2021/2022 retirees: your feelings

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9-5 Suited
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Re: 2021/2022 retirees: your feelings

Post by 9-5 Suited »

Ramjet wrote: Fri May 13, 2022 1:28 pm
jebmke wrote: Fri May 13, 2022 1:00 pm
Ramjet wrote: Fri May 13, 2022 12:44 pm
CloseEnough wrote: Fri May 13, 2022 12:34 pm For most retirees, you will have perhaps 30 or even 40 years in retirement
More like 17 - 19 years

Avg. U.S. retirement age: 62

Avg. life expectancy of a man: 79

Avg. life expectancy of a woman: 81
Are the last two conditional expectancies? the relevant number would be the expected age at death given that you have reached 62 already, right? That culls out all the deaths prior to age 62 from the actuarial data.

I also wonder if one excludes people who never retire if the conditional expectancy changes. I have no idea.
No clue. Only point is I don't think most people have 30 or 40 year retirements. Most would be 90 or 100 years old around time of death
Looks like the median life expectancy for those who reach 62 is 20 years for men and 23 years for women so your point still stands. The median retirement scenario probably isn’t quite 30 years.
Marseille07
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Re: 2021/2022 retirees: your feelings

Post by Marseille07 »

marcopolo wrote: Fri May 13, 2022 6:53 am I am not a big fan of holding a lot of cash, hardly have any myself.

But, wouldn't following your reasoning above lead everyone to be 100% invested in equities, or whatever has the largest expected returns.

Substitute the word "bond" for "cash" in your post, and it would seem to argue for never holding bonds either.
Bond worshiping is strong here. You take the heat for having $5 cash in your wallet, but you get a pass for holding 40% in bonds.
Last edited by Marseille07 on Fri May 13, 2022 5:10 pm, edited 2 times in total.
85% US + FM + RSU | 15% Cash
2marshmallow
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Re: 2021/2022 retirees: your feelings

Post by 2marshmallow »

9-5 Suited wrote: Thu May 12, 2022 2:59 pm For people contemplating retirement in the near future, I think it would very instructive to hear from retirees who are currently experiencing a poor (though not yet terrible) early return sequence to learn about both the emotional impact as well as financial impact as it is happening. Some things I'm curious about:

1. Are you resolved to completely stay the course on your retirement plan as it stood when you first pulled the trigger, or are you considering any short-term changes such as picking up some part-time work?

2. Are you feeling hopeful since these events are 'baked in' to SWR scenarios already, or is it more difficult than you expected emotionally?

3. What have you found surprising, especially if it's something helpful, that you didn't expect either about your own reactions or how your finances were impacted? For example in other forums, I've noticed people with larger 'cash stashes' seemed more relaxed, regardless of whether that's a technically wise strategy or not.

I hope this is considered actionable, as well as helpful. I'm contemplating retirement in about 3-5 years, and have been thinking about how I might have reacted had it been 1/1/2022. But it's hard to project those feelings perfectly since I know I'm still working/accumulating.
1. Yes, stay the course unless things get considerably worse, or stay bad for several years.

2. Yes, I rationalize staying the course because the withdrawal guidelines we are using are derived from performance during the worst 30 year period (late 60's). We also have about 30% flexibility in our budget if needed in support of flexible spending rules, which we well may need to implement to some extent next year unless things improve.

3. Yes, the cash on hand does help ease the mind. We could finance at lease a year and a half of expenses just from our cash accounts that are not part of the retirement nest egg. I know, this is just mental accounting, but it does give us some peace of mind.

All the time spent reading/studying the Boglehead Way is helping us deal with the triple whammy of poor stock and bond performance and high inflation while maintaining a degree of equanimity. Another thing that eases our mind is that if we sold our house we would walk away with about $1.3M to $1.4M in cash, after selling expenses, mortgage payoff and cap gains tax.

Regards,
2marshmallow
jebmke
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Re: 2021/2022 retirees: your feelings

Post by jebmke »

Ramjet wrote: Fri May 13, 2022 1:28 pm No clue. Only point is I don't think most people have 30 or 40 year retirements.
Wasn't disagreeing. Mainly wondering how long I have. I may tred back into the Tips market eventually and I'd hate to liability match for a corpse. :beer
When you discover that you are riding a dead horse, the best strategy is to dismount.
fatcoffeedrinker
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Re: 2021/2022 retirees: your feelings

Post by fatcoffeedrinker »

Ramjet wrote: Fri May 13, 2022 1:28 pm
jebmke wrote: Fri May 13, 2022 1:00 pm
Ramjet wrote: Fri May 13, 2022 12:44 pm
CloseEnough wrote: Fri May 13, 2022 12:34 pm For most retirees, you will have perhaps 30 or even 40 years in retirement
More like 17 - 19 years

Avg. U.S. retirement age: 62

Avg. life expectancy of a man: 79

Avg. life expectancy of a woman: 81
Are the last two conditional expectancies? the relevant number would be the expected age at death given that you have reached 62 already, right? That culls out all the deaths prior to age 62 from the actuarial data.

