Early retiree: market volitility and living expenses

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Tejfyy
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Early retiree: market volitility and living expenses

Post by Tejfyy »

I’m in my first year of early retirement and think I have a handle on investing thanks to Bogleheads. I’m using the VPW and invested in two broad index funds for stocks and for bonds. I’ve got cash (CDs, savings and ibonds) for living expenses for 4 years. The bulk of my retirement is in an IRA, an annuity and a Roth.

In mid 2020, I invested an additional year’s worth of living expenses into SWTSX (a taxable account). It’s increased something like 45% until this recent drop.

At the end of last year and the beginning of this year, I bought ibonds from my living expenses cash which “depleted” my cash on hand. By that I mean, in June/July I’ll need to either crack open a CD early incurring a penalty or, I was thinking of selling some of the SWTSX. I hadn’t planned on getting into ibonds when I had opened the CDs thus the quagmire.

This current drop in the market has made me nervous. Should I sell the SWTSX now? Or should I wait until I need the cash in June and decide then what to do: Liquidate a CD or sell the fund? The penalties are not outrageous, the interest rates on these CDs are 0.70% and 1.25%. I don't pay taxes on LT capital gains, but they do affect my ACA premium subsidy.
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ResearchMed
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Re: Early retiree: market volitility and living expenses

Post by ResearchMed »

Could you help us out and give the name of "SWTSX" so each person reading your post doesn't need to look it up?

Thanks.

RM
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Re: Early retiree: market volitility and living expenses

Post by sycamore »

It seems that your risk tolerance is variable. This could be problematic. Stocks are not down all that much. Sure, today's market was a roller coaster ride but in the grand scheme of stock investing it's entirely normal.

Bogleheads often suggesting choosing a plan you can stick with through thick and thin. A component of such a plan is knowing what your risk tolerance is, and what asset allocation you can live with.

What is your current asset allocation in terms of stocks / bonds / cash? Did/do you have a plan for maintaining a constant AA? Or were/are you okay with letting it float a little bit, but rebalancing back to the target when a rebalancing band is reached? Or maybe a glidepath?

What emphasis do you place on your AA? Do you try to keep to it no matter what, i.e., if your stock allocation is down enough, you would sell bonds and buy stocks? Or is it something you gave thought to once or twice but were just thinking your withdrawal plan would get you through?

Not saying you should use a constant AA or a glidepath, or that you should use one withdrawal plan or another. Really just trying to raise the issue of how you feel about / relate to those concepts. If they fall by the wayside when a stock correction comes around, that suggests you have low risk tolerance in general and should develop a plan now to get to a "sleep well at night" AA, in order to avoid panic selling later.
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Re: Early retiree: market volitility and living expenses

Post by bampf »

ResearchMed wrote: Mon Jan 24, 2022 5:26 pm Could you help us out and give the name of "SWTSX" so each person reading your post doesn't need to look it up?

Thanks.

RM
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bampf
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Re: Early retiree: market volitility and living expenses

Post by bampf »

Tejfyy wrote: Mon Jan 24, 2022 5:16 pm I’m in my first year of early retirement and think I have a handle on investing thanks to Bogleheads. I’m using the VPW and invested in two broad index funds for stocks and for bonds. I’ve got cash (CDs, savings and ibonds) for living expenses for 4 years. The bulk of my retirement is in an IRA, an annuity and a Roth.

In mid 2020, I invested an additional year’s worth of living expenses into SWTSX (a taxable account). It’s increased something like 45% until this recent drop.

At the end of last year and the beginning of this year, I bought ibonds from my living expenses cash which “depleted” my cash on hand. By that I mean, in June/July I’ll need to either crack open a CD early incurring a penalty or, I was thinking of selling some of the SWTSX. I hadn’t planned on getting into ibonds when I had opened the CDs thus the quagmire.

This current drop in the market has made me nervous. Should I sell the SWTSX now? Or should I wait until I need the cash in June and decide then what to do: Liquidate a CD or sell the fund? The penalties are not outrageous, the interest rates on these CDs are 0.70% and 1.25%. I don't pay taxes on LT capital gains, but they do affect my ACA premium subsidy.
I think answer depends on your risk tolerance. If you are risk intolerant and you know you will need the money, sell. If you are comfortable regardless of what the market looks like in June, then hold and make your choice then. Arguably the 4 years living expense is supposed to smooth these bumps and prevent you from having to make a choice that you don't like (sell when the market is tanking). Me? I would wait for June. If the market is ugly in June, dump the CDs.

