Reply to How much to retire at age 55? We are 50

Forum Index » Money and Finances

Reply to "How much to retire at age 55? We are 50"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Two thoughts.  First retirement is not a one way street but if you decide to reenter the labor market you will take a hit.  Second, what’s your return assumption?  Have you processed the fact that real interest rates are negative?  What do you think that means? [/quote]

Of course. If we retire , it would be very difficult to find jobs in our field again as we are very specialized unless we are willing to move etc.  We are right now invested very aggressively for our age and have most in equities. Obviously if the stock market takes a big hit in the next few years we’ll be singing a different tune. My plan is before we retire to move 1M into safe assets.   In 2008, our portfolio dropped by half and as traumatic as that was it was only 400k or so at that time- now it would be a much different story.[/quote]

Yeah.. Tell me about it.  We prob. had close to $1.5m at that time and it dropped to less than $1M.  Now at $7.5, a 50% drop would be terrible.  In my spreadsheet model, I assume a 50% drop sometime during the current year so the projected beginning balance for the next year is adjusted down 50% (if it doesn't happen this year, I just push it out to next year in my model on Jan 1).  I just got to the point where things don't turn negative over the next 50 years even with the 50% drop in the next year.  I also assume 5% investment growth, 3% expenditure growth and try to model in all known large expenses - college, home remodel, car purchase every 10 years, etc. [/quote]

NP.  So what is your plan if the market drops by 50%?  Will you keep enough in cash for expenses to ride out the drop or plan your retirement based on 50% drop or just plan to live in less?  Are there any other mitigation strategies?  [/quote]

In theory under the 4% plan you do not need to do anything.  Your portfolio is fully invested and will increase back.  If you took a 50% loss in 2008/2009 you have a hefty gain as of year end 2021.  In my accounts -- they were down by 40% or so.  They were back to break even by 2013 up more than 25% (on original) by 2016 and up 140% on original as of year end last year.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics