Retirees: I got this!!

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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cinghiale
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Re: Retirees: I got this!!

Post by cinghiale » Sun Nov 12, 2017 2:01 am

The Wizard wrote,
Open the spigot, eh?
So I should fly business class to Madrid in March just because I can?
Hmmm, I'm not sure about that.
There's a certain attention to expenses, not frugalness exactly, but attention that remains in retirement.
And then pakamoky asked:
Out of curiosity for those of you who have "opened the spigot", what do you spend money on now that you didn't before?
I did not mean to equate “opening the spigot” with frivolous spending. Nor a hat-waving, “yee hah!” ride atop unbridled spending until you get bucked off by a market plunge.

We have attempted to— if not open the spigot to full force, at least nicely increase the flow— in these first few years of retirement. What does that mean? In theory, it means providing some treats, some luxuries, some rewards after decades of work and sacrifices made to enable savings and investment. It means that, built into the term delayed gratification, there’s a time when it is appropriate to stop delaying.

In practice, each person will have had a lifetime to determine what kinds of rewards are worth it; which ones feel like good value for the money. Personally, new cars and big screen TVs do not make my list. Travel does. That first class seat to Madrid may be worth it to you. Or maybe it’s worth trading in some extra credit card points for the upgrade. Maybe a short 8 hour flight from Boston to Madrid is just as easily done in premium economy, with a thousand or so saved for a nice hotel, meals out, and entrances to the Prado, Reina Sofia, and the Thyssen-Bornemisza. :D The point is, if you want to see Madrid, do it while you have the energy and endurance to do so.

Around 15 years ago, I had the chance to live abroad for an extended time, with lots of travel built in. A cousin wrote to me with this reaction, “Good for you. You’re old enough to appreciate it, and young enough to endure it.” Memorable, good travel needs both.

No one wants to run out of money. But we also deal in another currency: time. That should be cultivated as mindfully as we tend our portfolios.
-- Cinghiale | | "We don't see things as they are; we see them as we are." Anais Nin | | | "Sometimes the first duty of intelligent men is the restatement of the obvious." George Orwell

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celia
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Re: Retirees: I got this!!

Post by celia » Sun Nov 12, 2017 2:02 am

pacamoky wrote:
Sat Nov 11, 2017 10:44 pm
Out of curiosity for those of you who have "opened the spigot", what do you spend money on now that you didn't before?
taxes for Roth conversions
a little more travel
eating out when we don't feel like cooking (but we often walk to the restaurant for free exercise)

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catdude
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Re: Retirees: I got this!!

Post by catdude » Sun Nov 12, 2017 2:59 am

Howdy y'all -

I'm 62, been retired for seven years. My modest pension helps tremendously to tamp down whatever financial stress there might be. But I've come to the realization that it's unrealistic for me to live on my pension alone. Roth conversions, high state taxes, vet bills for my four senior cats, the desire to "open the spigot", etc. etc., mean that I have to tap my portfolio for some expenses. Still, my withdrawal rate is probably only about 1%, so I feel pretty comfortable and confident in my retirement security. I'll be fine....
catdude | | “The holy passion of Friendship is of so sweet and steady and loyal and enduring a nature that it will last through a whole lifetime, if not asked to lend money.” (Mark Twain)

The Wizard
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Re: Retirees: I got this!!

Post by The Wizard » Sun Nov 12, 2017 3:16 am

I actually HAVE been spending considerably more on travel in retirement with all the free time available.
Managing finances for this has been interesting, with the the combination of payments for future travel (plane tickets and some group trips) along with payment for travel just completed (CC bills for lodging, meals, etc).

I pay everything pretty much from current income but I have taken the step of increasing my target checking account balance up to $10,000 to help with some months that have larger than average bills coming due.
When pondering yet another trip in the next 6-12 months, I use the health of my checking account to tell me if it's feasible. If current bills are paid and my balance is healthy (over $8000 or so) then I have a green light.
If my balance in low, $5000 or so, then that's not so good; so it would be better to wait a month for replenishment before committing a few thousand to that future trip.