==Bampf
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Re: Early retiree: market volitility and living expenses

Post by Tejfyy »

sycamore wrote: Mon Jan 24, 2022 6:34 pm It seems that your risk tolerance is variable. This could be problematic. Stocks are not down all that much. Sure, today's market was a roller coaster ride but in the grand scheme of stock investing it's entirely normal.

Bogleheads often suggesting choosing a plan you can stick with through thick and thin. A component of such a plan is knowing what your risk tolerance is, and what asset allocation you can live with.

What is your current asset allocation in terms of stocks / bonds / cash? Did/do you have a plan for maintaining a constant AA? Or were/are you okay with letting it float a little bit, but rebalancing back to the target when a rebalancing band is reached? Or maybe a glidepath?

What emphasis do you place on your AA? Do you try to keep to it no matter what, i.e., if your stock allocation is down enough, you would sell bonds and buy stocks? Or is it something you gave thought to once or twice but were just thinking your withdrawal plan would get you through?

Not saying you should use a constant AA or a glidepath, or that you should use one withdrawal plan or another. Really just trying to raise the issue of how you feel about / relate to those concepts. If they fall by the wayside when a stock correction comes around, that suggests you have low risk tolerance in general and should develop a plan now to get to a "sleep well at night" AA, in order to avoid panic selling later.
Yes thanks for the reminders. I'm currently at a AA of 60/40 stocks/fixed, which is as risky as I'll go. An AA of 50/50 would also work with my aims. So yes I'm ok with some wiggle room.

I hadn't thought about my AA in terms of dis-aggregating the fixed income. The 40% fixed assets consist of 20% index bond fund (BND) Vanguard Total Bond Market ETF, 17% Cash CDs/Savings and 4% ibonds. Looking at the issue from an AA perspective I could comfortably sell all or some of the stocks fund and still be within my AA comfort zone.
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Tejfyy
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Re: Early retiree: market volitility and living expenses

Post by Tejfyy »

Thank you all and I apologize for the omission of the fund name. The reminders are what I need.
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Tejfyy
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Re: Early retiree: market volitility and living expenses

Post by Tejfyy »

bampf wrote: Mon Jan 24, 2022 6:39 pm
I think answer depends on your risk tolerance. If you are risk intolerant and you know you will need the money, sell. If you are comfortable regardless of what the market looks like in June, then hold and make your choice then. Arguably the 4 years living expense is supposed to smooth these bumps and prevent you from having to make a choice that you don't like (sell when the market is tanking). Me? I would wait for June. If the market is ugly in June, dump the CDs.

==Bampf
Yes. As I responded elsewhere in the thread, I'm at my limit with risk tolerance at an AA of 60/40 stocks/fixed. And I could be comfortable and meet my goals with 50/50. To be honest, I like the idea of selling some of the stock fund at a nice profit. I'm not a market timer but in this case it makes sense.
Thank you.
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Re: Early retiree: market volitility and living expenses

Post by chipperd »

bampf wrote: Mon Jan 24, 2022 6:39 pm
Tejfyy wrote: Mon Jan 24, 2022 5:16 pm I’m in my first year of early retirement and think I have a handle on investing thanks to Bogleheads. I’m using the VPW and invested in two broad index funds for stocks and for bonds. I’ve got cash (CDs, savings and ibonds) for living expenses for 4 years. The bulk of my retirement is in an IRA, an annuity and a Roth.

In mid 2020, I invested an additional year’s worth of living expenses into SWTSX (a taxable account). It’s increased something like 45% until this recent drop.

At the end of last year and the beginning of this year, I bought ibonds from my living expenses cash which “depleted” my cash on hand. By that I mean, in June/July I’ll need to either crack open a CD early incurring a penalty or, I was thinking of selling some of the SWTSX. I hadn’t planned on getting into ibonds when I had opened the CDs thus the quagmire.

