Regret Retiring Given Inflation/Market Woes?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you have enough cash to last 1-2 years without touching your investments, you’re fine. The people who get screwed are not those who retire in bad times, but those who retire in bad times AND sell their investments.

Re: cash

What happens in times of inflation, when your money buys less?

What happens if the market is down so long your cash runs out?

[Anonymous]

Anonymous wrote:

Anonymous wrote:For healthcare reasons alone I'd recommend keep working.

Have you priced out Obamacare for your state?

I pay $800 per month (for 1) with a $6000 deductible under the Affordable Care act. It is the cheapest plan offered in my state. I get no government subsidy as I earn over $46,000 per year.

We priced it out, around $40k for our family of four for a silver plan.

Maybe go HMO.

Ours is $1180/mo high deductible HSA eligible HMO plan - family of four in MD. Still, it allows us to not be dependent on a employers for healthcare.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you have enough cash to last 1-2 years without touching your investments, you’re fine. The people who get screwed are not those who retire in bad times, but those who retire in bad times AND sell their investments.

Re: cash

What happens in times of inflation, when your money buys less?

DP.. you tighten your belt a bit like everyone else.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you have enough cash to last 1-2 years without touching your investments, you’re fine. The people who get screwed are not those who retire in bad times, but those who retire in bad times AND sell their investments.

Re: cash

What happens in times of inflation, when your money buys less?

Good Lord! Has the present moment warped your sense of time and practicality? If you have $3-$5million in investments and $200k in cash/cash equivalents, you are overwhelmingly protected from inflation. If you don’t like cash, draw on a line of credit, perhaps a HELOC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you have enough cash to last 1-2 years without touching your investments, you’re fine. The people who get screwed are not those who retire in bad times, but those who retire in bad times AND sell their investments.

Re: cash

What happens in times of inflation, when your money buys less?

What happens if the market is down so long your cash runs out?

First, you should be properly allocated for retirement. Typically, that means you’re not 100% in stock. Second, the typical bear market (worse than a garden-variety correction) lasts about 2 years from peak to trough and back to prior peak. So, on average, if you have two years of cash equal to your expenses, you’re good.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Had been planning to retire this summer in my early 60s, but the rampant inflation and stock market declines have been kicking our butts financially.

Would still have a sizable net worth but have seen investments go down substantially in recent months. Wondering if people who were part of the "Great Resignation" over the past year or so are regretting their decision. I would feel like a chump if I retired now and felt obliged to work again and ended up taking a lower-paying job. As it stands, don't have a pension and would have to pay for healthcare out of own pocket.

Most folks start to adjust their investments as they reach retirement(5 or so years out). Mostly to low risk and and least aggressive. Did you guys making any adjustments?

If your less aggressive allocation includes a lot of bonds, you're still screwed this time around.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Had been planning to retire this summer in my early 60s, but the rampant inflation and stock market declines have been kicking our butts financially.

Would still have a sizable net worth but have seen investments go down substantially in recent months. Wondering if people who were part of the "Great Resignation" over the past year or so are regretting their decision. I would feel like a chump if I retired now and felt obliged to work again and ended up taking a lower-paying job. As it stands, don't have a pension and would have to pay for healthcare out of own pocket.

Most folks start to adjust their investments as they reach retirement(5 or so years out). Mostly to low risk and and least aggressive. Did you guys making any adjustments?

If your less aggressive allocation includes a lot of bonds, you're still screwed this time around.

Not if they’re short duration.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For healthcare reasons alone I'd recommend keep working.

Have you priced out Obamacare for your state?

I pay $800 per month (for 1) with a $6000 deductible under the Affordable Care act. It is the cheapest plan offered in my state. I get no government subsidy as I earn over $46,000 per year.

We priced it out, around $40k for our family of four for a silver plan.

Maybe go HMO.

Ours is $1180/mo high deductible HSA eligible HMO plan - family of four in MD. Still, it allows us to not be dependent on a employers for healthcare.

how old are you?

[Anonymous]

Anonymous wrote:

Anonymous wrote:For healthcare reasons alone I'd recommend keep working.

Have you priced out Obamacare for your state?

I pay $800 per month (for 1) with a $6000 deductible under the Affordable Care act. It is the cheapest plan offered in my state. I get no government subsidy as I earn over $46,000 per year.

