

For Bogleheads who are retired, have your assets grown or declined in value? Please state your SWR when answering.

I would imagine since the nadir of the last bear market in 2009 I would imagine many have noticed a rise in assets. It would be particularly interesting to hear from those who had retired prior to 2009.

Thanks.

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BTDT
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Re: Do retired Bogleheads have rising net assets?

Post by BTDT » Mon Feb 02, 2015 5:26 pm

Retired last year and assets still rising but trying to learn to spend more :oops:
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jfn111
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Re: Do retired Bogleheads have rising net assets?

Post by jfn111 » Mon Feb 02, 2015 5:39 pm

Just finished my 3rd full year of retirement. 401k assets have increased about 20%. SWR under 3%.

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Re: Do retired Bogleheads have rising net assets?

Post by Carefreeap » Mon Feb 02, 2015 5:48 pm

SWR? Savings Withdrawal Rate?

If so it's hard for me to calculate. We have been living on oil royalties and dividend earnings from our taxable account. We're currently 56 and 53 and haven't wanted to tap into the retirement accounts yet.

Assets have really grown since we retired 2.5 years ago but that hasn't been hard since equities in general (stocks and real estate) have really bounced back.
Last edited by Carefreeap on Mon Feb 02, 2015 5:52 pm, edited 1 time in total.

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Re: Do retired Bogleheads have rising net assets?

Post by Sheepdog » Mon Feb 02, 2015 5:50 pm

I have been retired since 1998 (16 years) so I have gone thru 2 major downturns. I have taken out an average of 4.56% a year. The total of my invested assets has risen 7%

edit: Calculated the growth of total assets.
Last edited by Sheepdog on Mon Feb 02, 2015 6:02 pm, edited 2 times in total.
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Duckie
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Re: Do retired Bogleheads have rising net assets?

Post by Duckie » Mon Feb 02, 2015 5:52 pm

mt wrote:For Bogleheads who are retired, have your assets grown or declined in value? Please state your SWR when answering.
I retired in 2006. My portfolio has gone up roughly 60% since then. I have a pension and my SWR is basically 0%.
Carefreeap wrote:SWR? Savings Withdrawal Rate?
Safe withdrawal rates

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Re: Do retired Bogleheads have rising net assets?

Post by ubermax » Mon Feb 02, 2015 6:05 pm

Retired in '09 and assets have bettered expenses every year & at last glance even YTD my a small amount , <4% SWR - Go PATS !!!!

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Re: Do retired Bogleheads have rising net assets?

Post by Carefreeap » Mon Feb 02, 2015 6:14 pm

Duckie wrote:
mt wrote:For Bogleheads who are retired, have your assets grown or declined in value? Please state your SWR when answering.
I retired in 2006. My portfolio has gone up roughly 60% since then. I have a pension and my SWR is basically 0%.
Carefreeap wrote:SWR? Savings Withdrawal Rate?
Safe withdrawal rates
Hmmm interesting term. I'm not sure how we would possibly calculate the "safe" part of the withdrawal.

We're living on taxable earnings and haven't dipped into principal yet. That is likely to change this year because of the drop in our oil royalties.

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Re: Do retired Bogleheads have rising net assets?

Post by hicabob » Mon Feb 02, 2015 6:22 pm

jvclark02 wrote:Retired last year and assets still rising but trying to learn to spend more :oops:

Ditto - the learning to spend more part is surprisingly hard. My SWR turned out at a ridiculous 1% last year.
Last edited by hicabob on Mon Feb 02, 2015 6:26 pm, edited 1 time in total.

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Re: Do retired Bogleheads have rising net assets?

Post by DVMResident » Mon Feb 02, 2015 6:24 pm

Sheepdog wrote: Re: Do retired Bogleheads have rising net assets?
by Sheepdog » Mon Feb 02, 2015 6:50 pm

I have been retired since 1998 (16 years) so I have gone thru 2 major downturns. I have taken out an average of 4.56% a year. The total of my invested assets has risen 7%

edit: Calculated the growth of total assets.
Thank you for your numbers. It really puts a perspective on the ultra-low SWR threads.

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Re: Do retired Bogleheads have rising net assets?

Post by dratkinson » Mon Feb 02, 2015 6:32 pm

Retired. Pension. Distributions cover ~half my COL but withdrawing 0%, thanks to pension. Assets rising at market rates based on AA. The trick is to live below your means.
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Re: Do retired Bogleheads have rising net assets?

Post by Grasshopper » Mon Feb 02, 2015 6:35 pm

Also retired in 2006 @ 54, SWR around 2%, we don't really track it because we only spend 2/3 of our projected income. We are @ 125% of our 2006 net worth, not counting home value. :beer

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Re: Do retired Bogleheads have rising net assets?

Post by GerryL » Mon Feb 02, 2015 6:40 pm

It's too soon for me to say, but I sort of expect that my assets will hold steady -- or even increase -- if I don't up my planned spending. An SWR of 1-2% should give me more than I need to top off SS and a minimal pension, if I go ahead and get a SPIA as planned. I am revisiting that idea to see what would happen if instead of getting the SPIA I simply reinvest a large chunk of my RMD each year. I have to be careful not to make this a contest with myself and focus too much on the $$ than on what these years of saving can make possible. Repeat to self: It is okay to spend down your assets.

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Re: Do retired Bogleheads have rising net assets?

Post by investor » Mon Feb 02, 2015 6:43 pm

retired 18 years ago... assets worth much more now even after RMD's.


investor

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Re: Do retired Bogleheads have rising net assets?

Post by Toons » Mon Feb 02, 2015 7:24 pm

Net Worth up substantially since retiring in 2011,No SWR. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Do retired Bogleheads have rising net assets?

Post by Christine_NM » Mon Feb 02, 2015 7:25 pm

Retired 10 years ago last month. With RMD my SWR is about 1.3%. Assets are still growing almost as they did before retirement.

I kept stock allocation low (35-40%) during the first 10 years based on the sequence of returns issue. It appears that now I can afford to raise the stock allocation a bit, to 50% tops and not get in hot water later on.

That 1.3% SWR is not something I decided on, it is just the percentage of assets I happen to have taken last year.
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Re: Do retired Bogleheads have rising net assets?

Post by BostonBoy » Mon Feb 02, 2015 8:00 pm

Retired June, 2007 (age 57) and our retirement portfolio is up about 60%. Luckily, we haven't had to make any withdrawals yet. We've been living off
our cash and taxable stock account.

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Re: Do retired Bogleheads have rising net assets?

Post by white_water » Mon Feb 02, 2015 8:15 pm

Have been retired 14 years, live on small pension and SS, but worked part time for the first 5 years of retirement, made enough to buy health insurance ( $5000 yr) before reaching Medicare age.

Current WR is about 1 1/2 % because of RMD. There is a serendipity factor, our health is generally good, and we are able to do most chores, household maintenance tasks ourselves. We grow a huge vegetable garden, food expense in the summer is very low.

During that time the account tripled due to market increase, the addition of surplus cash via maintaining a modest standard of living, and selling a house privately then buying a less expensive home in another ( warmer) state. My current AA is very conservative, 1/3 each stock and bond index funds, the remaining 1/3 in cash and CDs.

Despite 2 recessions, ( stayed the course and added $ along the way) life is good in the slow lane. We are definitely not wealthy, whatever that metric is.
Last edited by white_water on Mon Feb 02, 2015 11:31 pm, edited 2 times in total.

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Re: Do retired Bogleheads have rising net assets?

Post by littlebird » Mon Feb 02, 2015 8:19 pm

Retired 26 years on 1 very modest pension and 1 1/2 s.s.'s. We live on that comfortably, especially as the years went by and net worth increased. Only w/d from assets for capitol purchases. Net worth has increased 444.444%, which includes a modest inheritance. 2014 may have been the last year of rising assets, however, as spouse has now hit the wall of old age/very high non-insured medical/maintenance costs. :-) :(

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Re: Do retired Bogleheads have rising net assets?