Now I suppose I could spend down the rather modest sums in my Roth IRA or my taxable investment account. But that would reduce my "wealth" and I'd rather not do that at this point...
Attempted new signature...

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tennisplyr
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Re: Retirees: I got this!!

Post by tennisplyr » Sun Nov 12, 2017 8:28 am

Great answers! I've been pretty lucky to have retired during this extended bull market while also downsizing from m a HCOL area. Seems like I have a bunch of options going forward so I feel pretty good :happy
Those who move forward with a happy spirit will find that things always work out.

minesweep
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Re: Retirees: I got this!!

Post by minesweep » Sun Nov 12, 2017 9:07 am

:dollar from the get go.

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1210sda
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Re: Retirees: I got this!!

Post by 1210sda » Sun Nov 12, 2017 10:58 am

I've been retired for almost 16 years. (12/31/2001)

We suffered through 2002 and the first quarter of 2003. It was bit scary, but not that much and it didn't last very long. By April 2003 we saw things getting better. By the end of the year, our portfolio had increase by 25%.

For the next several years, it was smooth sailing until about the end of 2007. Then 2008 hit.

For the 16 months from Nov 2007 until March 2009, our portfolio value dropped by 40%. Fortunately, we recovered a large portion of that drop by year's end, 2009.

I've looked back on our spending in 2008 and I didn't find much cutting back. Perhaps we were slow to respond to the declining markets, or perhaps we were in denial. Don't know.

We did take action on our spending in 2009 and 2010. We cut back on our charge card purchases and on our groceries. In addition, we delayed our planned new car purchase for those two years.

By 2011,we were pretty much back on budget. From then on, it's been this big bull market that we all are enjoying.

So in my 16 years of retirement I have seen two difficult periods. The first one was too short for us to react. In the second one, 2008, it took us a full year to recognize that we were in for some belt tightening. In 2009 and 2010 we made the adjustments I've mentioned above.

1210

P.S. Looking back at our portfolio for 2008, we were "only" down by 8.5% through August. The bulk of the losses took place in the last four months of 2008. This might be why we didn't cut back too much in 2008. Up until September, we were waiting for the market to"come back". :happy

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SimpleGift
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Re: Retirees: I got this!!

Post by SimpleGift » Sun Nov 12, 2017 11:16 am

tennisplyr wrote:
Sat Nov 11, 2017 8:27 am
Of those BHs who've been retired a while, I was wondering when you really started feeling comfortable about your finances in retirement.
tennisplyr wrote:
Sun Nov 12, 2017 8:28 am
I've been pretty lucky to have retired during this extended bull market while also downsizing from a HCOL area.
I'd say moving to a low cost-of-living area has done more to make us feel relaxed about our finances in retirement than any other factor. A LCOL area with good healthcare facilities, plus plenty of outdoor recreation options, has been a boon to our retirement.
Cordially, Todd

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sergeant
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Re: Retirees: I got this!!

Post by sergeant » Sun Nov 12, 2017 2:19 pm

digarei wrote:
Sat Nov 11, 2017 12:46 pm
I retired 2 years ago at 59.

I was comfortable from Day 1... mostly attributable to having learned to reduce my expenses for a dozen years prior to retirement in order to pay off consumer debt. I learned that I can live on much less. And lots of planning.

Of three actual and potential income streams, i calculated that I can live modestly on just one.

What would change this obscenely high level of optimism, upending my plans? An obscenely high level of inflation for more than a year or two—my pension is COLA-capped at 2%. A long market decline or crash wouldn’t bother me as much unless it coincided with an extended period of high inflation (10%+).
What type of pension is it? Many public pensions have a 70% purchasing power protection provision.
Lincoln 3 EOW!

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digarei
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Re: Retirees: I got this!!

Post by digarei » Sun Nov 12, 2017 3:43 pm

sergeant wrote:
Sun Nov 12, 2017 2:19 pm

What type of pension is it? Many public pensions have a 70% purchasing power protection provision.
State government employees (CalPERS)

There is a provision that provides partial protection to pension recipients when inflation outruns the COLA. I don’t have the number in front of me but I think that it would be inadequate in terms of maintaining purchasing power over long periods of time (e.g., late 1960s through 1981). And of course the contract could be rescinded by the state legislature.