I also wonder if one excludes people who never retire if the conditional expectancy changes. I have no idea.
No clue. Only point is I don't think most people have 30 or 40 year retirements. Most would be 90 or 100 years old around time of death
Conditional expectancies are 83 and 86, respectively.
cathyr
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Re: 2021/2022 retirees: your feelings

Post by cathyr »

Retired 1/15/2022 (just after turning 63) - so, just before the market started going down. I had planned to sell from taxable account quarterly for expenses until I start taking social security. I did the first quarter in January, then decided to hold off on additional selling for the time being. I have about a year in cash, so I’ll see how things go.

I don’t plan on changing any plans, other than using cash vs taxable for the moment - I am glad I have a bit of a cash cushion:). I’m going to start doing Roth conversions since my income will be low while using some cash. Also I’m doing cobra this year, so no concerns about aca subsidies.

I’m comfortable with my planning - looking at ss at 70, 3.5% withdrawal until then.

Interesting thread - like to hear how everyone else is handling things.

Cathy
DA200
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Re: 2021/2022 retirees: your feelings

Post by DA200 »

Retiring in 18 days at 55/54.
Staying the course with retirement plan.
20x in bonds and 30x in stocks. Both were higher a few months ago, but we will be perfectly fine with a 2% SWR.
Can’t say it doesn’t hurt to be down $800K…
Zhuang
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Re: 2021/2022 retirees: your feelings

Post by Zhuang »

journey wrote: Thu May 12, 2022 6:43 pm This is the type of information I sought before DH and I retired. We retired in January 2021, 478 glorious days ago. We were both 56.

1. Are you resolved to completely stay the course? Yes.
2. Are you feeling hopeful? Yes. Is it more difficult emotionally? No.
3. What have you found surprising? Nothing, though grateful that I insisted on having a strong cash/cash equivalent reserve before retiring.

Planning: I used a variety of online calculators, all of which indicated we could retire. Then, for each of the 3 years prior to retiring, we had three different CFP firms (independently) evaluate our portfolio when they offered free evaluations (wanting us to use their services). Each said we were good to go. After that, I created a ‘worst case scenario’ calculator. In short, it forecasts our portfolio

• with no Social Security
• with no Medicare
• with no pensions
• a market downturn of x% (select a variable from a list of historic downturns)
• … and then $1M set aside for health care despite using the ACA (I became ill in college and spent the rest of my 20s in hospitals and recovering; expect the unexpected, eh?)
• and y% return on equites (I often use 0%)
• and z% Federal tax rate + our state rate (fixed in NC)

When it was clear that we would be okay after these factors, albeit lean, I was confident in us retiring. We are currently at 56/26/16 (stocks/bonds/cash). Is the cash a drag, especially during increased inflation? Yes. Are we okay with this? Yes. The cash is funding peace of mind and Roth conversions for years to come. So far, so good.

Best to you in your considerations :sharebeer
Great post :sharebeer When we put things in perspective, it's not as scary as the news stated. We know the bull market will come after the downturns. In the meantime stay calm and stay the course!
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9-5 Suited
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Re: 2021/2022 retirees: your feelings

Post by 9-5 Suited »

Marseille07 wrote: Fri May 13, 2022 2:34 pm
marcopolo wrote: Fri May 13, 2022 6:53 am I am not a big fan of holding a lot of cash, hardly have any myself.

But, wouldn't following your reasoning above lead everyone to be 100% invested in equities, or whatever has the largest expected returns.

Substitute the word "bond" for "cash" in your post, and it would seem to argue for never holding bonds either.
Bond worshiping is strong here. You take the heat for having $5 cash in your wallet, but you get a pass for holding 40% in bonds.
Similarly, pick any “should I pay off my mortgage” thread and you’ll invariably see someone say absolutely not because equities return more in the long run. But you never see anyone bat an eye at a large bond portfolio.

(I do have 35% bonds tilted toward TIPs, iBonds, and LTT so not opposed to the asset class at all, just an observation)
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Re: 2021/2022 retirees: your feelings

Post by 9-5 Suited »

DA200 wrote: Fri May 13, 2022 4:32 pm Retiring in 18 days at 55/54.
Staying the course with retirement plan.
20x in bonds and 30x in stocks. Both were higher a few months ago, but we will be perfectly fine with a 2% SWR.
Can’t say it doesn’t hurt to be down $800K…
Nice, 18 days and 50x! Should be fun. I’d probably be doing no work in those 18 days …
chipperd
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Re: 2021/2022 retirees: your feelings

Post by chipperd »

Coming up on 3 years FI and greatly reduced (80%) work income.
5 years cash cushion for this type of event certainly helps ease the anxiety, but would rather see that total balance go up instead of down.
Trained the brain for long term thinking a long time ago and net worth still higher than 3 years ago, so that's some solace.
"A portfolio is like a bar of soap, the more it's handled, the less there is." Dr. William Bernstein
Marseille07
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Re: 2021/2022 retirees: your feelings

Post by Marseille07 »

9-5 Suited wrote: Fri May 13, 2022 5:26 pm Similarly, pick any “should I pay off my mortgage” thread and you’ll invariably see someone say absolutely not because equities return more in the long run. But you never see anyone bat an eye at a large bond portfolio.

