Anyone bail early and regret it?

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McCharley
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Joined: Tue Apr 12, 2011 5:45 pm

Anyone bail early and regret it?

Post by McCharley » Sun Nov 26, 2017 9:16 pm

Hi, Bogleheads,

I am approaching 50 and have enough investments to pay me at a not-luxurious rate forever (roughly $50k/yr @4% withdrawal rate).

I spend more than this now, although my mortgage will end in 6 years and then I'll be roughly even. I could pay off my mortgage with existing cash, but the loan is only at 2.75% so it seems worth it to keep it if only for an inflation hedge.

My job is in a field that has a lot of turmoil, and I would love to be able to have the mental fallback option of just SEPP-ing my way into early retirement.

I am wondering if anyone has done something similar and regretted it -- or perhaps it was great? :sharebeer

Thanks.
McC

delamer
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Joined: Tue Feb 08, 2011 6:13 pm

Re: Anyone bail early and regret it?

Post by delamer » Sun Nov 26, 2017 9:27 pm

No direct experience, but the 4% "safe" withdrawal rate is appropriate for people retiring in their 60's.

If you are thinking of pulling the plug in your 50's, 3% is more appropriate.

Also take into account the impact on your Social Security if you stop work in your 50's and the cost of health insurance until you are Medicare eligible.

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Alexa9
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Joined: Tue Aug 30, 2016 9:41 am

Re: Anyone bail early and regret it?

Post by Alexa9 » Sun Nov 26, 2017 9:35 pm

I expected the market to tank years ago. I realize that it is unpredictable and following your gut is not advisable. Now I think it's better to have a conservative allocation than no allocation.

Dead Man Walking
Posts: 698
Joined: Wed Nov 07, 2007 6:51 pm

Re: Anyone bail early and regret it?

Post by Dead Man Walking » Sun Nov 26, 2017 10:22 pm

I bailed on much of my taxable equity investments in late 1998 and spent the proceeds on renovating my elderly parent's home. During 1999, I thought that I had really made a poor decision. I felt much better in 2000.

DMW

Random Walker
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Joined: Fri Feb 23, 2007 8:21 pm

Re: Anyone bail early and regret it?

Post by Random Walker » Sun Nov 26, 2017 11:02 pm

I’m 55 and started pulling back over last 2 years. I’m in accumulation phase but feel like I might be forced into early retirement against my will in near future. If plug gets pulled, I would have to have more modest retirement than I expected. But still no regret. The pain of loss way more than happiness of equal sized gain.

Dave

EnjoyIt
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Joined: Sun Dec 29, 2013 8:06 pm

Re: Anyone bail early and regret it?

Post by EnjoyIt » Mon Nov 27, 2017 12:10 am

McCharley wrote:
Sun Nov 26, 2017 9:16 pm
Hi, Bogleheads,

I am approaching 50 and have enough investments to pay me at a not-luxurious rate forever (roughly $50k/yr @4% withdrawal rate).

I spend more than this now, although my mortgage will end in 6 years and then I'll be roughly even. I could pay off my mortgage with existing cash, but the loan is only at 2.75% so it seems worth it to keep it if only for an inflation hedge.

My job is in a field that has a lot of turmoil, and I would love to be able to have the mental fallback option of just SEPP-ing my way into early retirement.

I am wondering if anyone has done something similar and regretted it -- or perhaps it was great? :sharebeer

Thanks.
McC
Looks like you are in retirement limbo. Sick of working full time while being so close to 25x expenses but not quite there yet.

I would love to see some people respond to your question and give their experiences though I doubt very many would. It is human nature to rationalize a decision as correct despite evidence showing the contrary. In my search for early retirement I find that most people or happy with their choices while a few choose to go back to work.

Maybe your answer is to look for work doing something else that you enjoy allowing your investments to grow for a couple of years. Even if it means making less money. The other thought is to plow through with your current job till you really have 25x or the turmoil catches up with your forcing you into alternative employment. Maybe the answer is to work part time making just enough money to cover the mortgage for the next 6 years.

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whodidntante
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Joined: Thu Jan 21, 2016 11:11 pm

Re: Anyone bail early and regret it?

Post by whodidntante » Mon Nov 27, 2017 12:24 am

I'm in a similar situation in that I could become almost unemployable in my current industry. I just don't take my income for granted, and I save what I can from it. If the axe falls before I'm ready, I will have to find new ways to make money. And I will be better off than I would have been without strategic thinking.

SpaceCowboy
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Joined: Sun Aug 12, 2012 12:35 am

Re: Anyone bail early and regret it?

Post by SpaceCowboy » Mon Nov 27, 2017 12:37 am

I would take the next couple of years to think about and plan what you would do without work. It’s better to retire to something. The transition can be a bit difficult, if you don’t have some hobbies or activities that you would like to do with the extra time. I also found that I became more frugal as I moved into decumulation from accumulation. Psychologically it’s just different spending your pile versus spending your earnings. FIREd 4 years ago at 53.

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Sandtrap
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Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Anyone bail early and regret it?

Post by Sandtrap » Mon Nov 27, 2017 1:49 am

I didn't bail early but the transition into retirement was very awkward and sometimes scary. It was like trying to get various income stream and asset balls to fall at the right time over a period of 4-5 years. DW and I expected and planned for the worse and hoped for the best. If we had not anticipated difficulties we would have been unprepared.
Thank goodness for the experts and shared wisdom on this forum as putting the last puzzle pieces in place have gone better than expected. :D
From personal experience, I would say to make sure that all your ducks are in order before pulling the plug because a lot of unexpected things can happen.
J :D

HIinvestor
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Re: Anyone bail early and regret it?

Post by HIinvestor » Mon Nov 27, 2017 4:49 am

Agree that we can only plan our best and deal with changes as the occur. We planned as best we could and then after many decades, the federal government FINALLY passed legislation improving H’s retirement IF he worked x additional years but would worsen it if H worked beyond that. That helped us choose a retirement date.

Some serious chronic health issues cropped up which affected me and both my kids. This has also affected choices for us and we have made the adjustments we could.

Because we had sufficient assets, we are able to provide full support for D since she has been unable to work and H was able to comfortably retire as scheduled. We are able to travel as much as we choose.

I guess we didn’t bail early in any case. We are still in equities, some bonds and some pension as well as some real estate rentals. Having diversified assets feels more secure to us.

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Top99%
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Location: Austin, TX

Re: Anyone bail early and regret it?

Post by Top99% » Mon Nov 27, 2017 9:12 am

It isn't clear if you like your job or not but if you don't one option would be to find a job you do like (possibly part time) that pays at least $15K and/or offers health care. That would allow you to "glide" into full retirement while keeping your withdrawal rate closer to 3% and reduce sequence of returns risk.
Adapt or perish

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LadyGeek
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Re: Anyone bail early and regret it?

Post by LadyGeek » Mon Nov 27, 2017 4:28 pm

This thread is now in the Personal Finance (Not Investing) forum (retirement planning).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

dkturner
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Joined: Sun Feb 25, 2007 7:58 pm

Re: Anyone bail early and regret it?

Post by dkturner » Mon Nov 27, 2017 4:35 pm

Not really bailing, but in March I sold equities in my R/O IRA equal to 2 years worth of RMDs and bought intermediate-term corporate bonds with the proceeds. I'll need half of the money next month and the second half in December of 2018. I regret the early move with respect to this year's RMD. The jury is still out on next year's money.

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