Recent hires (since 2005) are on track to receive greatly reduced COLAs (or none) when they retire.


Edit 11-16-2017 strike out incorrect assertion
Last edited by digarei on Thu Nov 16, 2017 5:41 pm, edited 1 time in total.
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nkotbbh
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Re: Retirees: I got this!!

Post by nkotbbh » Sun Nov 12, 2017 11:10 pm

Sandtrap wrote:
Sat Nov 11, 2017 9:32 am
tennisplyr wrote:
Sat Nov 11, 2017 8:27 am
Of those BHs who've been retired a while, I was wondering when you really started feeling comfortable about your finances in retirement. . . .
A little better
day by day
little by little.
LBM portfolio
with a lot "off the table" helps me sleep. . . . . :D
LBM portfolio? what is that?

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Sandtrap
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Re: Retirees: I got this!!

Post by Sandtrap » Mon Nov 13, 2017 12:19 am

nkotbbh wrote:
Sun Nov 12, 2017 11:10 pm
Sandtrap wrote:
Sat Nov 11, 2017 9:32 am
tennisplyr wrote:
Sat Nov 11, 2017 8:27 am
Of those BHs who've been retired a while, I was wondering when you really started feeling comfortable about your finances in retirement. . . .
A little better
day by day
little by little.
LBM portfolio
with a lot "off the table" helps me sleep. . . . . :D
LBM portfolio? what is that?
sorry. Typo. Senior moment. :shock:
Liability Matching Portfolio. per Bernstein.

J295
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Re: Retirees: I got this!!

Post by J295 » Mon Nov 13, 2017 12:25 am

Five years. Tons of comfort. Strong equities and various unpredicted income sources have helped financially, and absence of work stress is great.

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Sandtrap
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Re: Retirees: I got this!!

Post by Sandtrap » Mon Nov 13, 2017 12:31 am

pacamoky wrote:
Sat Nov 11, 2017 10:44 pm
Out of curiosity for those of you who have "opened the spigot", what do you spend money on now that you didn't before?
Opened the spigot.
Lifestyle Creep
Bought my first iPhone 7+ instead of the cheapest "flip phone".
New MacBook Pro with all the goodies instead of upgrading my ancient one.
Bought several nice Columbia butter fleece pullovers, $50 each.. . instead of Walmart generic scratchy ones.
Got DW her first iPad for her birthday.
Buy really good toilet paper instead of the cheapest on sale.
Yep.
Livin large in retirement. . . :D

. . . oh. . forgot. . .paid off my son's mortgage.
Last edited by Sandtrap on Mon Nov 13, 2017 12:34 am, edited 1 time in total.

itstoomuch
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Re: Retirees: I got this!!

Post by itstoomuch » Mon Nov 13, 2017 12:32 am

pacamoky wrote:
Sat Nov 11, 2017 10:44 pm
Out of curiosity for those of you who have "opened the spigot", what do you spend money on now that you didn't before?
Bought a retirement condo in Redmond WA. Haven't placed our current home in OR on the market. I have a parent (98) that I visit daily, OR.
We pay an outrageous interest rate of 4.75% with 40% downpay in order to qualify for a conforming loan based on our retirement "Income" . Luckily, I had positioned Roths, taxables into cash late 2016 and early 2017 :annoyed :| . Also had to call in a small loan to son when he purchased his home in Seattle :annoyed .
YMMV
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

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tennisplyr
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Re: Retirees: I got this!!