Post by Munir » Mon Feb 02, 2015 9:10 pm

How can you compare those with pensions (or SPIAs) and S.S. to those living off their nest eggs? Is everyone comparing their total assets or just their investment portfolios? I haven't seen one reponse saying their "assets" are flat or have declined. Are the members of the flat/declining group refusing to post or are all BHs very wealthy :happy ?

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Re: Do retired Bogleheads have rising net assets?

Post by Tortoise » Mon Feb 02, 2015 10:02 pm

littlebird wrote:... spouse has now hit the wall of old age/very high non-insured medical/maintenance costs. :(
Sorry to hear that.
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Re: Do retired Bogleheads have rising net assets?

Post by cheese_breath » Tue Feb 03, 2015 12:05 am

Retired in 1997 at age 56, and I don’t adhere to SWR concepts in retirement. As I’ve noted in other posts, I maintain an Excel spreadsheet projecting expenses and portfolio growth over my and my wife’s expected lifetimes. I withdraw what I need and spend what I want so long as it doesn’t cause me to come up short at the end.

As far as portfolio growth, it was about flat the first few years as I had to depend on one small pension and savings withdrawals for living expenses including medical insurance for my wife and myself. But over time a second pension, social security for me and my wife, and Medicare coverage kicked in reducing the drain on the savings and allowing for greater portfolio growth. Currently it’s about 54% greater than when I retired, and I project it to continue growing for another 8 years. After that it should begin declining as my pensions are without COLA, and additional savings withdrawals will become necessary to cover inflation adjusted living expenses.
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Re: Do retired Bogleheads have rising net assets?

Post by Bill M » Tue Feb 03, 2015 8:30 am

jvclark02 wrote:Retired last year and assets still rising but trying to learn to spend more :oops:
ditto - two years and still learning.

If my net assets were not rising, and projected to continue rising, I'd be buying a SPIA to make sure they did.

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Re: Do retired Bogleheads have rising net assets?

Post by gerrym51 » Tue Feb 03, 2015 8:34 am

2 years and assets keep rising. about to buy rv-assets going to take hit :mrgreen:

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Re: Do retired Bogleheads have rising net assets?

Post by Toons » Tue Feb 03, 2015 8:37 am

Munir wrote:How can you compare those with pensions (or SPIAs) and S.S. to those living off their nest eggs? Is everyone comparing their total assets or just their investment portfolios? I haven't seen one reponse saying their "assets" are flat or have declined. Are the members of the flat/declining group refusing to post or are all BHs very wealthy :happy ?

One scenario is many are paying for a majority of living expenses with Pensions,SS,etc while the bulk of their investment assets have continued to compound their "net assets",during this 5 year bull market. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Do retired Bogleheads have rising net assets?

Post by Toons » Tue Feb 03, 2015 8:38 am

gerrym51 wrote:2 years and assets keep rising. about to buy rv-assets going to take hit :mrgreen:
We did the same a little over a year ago,,Enjoy! :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Do retired Bogleheads have rising net assets?

Post by jfn111 » Tue Feb 03, 2015 8:49 am

Munir wrote:How can you compare those with pensions (or SPIAs) and S.S. to those living off their nest eggs? Is everyone comparing their total assets or just their investment portfolios? I haven't seen one reponse saying their "assets" are flat or have declined. Are the members of the flat/declining group refusing to post or are all BHs very wealthy :happy ?
I have a pension. Not of SS age yet.
I look at all assets as one big pot. Dividends received and withdrawals from a taxable account are all calculated into a yearly withdrawal rate.

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Re: Do retired Bogleheads have rising net assets?

Post by midareff » Tue Feb 03, 2015 9:02 am

Retired in the first quarter of 2012 with a pension and started SS. Initial WR was near 2.5% of the portfolio balance then. Market assets are up about 30% since then and WR has been gradually increased to 3%. AA is roughly 46% equities, 51% FI and 3% cash.
With a balanced portfolio averaging over 10% returns for the last 3 years against a (now) 3% WR I don't see how assets would not be accumulating.

Dividends received and withdrawals from a taxable account (and a Roth) are all calculated into a yearly withdrawal rate. The more the market goes up the lower the WR becomes. The math will work the other way when the bear will roar. Some quick math tells me that a 40% decline would raise my present WR to 3.6% and a 60% decline to 4.0%, assuming bonds did not tank at the same time. Sleep well at night without a second thought.

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Re: Do retired Bogleheads have rising net assets?

Post by Ron » Tue Feb 03, 2015 9:54 am

Munir wrote:How can you compare those with pensions (or SPIAs) and S.S. to those living off their nest eggs? Is everyone comparing their total assets or just their investment portfolios? I haven't seen one reponse saying their "assets" are flat or have declined. Are the members of the flat/declining group refusing to post or are all BHs very wealthy :happy ?
You bring up a valid point.

I retired in early 2007 (age 59) without SS nor a defined benefit (e.g. pension) plan. At that time the only income I had was a small VA disability benefit along with withdrawls from my IRA (Traditional, Roth, and Rollover IRA - from my former company's 401(k) plan).

While my company did not have a traditional pension, they did have a cash balance plan http://en.wikipedia.org/wiki/Cash_balance_plan in which I received a lump sum and in turn purchased an SPIA to mimic a defined pension plan. This represents (along with the VA benefit) just under 25% of my current monthly expenses so in reality I'm drawing just over 75% of my required income from my retirement investments.

Looking at my current data, it shows that my retirement investment assets have declined by $6,500 since my retirement; not bad if you consider that amount is spread over just under eight years of my retirement; however, it is a negative value and to the OP's question, it does represent a declining balance - quite the opposite of most reported on this thread.

OTOH, over the 7+ (almost 8) years of retirement, I've withdrawn just under $400k to cover my expenses for the period (includes FIT for all withdrawals; local/state income tax does not apply where I live).

So the question arises how one would look at this data. Does my portfolio truly show an overall $6,500 loss during the period? Should I actually include the almost $400k withdrawn as a gain in my portfolio since I don't have a traditional pension (paid by a company - not a lump sum that had to be managed by me)? Additionally, I'm only measuring from the point of (my) retirement assets - not net assets, which IMHO has no correlation with matching income vs expenses while in retirement.

And then again there is that pesky withdrawal rate. While my WD rate is above that magic 4% for my portfolio (and even above 4% when measured as a couple with combined retirement investment assets and expenses), it drops to just under 2% in less than three years when I/wife claim our respective age 70 SS benefits.

Fun with numbers :mrgreen: ... In the end, does it really matter?

- Ron
Last edited by Ron on Tue Feb 03, 2015 10:11 am, edited 1 time in total.

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Re: Do retired Bogleheads have rising net assets?

Post by artthomp » Tue Feb 03, 2015 10:00 am

I retired in 2006. Before I reached 70.5 in 2010 and had to start taking RMDS my wife and I got by on Social Security and my pension.
Since I have started taking RMDS, we have started spending an additional 1 - 2 percent of the total portfolio (taxable and non-taxable) while reinvesting the rest of the RMDS in taxable accounts at Vanguard.
The overall portfolio has increased in value by approximately 44% (approximately 7%/year). Approximately 77% of our present portfolio is tax deferred (Roth and traditional IRAs).
The portion of our portfolio I manage is modeled after the Vanguard Retirement Income portfolio (very conservative).
Art

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Re: Do retired Bogleheads have rising net assets?

Post by The Wizard » Tue Feb 03, 2015 10:07 am

Retired for two years now and my remaining tax-sheltered assets have grown nicely even with withdrawals taking place, roughly 4% per year w/d, but similar to others, this is a "bridge" to claiming SS at age 70.
I'm hesitant to take even more income at this point since a rising stock market won't go on forever.
After I survive the next crash, I'll re-evaluate my situation...
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Re: Do retired Bogleheads have rising net assets?

Post by CABob » Tue Feb 03, 2015 1:29 pm

I retired in 2004. Our net worth has grown since then and each year with exception of 2005 and 2008. Withdrawals from my tax deferred account averaged less than 1% until RMDs were taken.
Bob

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Re: Do retired Bogleheads have rising net assets?

Post by LarryG » Tue Feb 03, 2015 1:49 pm

I retired 12/31/1998 and began taking RMDs 2 years later. My withdrawal rate has varied between 4.3% and 6.5% with higher percentages in recent years as a result of higher RMDs. The average withdrawal over 16 years is 5%
The value of my IRA is now 4.1% more than the day I retired. In addition I have a small amount in a Roth IRA and in a taxable account.

LarryG

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Re: Do retired Bogleheads have rising net assets?

Post by jwa » Tue Feb 03, 2015 1:56 pm

Ron wrote:
Munir wrote:How can you compare those with pensions (or SPIAs) and S.S. to those living off their nest eggs? Is everyone comparing their total assets or just their investment portfolios? I haven't seen one reponse saying their "assets" are flat or have declined. Are the members of the flat/declining group refusing to post or are all BHs very wealthy :happy ?
You bring up a valid point.

I retired in early 2007 (age 59) without SS nor a defined benefit (e.g. pension) plan. At that time the only income I had was a small VA disability benefit along with withdrawls from my IRA (Traditional, Roth, and Rollover IRA - from my former company's 401(k) plan).

While my company did not have a traditional pension, they did have a cash balance plan http://en.wikipedia.org/wiki/Cash_balance_plan in which I received a lump sum and in turn purchased an SPIA to mimic a defined pension plan. This represents (along with the VA benefit) just under 25% of my current monthly expenses so in reality I'm drawing just over 75% of my required income from my retirement investments.

Looking at my current data, it shows that my retirement investment assets have declined by $6,500 since my retirement; not bad if you consider that amount is spread over just under eight years of my retirement; however, it is a negative value and to the OP's question, it does represent a declining balance - quite the opposite of most reported on this thread.

OTOH, over the 7+ (almost 8) years of retirement, I've withdrawn just under $400k to cover my expenses for the period (includes FIT for all withdrawals; local/state income tax does not apply where I live).

So the question arises how one would look at this data. Does my portfolio truly show an overall $6,500 loss during the period? Should I actually include the almost $400k withdrawn as a gain in my portfolio since I don't have a traditional pension (paid by a company - not a lump sum that had to be managed by me)? Additionally, I'm only measuring from the point of (my) retirement assets - not net assets, which IMHO has no correlation with matching income vs expenses while in retirement.

And then again there is that pesky withdrawal rate. While my WD rate is above that magic 4% for my portfolio (and even above 4% when measured as a couple with combined retirement investment assets and expenses), it drops to just under 2% in less than three years when I/wife claim our respective age 70 SS benefits.

Fun with numbers :mrgreen: ... In the end, does it really matter?

- Ron
Similar but not equal situation. I now embark on the retirement journey with a very small pension each month. I do work part time but that only amounts to about $5,000 annually and this won't be but for a couple of years. However, I will do file and suspend at the end of this year and my wife will collect the 50%. In about 4 years we both will collect on both of our social securities. To make ends meet, I am withdrawing a greater percentage than 4% currently. However, when we both file on our respective social security coupled with the small pension I will not need to withdraw anything for a few years and after that very small amounts. (I do this to endeavor minimizing taxes on social security later on - we shall see if this works.)

Even still, like the OP, I would find it interesting for those who retired in say about 1999 and what has happened to their portfolios.

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Re: Do retired Bogleheads have rising net assets?

Post by Sheepdog » Tue Feb 03, 2015 2:35 pm

LarryG wrote:I retired 12/31/1998 and began taking RMDs 2 years later. My withdrawal rate has varied between 4.3% and 6.5% with higher percentages in recent years as a result of higher RMDs. The average withdrawal over 16 years is 5%
The value of my IRA is now 4.1% more than the day I retired. In addition I have a small amount in a Roth IRA and in a taxable account.

LarryG
Thanks for posting, Larry. We retired near the same time and it appears that we had similar results including similar withdrawals. Let's congratulate each other. Here's to you :sharebeer
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Re: Do retired Bogleheads have rising net assets?

Post by White Coat Investor » Tue Feb 03, 2015 2:45 pm

I'd say you two are the most successful of all the posters in this thread. All the others withdrawing 1-2% must have really loved their work to spend an extra 5 years doing it.
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Re: Do retired Bogleheads have rising net assets?