(I do have 35% bonds tilted toward TIPs, iBonds, and LTT so not opposed to the asset class at all, just an observation)
Bonds are overrated imo. We just had a four-decade-long bond bull run and bonds got very expensive (low yield curve) as a result.

If I were to retire later this year, I'd carry more cash than bonds.
85% US + FM + RSU | 15% Cash
rich126
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Re: 2021/2022 retirees: your feelings

Post by rich126 »

Interesting reading. I'm pondering retiring at the end of the year. What I might do is retire from my job but get a contracting position and work another 6-12 months. By doing that, it would probably save me $100K (no withdrawals, 401K savings added, and getting a pension while working). This would assume i can get another job but with what I do, I think that is pretty likely especially when coupled with a clearance.

Finance wise I own almost nothing in the bond arena. I also happen to have a decent chunk of my money in cash. While cash is losing to inflation at least it hasn't taken the additional 15-20% loss that stocks have taken. I tend to keep more cash than many especially as the market rises. Also due to some money I inherited, it took longer to get it from Vanguard and then over to Fidelity. In fact during one Fidelity call the lady said "You have a lot of cash do you need any help investing it?" I only wish I had cashed out everything but I'm still assembling what my dad had.

Also my investments are a bit too diverse with 3 brokerages and the TSP. I keep waiting for Schwab to consume my TD account. Also all of the inherited Roth/401K rollover inheritance has to be keep in separate accounts which makes things a bit messier.

I also had a chunk of cash in two 3-yr MYGAs I got in 2019 that were going to be used as social security bridge money. Overall I probably have a good 25% cash position. Some of that will get invested into the market while part of it will likely go into another MYGA or T-bill to complete the bridge money.

Yeah losing enough money that could have covered the first few years of retirement is painful but thankfully I had a cushion and if I had to, I could continue in this job as long as I want (I returned to government in 2019) even though I want to move westward. I'm sure others aren't as lucky. Hopefully this drop has caused some younger folks who seem to think a 10%+ return is a given. We've been lucky over the last decade or two where even the big drops were generally recovered quickly. My biggest mistake (up to now) is selling my house in late 2020. We'll see how the real estate market does in the next few years.

I do wonder about the wisdom of folks paying off or avoided 2-3% mortgages when you can get more than that in fixed income investments now. I understand wanting to be debt free but ...

Oh, my final retirement decision will likely depend on my health and what the market does the rest of the year. I think ideally I like doing the pension + 6 months of extra work (ideally 32 hrs a week) to provide a bit of a cushion and likely guarantee me delaying social security to at least 67. Once social security kicks in, that and my smallish pension will likely cover most of my expenses (barring extreme inflation or medical events) so my SWR could be in the 0-2% range.
----------------------------- | If you think something is important and it doesn't involve the health of someone, think again. Life goes too fast, enjoy it and be nice.
chris319
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Re: 2021/2022 retirees: your feelings

Post by chris319 »

I retired in 2021 at age 66. I am taking soc sec as well as the company pension in the form of a life annuity. I could have waited until age 70 to take soc sec but it would have been a very tight squeeze to meet my monthly living expenses after taxes.

Between the pension and soc sec my living expenses are more than covered. Any excess can be invested, which account is insulated as I don't rely on it to cover living expenses. IOW, the investment account can fluctuate up and down without affecting the funds available to cover living expenses.
The only person you have to please in life is yourself.
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Candor
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Re: 2021/2022 retirees: your feelings

Post by Candor »

Retired June '21 at 53 with a modest portfolio, by BH standards, and no pension. I had enough cash (ibonds/CD's) to carry me until 60.

My AA was approx 50/25/25 equities/bonds/cash and I am in the process of moving towards ~60% in equities depending how deep the correction goes and I'm currently at 53/47.

I'm comfortable with the current situation and see no need be concerned at this point. I look at the drop as an opportunity and although it's never easy to see your portfolio drop significantly, especially at the beginning of a hopefully long retirement, I have a long term perspective and don't get caught up in the play-by-play of economic/market fluctuations.
The fool, with all his other faults, has this also - he is always getting ready to live. - Epicurus (341–270 BC)
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burt
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Re: 2021/2022 retirees: your feelings

Post by burt »

Retired 2015.
Invested in Target Retirement Income Fund. 30/70
Delaying SS until age ?
Doing Roth Conversions at top of 12% bracket.
Modest pension.
I have no desire to gamble with my retirement savings.
Getting old sucks. Being old and poor really sucks.
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