Post by tennisplyr » Tue Nov 14, 2017 8:00 am

Sandtrap wrote:
Mon Nov 13, 2017 12:31 am
pacamoky wrote:
Sat Nov 11, 2017 10:44 pm
Out of curiosity for those of you who have "opened the spigot", what do you spend money on now that you didn't before?
Opened the spigot.
Lifestyle Creep
Bought my first iPhone 7+ instead of the cheapest "flip phone".
New MacBook Pro with all the goodies instead of upgrading my ancient one.
Bought several nice Columbia butter fleece pullovers, $50 each.. . instead of Walmart generic scratchy ones.
Got DW her first iPad for her birthday.
Buy really good toilet paper instead of the cheapest on sale.
Yep.
Livin large in retirement. . . :D

. . . oh. . forgot. . .paid off my son's mortgage.
Good for you, no time like the present!!
Those who move forward with a happy spirit will find that things always work out.

smashhand
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Re: Retirees: I got this!!

Post by smashhand » Tue Nov 14, 2017 8:43 am

Retired second quarter of 2009 at age 61. Psychologically, the transition to retirement was a little tougher than I though it would be. Financially, I had done better planning so DW and I avoided the stress that some of the earlier posters reported. Now, we're not considering moving to the South of France, but we're having a blast--traveling, supporting charities we admire, salting away money in our grandchildren's college funds--all the while continuing to save, protect our health and making sure we give thanks for the blessings we continue to receive. No big news here, but this is our formula for a happy retirement: freedom from debt, a working lifetime of retirement awareness and savings, a network of good friends, and hobbies and activities we like investing our time in. We are not nearly so well-heeled as many Bogleheads seem to be, but when we consider that we had a net worth of negative $3,200 when we married 45 years ago, to say "We got this" seems monumentally understated.

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BTDT
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Re: Retirees: I got this!!

Post by BTDT » Tue Nov 14, 2017 9:06 am

As a long time Boglehead who follows an IPS titled SWAN (sleep well at night) I am very happy and sleep quite well. We traveled extensively in our 60's but international travel seem to be slowing down in our 70's. We still like to travel but airports, airlines, and fellow 'traveler's, are sucking the fun out of it.

My major concern is Alzheimer's. We should be ok financially but coping with the slow loss of your best friend through such a horrible process is terrifying to me.
If past history was all that is needed to play the game of money, the richest people would be librarians.

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HomerJ
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Re: Retirees: I got this!!

Post by HomerJ » Tue Nov 14, 2017 10:08 am

1210sda wrote:
Sun Nov 12, 2017 10:58 am
For the 16 months from Nov 2007 until March 2009, our portfolio value dropped by 40%. Fortunately, we recovered a large portion of that drop by year's end, 2009.
80% in stocks is a lot in retirement. You were lucky it bounced back so fast. What if it had taken 5 years to recover instead of 1 year?

nkotbbh
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Re: Retirees: I got this!!

Post by nkotbbh » Wed Nov 15, 2017 11:24 pm

Sandtrap wrote:
Mon Nov 13, 2017 12:19 am
nkotbbh wrote:
Sun Nov 12, 2017 11:10 pm
Sandtrap wrote:
Sat Nov 11, 2017 9:32 am
tennisplyr wrote:
Sat Nov 11, 2017 8:27 am
Of those BHs who've been retired a while, I was wondering when you really started feeling comfortable about your finances in retirement. . . .
A little better
day by day
little by little.
LBM portfolio
with a lot "off the table" helps me sleep. . . . . :D
LBM portfolio? what is that?
sorry. Typo. Senior moment. :shock:
Liability Matching Portfolio. per Bernstein.
Gotcha.

an_asker
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Re: Retirees: I got this!!

Post by an_asker » Thu Nov 16, 2017 4:24 pm

HomerJ wrote:
Sat Nov 11, 2017 11:04 am
Ged wrote:
Sat Nov 11, 2017 10:34 am
It should be no surprise that recent retirees are exceeding expectations because of very good market performance. No guarantee that the next cohort of retirees will have the same experience so I'm not sure that recent experience will be a useful guide for future retirees.
This. Sorry guys... All your great stories of retiring in the past 7 years do nothing for me. :)
... unless one of you can guarantee that the seven years after my retirement will be like the last seven ;-)

Heck, let me make your job easier. Pick for me a future stretch of seven years when the market will be like it was the last seven. I will retire on that zeroth year!

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sergeant
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Re: Retirees: I got this!!