I'm guessing you live in one of those states that rejected federal expansion of Medicaid and ACA which lowered premiums in general. That would have made your base premium at a lower rate regardless of your earning potential. Perils of being blue in a red state. There's 12 of them - including 'business friendly' Texas and Florida.

https://www.kff.org/medicaid/issue-brief/status-of-state-medicaid-expansion-decisions-interactive-map/

DP. I wouldn't count on that. When I lived in DC we were on Obamacare, and coverage for my spouse was $900 a person. The older you get, the higher the premium, and the increase is pretty steep.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Had been planning to retire this summer in my early 60s, but the rampant inflation and stock market declines have been kicking our butts financially.

Would still have a sizable net worth but have seen investments go down substantially in recent months. Wondering if people who were part of the "Great Resignation" over the past year or so are regretting their decision. I would feel like a chump if I retired now and felt obliged to work again and ended up taking a lower-paying job. As it stands, don't have a pension and would have to pay for healthcare out of own pocket.

Most folks start to adjust their investments as they reach retirement(5 or so years out). Mostly to low risk and and least aggressive. Did you guys making any adjustments?

+1

The problem in the recent past was that "low risk" was essentially zero return. That will change a bit as interest rates rise, but right now, that really hasn't kicked in, yet. Most people do go more conservative as they get close to retirement, but not many people have enough saved to go super low risk.

[Anonymous]

I haven't retired yet, but we are within 5 years. We hit our retirement net worth target at the end of 2021 but now of course have dropped back. Not an issue as we will continue to work and maybe I don't drop my hours as planned. But I am also sure the market will recover within a couple of years so we will be on track.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Had been planning to retire this summer in my early 60s, but the rampant inflation and stock market declines have been kicking our butts financially.

Would still have a sizable net worth but have seen investments go down substantially in recent months. Wondering if people who were part of the "Great Resignation" over the past year or so are regretting their decision. I would feel like a chump if I retired now and felt obliged to work again and ended up taking a lower-paying job. As it stands, don't have a pension and would have to pay for healthcare out of own pocket.

Most folks start to adjust their investments as they reach retirement(5 or so years out). Mostly to low risk and and least aggressive. Did you guys making any adjustments?

This! If you are retiring, your portfolio should be extremely conservative; you shouldn't have investments that are going down.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Had been planning to retire this summer in my early 60s, but the rampant inflation and stock market declines have been kicking our butts financially.

Would still have a sizable net worth but have seen investments go down substantially in recent months. Wondering if people who were part of the "Great Resignation" over the past year or so are regretting their decision. I would feel like a chump if I retired now and felt obliged to work again and ended up taking a lower-paying job. As it stands, don't have a pension and would have to pay for healthcare out of own pocket.

Most folks start to adjust their investments as they reach retirement(5 or so years out). Mostly to low risk and and least aggressive. Did you guys making any adjustments?

This! If you are retiring, your portfolio should be extremely conservative; you shouldn't have investments that are going down.

WRONG. No financial advisor will tell you that when retired you shouldn't have ANY stock investments. That's nuts.

[Anonymous]

Anonymous wrote:I retired 7 years ago at 53. So far I've been through two major market adjustments. The first was two years ago, when Covid first hit and the market dropped more than 30 percent. The second is now.

Market fluctuations are part of life. If you don't think you can stomach them, you're not ready to retire.

You have to think and look long term. Yes, things suck right now -- big time. But I'm still well, well ahead of where I was when I retired despite two major market fluctuations. My net worth was $4.8 million when I retired in 2015, and as of today it's $7.02 million. Yes, six months ago it was $8 million, meaning on paper I've lost $1 million this year. But I'm staying the course, and not regretting my decision to retire one iota.

We're in similar situation, both retired last year mid 50s, and our NW at the time was around 8mil. It's now down about $1mil. Fortunately, our paid off rentals have been doing well and we were able to increase rent substantially this year. The rent alone pretty much cover our living expenses considering we don't have any mortgages or loans, we don't see a need to liquidate any or very little equity for expenses.

[Anonymous]

I have about 6k/mo in rental income coming in after taxes. I’m living on that and not touching anything else. Not a problem. I’m reinvesting all dividend as well.