Post by HIinvestor » Tue Feb 03, 2015 2:51 pm

Our withdrawal rate is the RMDs mandated by IRS. We actually net more than we spend, with pension, rental income, investments and RMDs. Our net assets rise modestly.

We haven't touched our Roth IRAs.

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Re: Do retired Bogleheads have rising net assets?

Post by randomguy » Tue Feb 03, 2015 3:17 pm

Munir wrote:How can you compare those with pensions (or SPIAs) and S.S. to those living off their nest eggs? Is everyone comparing their total assets or just their investment portfolios? I haven't seen one reponse saying their "assets" are flat or have declined. Are the members of the flat/declining group refusing to post or are all BHs very wealthy :happy ?
It is hard to have declining portfolio unless you are taking out 5%+ given the market conditions of the past 30 years. You would need to pick the worst date possible to retire and even then you are probably about breaking even unless you went conservative after the crash.

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Re: Do retired Bogleheads have rising net assets?

Post by Christine_NM » Tue Feb 03, 2015 6:11 pm

EmergDoc wrote:I'd say you two are the most successful of all the posters in this thread. All the others withdrawing 1-2% must have really loved their work to spend an extra 5 years doing it.
To be eligible for pensions we have to work for a certain length of time and to a certain age. You don't retire 5 years early and expect your company to hand over a living wage. Meanwhile your savings grows. So you end up with more than enough, God willing and the creek don't rise.
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Re: Do retired Bogleheads have rising net assets?

Post by tennisplyr » Tue Feb 03, 2015 6:38 pm

Here's a thread that deals with BH retirees change in their portfolio value.

viewtopic.php?f=10&t=127221
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Re: Do retired Bogleheads have rising net assets?

Post by ralph124cf » Tue Feb 03, 2015 8:20 pm

I retired last year at 65, and I am pulling money out of tax deferred at a 5% rate until age 70, at which time I will drop to RMD. This is to provide a level income for tax purposes, I am actually using 70% of the withdrawals for spending and infernal revenue, and the other 30% for ROTH transfers.

Ralph

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Re: Do retired Bogleheads have rising net assets?

Post by joe8d » Tue Feb 03, 2015 8:25 pm

Toons wrote:
Munir wrote:How can you compare those with pensions (or SPIAs) and S.S. to those living off their nest eggs? Is everyone comparing their total assets or just their investment portfolios? I haven't seen one reponse saying their "assets" are flat or have declined. Are the members of the flat/declining group refusing to post or are all BHs very wealthy :happy ?

One scenario is many are paying for a majority of living expenses with Pensions,SS,etc while the bulk of their investment assets have continued to compound their "net assets",during this 5 year bull market. :happy
Exactly.
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Re: Do retired Bogleheads have rising net assets?

Post by wjo » Tue Feb 03, 2015 11:10 pm

DVMResident wrote:
Sheepdog wrote: Re: Do retired Bogleheads have rising net assets?
by Sheepdog » Mon Feb 02, 2015 6:50 pm

I have been retired since 1998 (16 years) so I have gone thru 2 major downturns. I have taken out an average of 4.56% a year. The total of my invested assets has risen 7%

edit: Calculated the growth of total assets.
Thank you for your numbers. It really puts a perspective on the ultra-low SWR threads.
Don't forget inflation here - the BLS inflation calculator says that $1.00 in 1998 would require $1.45 to purchase the same amount in 2014. That's 45% inflation. If Sheepdog is taking 4.5% per year out via VPW, his total withdrawal last year has only gone up 7% in those years, putting the money he is taking out now significantly less on an inflation adjusted basis than what he withdrew in 1998.

The low SWR studies all are based on withdrawal rates that keep pace with inflation. I am sure for Sheepdog, Soc Sec (which is inflation adjusted) has made up a big part of the difference and that he has some costs that are in nominal dollars that haven't grown.

By taking money out on the VPW method, what Sheepdog and others have done is to front load withdrawals from the portfolio and given up some growth on the back end. Nothing bad about this - makes a lot of sense from a spend the money when you are young and healthy perspective - but don't make it more than what it is.

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