Post by sergeant » Thu Nov 16, 2017 5:20 pm

digarei wrote:
Sun Nov 12, 2017 3:43 pm
sergeant wrote:
Sun Nov 12, 2017 2:19 pm

What type of pension is it? Many public pensions have a 70% purchasing power protection provision.
State government employees (CalPERS)

There is a provision that provides partial protection to pension recipients when inflation outruns the COLA. I don’t have the number in front of me but I think that it would be inadequate in terms of maintaining purchasing power over long periods of time (e.g., late 1960s through 1981). And of course the contract could be rescinded by the state legislature.

Recent hires (since 2005) are on track to receive greatly reduced COLAs (or none) when they retire.
Calpers has a 70% pension protection in case of inflation. Where did you get this information that recent hires get a reduced or no COLA? It simply isn't true.
Lincoln 3 EOW!

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digarei
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Re: Retirees: I got this!!

Post by digarei » Thu Nov 16, 2017 5:38 pm

sergeant wrote:
Thu Nov 16, 2017 5:20 pm
digarei wrote:
Sun Nov 12, 2017 3:43 pm
sergeant wrote:
Sun Nov 12, 2017 2:19 pm

What type of pension is it? Many public pensions have a 70% purchasing power protection provision.
State government employees (CalPERS)

There is a provision that provides partial protection to pension recipients when inflation outruns the COLA. I don’t have the number in front of me but I think that it would be inadequate in terms of maintaining purchasing power over long periods of time (e.g., late 1960s through 1981). And of course the contract could be rescinded by the state legislature.

Recent hires (since 2005) are on track to receive greatly reduced COLAs (or none) when they retire.
Calpers has a 70% pension protection in case of inflation. Where did you get this information that recent hires get a reduced or no COLA? It simply isn't true.
No time to verify information that you’ve provided but I think you’re right:

My source was a 2-page excerpt from the CalPERS website describing the COLA % applicable to current retirees for 2017 based on the year of their retirement. My PDF version had the column titles on the bottom of page 1. I misread the table—as well as inverting the sort order of one column.

https://www.calpers.ca.gov/page/retiree ... iving/cola

Big oops! So much for my speed-reading abilities...

Thanks for pointing out this error. :D

I’ll correct my post.
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lws
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Re: Retirees: I got this!!

Post by lws » Thu Nov 16, 2017 6:35 pm

I retired in 2012. I have have never worried about finances since then.

snowox
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Re: Retirees: I got this!!

Post by snowox » Thu Nov 16, 2017 6:48 pm

My wife and I retired 3 years ago with 4 kids still at home. I was 50 she was 46. Made $ lost money but long and short of it I was done with my business and burnt out. 30 years in the industry 23 on my own. So ran the numbers said what the heck give it a try at age 50. Then all the Healthcare stuff came and we decided lets both apply for the most flexible job out there with the best benefits because that alone would save us big time with what we were paying. Wife got a job that actually does benefits that she loves and it turned out to be over a 5k a month savings for us. So I'm retired and remodeling our house and she loves her job knowing she can quit anytime. We will see how things go with the next downturn but I feel I am mentally closer to feeling comfortable each day. I worry regardless. And now two of the 4 kids are off to college.

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convert949
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Re: Retirees: I got this!!

Post by convert949 » Fri Nov 17, 2017 5:35 am

Sold company at 55 in 2005. Fully paid out and fully invested in 2007 :shock: Watched 25 years of work nearly cut in half in 2008. Became a Boglehead, TLH all from Ameriprise to Vanguard and stayed invested (not easy). Did the math and discovered that cost is the only thing you CAN control (less risk, same return). Since then, we have found that a portfolio tied to liability matching is what lets us sleep well at night.

To those who are putting things off till later, beware... DW and I are now 68 and still in reasonably good health but have friends dealing with health issues every day. Remember, we don't stop playing because we get old, we get old because we stop playing!

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Re: Retirees: I got this!!