This current drop in the market has made me nervous. Should I sell the SWTSX now? Or should I wait until I need the cash in June and decide then what to do: Liquidate a CD or sell the fund? The penalties are not outrageous, the interest rates on these CDs are 0.70% and 1.25%. I don't pay taxes on LT capital gains, but they do affect my ACA premium subsidy.
I think answer depends on your risk tolerance. If you are risk intolerant and you know you will need the money, sell. If you are comfortable regardless of what the market looks like in June, then hold and make your choice then. Arguably the 4 years living expense is supposed to smooth these bumps and prevent you from having to make a choice that you don't like (sell when the market is tanking). Me? I would wait for June. If the market is ugly in June, dump the CDs.

==Bampf
At this rate you'll be at your more comfortable 50/50 allocation soon :wink:

Hard to know if you should sell some of your non cash assets to pay for expenses without knowing the particulars, so can't really give you an answer to your posted question without knowing, to start:
-how much you need to live on per year,
-how much cash on hand you have left available to pay for those yearly expenses,
-your true risk tolerance and
-how many years you need your overall portfolio to last.

Solid, detailed info in, solid, detailed answers out.
"A portfolio is like a bar of soap, the more it's handled, the less there is." Dr. William Bernstein
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Re: Early retiree: market volitility and living expenses

Post by dboeger1 »

Keep in mind that when it comes to early retirement in particular, a long-term underperforming portfolio is often a bigger risk than an overly volatile one. 60/40 is already quite conservative, not to mention it sounds like you have a separate cash allocation. Is it possible that your emotions are a bit excessive for what is so far just a routine correction? Presumably, you need this portfolio to last you several decades; why are you worried what stocks will do tomorrow? I get that Bogleheads like to start with risk tolerance and build an asset allocation around that, but I'm a believer in training one's emotional fortitude to be more risk-tolerant, within reason. Risk tolerance should be based on actual risks to your financial plan, not just the scary headlines on the news, otherwise it's not much more defensible than day-trading or market-timing.

What would be the actual consequence to your life of a 50% decline in stocks? What would be the consequence of a 4% real return vs. an 8% one (just throwing out ballpark estimates) over your investing time horizon? If the answer to the latter is greater than the answer to the former, I would argue your emotions are the problem, not your portfolio, and that you should stay the course. After all, the reason staying the course works is that it avoids buying high and selling low. It always amazes me whenever there's a routine dip in the market, people are so quick to reassess their risk tolerance and asset allocations. I understand why, but realize that the end product of doing so at those times is likely the same as someone chasing performance by timing the market. In other words, looking back 20 years from now, it's likely that your rush to shift to more conservative assets after a drop will have reduced your returns by locking in losses, so to speak.

A better alternative for non-retirees is to use new funds to gradually build towards the newly desired asset allocation, if possible. Of course, since you're not accumulating anymore, you don't really have that option. That being said, there's substantial evidence that an increasing equity glide path post-retirement is actually a better strategy than the conventional approach of increasing bonds with age, mostly because sequence of returns and longevity risks diminish over time. I just don't see how or why someone who is afraid of a 10% correction at 60/40 would stop at 50/50, and I don't think going >50% bonds in a negative real yield environment with upcoming rate hikes announced makes any sense for an early retiree with a very long time horizon.
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Re: Early retiree: market volitility and living expenses

Post by aristotelian »

Withdraw from whatever account is most tax efficient, then rebalance to your target allocation. The net effect will be selling whatever is up and/or buying whatever is down.
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Re: Early retiree: market volitility and living expenses

Post by Streptococcus »

Tejfyy wrote: Mon Jan 24, 2022 5:16 pm I’m in my first year of early retirement and think I have a handle on investing thanks to Bogleheads. I’m using the VPW and invested in two broad index funds for stocks and for bonds. I’ve got cash (CDs, savings and ibonds) for living expenses for 4 years. The bulk of my retirement is in an IRA, an annuity and a Roth.

In mid 2020, I invested an additional year’s worth of living expenses into SWTSX (a taxable account). It’s increased something like 45% until this recent drop.

At the end of last year and the beginning of this year, I bought ibonds from my living expenses cash which “depleted” my cash on hand. By that I mean, in June/July I’ll need to either crack open a CD early incurring a penalty or, I was thinking of selling some of the SWTSX. I hadn’t planned on getting into ibonds when I had opened the CDs thus the quagmire.