Post by MikeG62 » Sat Nov 18, 2017 9:13 am

Cyclesafe wrote:
Sat Nov 11, 2017 9:26 am
I am approaching my 18th year of retirement and I'm actually wishing that I had opened the spigot a bit more early on. The only reason
I am posting this is that a concern of running out is sort of a mirror image of a regret of having denied oneself experiences that in hind sight were affordable.
This is good advice.

Too many people on these boards espouse using ultra low annual withdrawal rates (sub 3%) and many of them, as well as others, continuing to live life frugally in retirement. Keep in mind we all get to live only once. My advice is to live within (well within if you can) your means while working. Accumulate as large a nest egg as possible. Then live up to the level of your means while in retirement (with a sizable allocation to T&E - whatever that means to you). If the crap hits the fan in retirement, your budget (T&E and other areas) should allow for belt tightening and course correcting.

Dying with a very large nest egg resulting in part from depriving oneself of life enhancing/enriching experiences because one wanted to protect against the 1% or 2% probability black swan event seems awfully silly to me.

FWIW, DW and I are completing our 2nd full year of retirement (I early retired at 53 and she at 51). We are walking the talk.

westrichj312
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Re: Retirees: I got this!!

Post by westrichj312 » Sat Nov 18, 2017 9:39 am

It's not the end of the world if you run out of money the government will still house, feed, provide full medicade. You might be surprised how well some people live broke in retirement!

HIinvestor
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Re: Retirees: I got this!!

Post by HIinvestor » Sat Nov 18, 2017 1:17 pm

H retired 5 years ago. I’m working part-time and am VERY happy with what I do in the nonprofit I started and larger role I’m taking in the national nonprofit I’ve been volunteering in. When the kids were in college, I was more active about pursing funding so I could help pay their expenses and tuition (paid in full before H retired). At this point, I’m happy our nonprofit organization is in the black and helping people.

Our finances are in great shape and we have more income from various sources than we expected and are very comfortable without tapping any of our savings. We re-invest the RMDs we withdraw every year because we don’t need those funds, even though we are fully supporting a young adult we had assumed would be self-supporting by now.

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Re: Retirees: I got this!!

Post by littlebird » Sat Nov 18, 2017 2:09 pm

I was comfortable right from the beginning, although I was young enough (46) to go back to work if it turned out to be necessary, which it was not. This was 30 years ago, before the internet, and my decision as to feasibility was based on my own estimate of return on assets and a "back of the envelope" calculation. My only models were from my parents' generation.

Had there been Bogleheads, and had I read it, I probably would not have made the decision I did. Ignorance has been bliss.

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Re: Retirees: I got this!!

Post by garlandwhizzer » Sun Nov 19, 2017 11:45 am

I've been retired for 20 years and my investment portfolio is larger now than when I first retired. I feel pretty confident now, a lot more confident than I felt during the tech collapse of 2000-2003 or the financial collapse of 2007-2009. I managed to avoid panic selling on both occasions which was critical since my portfolio was equity dominated. How confident I feel depends to some extent on market conditions. Our 8 year bull market currently helps the retirement arithmetic to look better.

Garland Whizzer

dkturner
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Re: Retirees: I got this!!

Post by dkturner » Sun Nov 19, 2017 11:58 am

tennisplyr wrote:
Sat Nov 11, 2017 8:27 am
Of those BHs who've been retired a while, I was wondering when you really started feeling comfortable about your finances in retirement. That is, where you thought it's highly unlikely that you'd run into massive distress about your investments. I've been retired almost 7 years and find myself feeling more and more confident about my financial future.
I've been retired six years and feel the same way that you do. But then I remember that the last six years have seen very good investment returns. Our combined portfolios have had an 8.8% annualized return over the prior 6 years, with a 50/50 allocation.

heyyou
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Re: Retirees: I got this!!

Post by heyyou » Sun Nov 19, 2017 3:50 pm

I'd say moving to a low cost-of-living area has done more to make us feel relaxed about our finances in retirement than any other factor. A LCOL area with good healthcare facilities, plus plenty of outdoor recreation options, has been a boon to our retirement.
Same here, with emphasis on the outdoor recreation.

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