This current drop in the market has made me nervous. Should I sell the SWTSX now? Or should I wait until I need the cash in June and decide then what to do: Liquidate a CD or sell the fund? The penalties are not outrageous, the interest rates on these CDs are 0.70% and 1.25%. I don't pay taxes on LT capital gains, but they do affect my ACA premium subsidy.
I think you should ask yourself a more important question: Am I at the appropriate AA? What you wrote indicates that you aren’t and as an early retiree, you have to balance the risk level that can make you sleep at night with the risk level that will still make your portfolio grow.
The current market drop is still a non-event in the big picture of your retirement journey and if you are nervous at this point, think about how you’ll feel if it drops another 10 or 20% for the next several years.
If the market were to drop another 30% for several years, would you feel comfortable with your current allocation?

Now you wrote that you have 4 years of living expenses in your FI. That should be enough to soothe your anxiety unless your stock exposure is too much for your comfort.

Now if I had to answer your question, assuming that your early retirement plan was well thought, I would advise to shut the noise and go enjoy your retirement. Portfolios are like cacti, they enjoy a healthy dose of neglect.
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Tejfyy
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Re: Early retiree: market volitility and living expenses

Post by Tejfyy »

chipperd wrote: Tue Jan 25, 2022 3:46 am
At this rate you'll be at your more comfortable 50/50 allocation soon :wink:

Hard to know if you should sell some of your non cash assets to pay for expenses without knowing the particulars, so can't really give you an answer to your posted question without knowing, to start:
-how much you need to live on per year,
-how much cash on hand you have left available to pay for those yearly expenses,
-your true risk tolerance and
-how many years you need your overall portfolio to last.

Solid, detailed info in, solid, detailed answers out.
Thank you chipper, I realize that. I'm not comfortable putting so much information online. I've been around BH long enough to have benefited greatly from the generalized if you will, advice and insight I've received. :happy
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Tejfyy
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Re: Early retiree: market volitility and living expenses

Post by Tejfyy »

Streptococcus wrote: Tue Jan 25, 2022 9:09 am
I think you should ask yourself a more important question: Am I at the appropriate AA? What you wrote indicates that you aren’t and as an early retiree, you have to balance the risk level that can make you sleep at night with the risk level that will still make your portfolio grow.
The current market drop is still a non-event in the big picture of your retirement journey and if you are nervous at this point, think about how you’ll feel if it drops another 10 or 20% for the next several years.
If the market were to drop another 30% for several years, would you feel comfortable with your current allocation?

Now you wrote that you have 4 years of living expenses in your FI. That should be enough to soothe your anxiety unless your stock exposure is too much for your comfort.

Now if I had to answer your question, assuming that your early retirement plan was well thought, I would advise to shut the noise and go enjoy your retirement. Portfolios are like cacti, they enjoy a healthy dose of neglect.
Thank you for those reminders and those questions. :) My AA has inched up to 60/40 stocks/fixed this past year which is my risk tolerance limit. I can achieve my goals with it being as low as 50/50, which is my low risk tolerance limit at this point. If it weren't for the cash flow issue I mentioned in my original post, I wouldn't be thinking about this at all right now. But it's helpful that I am. Love the cactus analogy!
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Re: Early retiree: market volitility and living expenses

Post by willthrill81 »

Tejfyy wrote: Mon Jan 24, 2022 5:16 pm This current drop in the market has made me nervous.
Why? The average maximum drawdown for stocks in a given year is -14%, and we're not even there yet. We're still below average.

Stocks can be volatile, and if you hold them for a long time, you WILL experience big drawdowns. That's part of the reason that they have outperformed assets like bonds over the long-term.
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Re: Early retiree: market volitility and living expenses

Post by wolf359 »

It's time to update your Investment Policy Statement.

You have spent several decades developing the mindset and habits to successfully accumulate the assets necessary to retire early. Congratulations on that!

However, you're now in a new phase of your life. Selling off assets and letting your nest egg shrink is the opposite of your life experience to this point. You need to re-write your IPS with your withdrawal strategy in mind. What are the specific actions you need to take? What do you do when the market tanks? Stress test your plan, and state what you need to do if the market goes down and stays down.

I would suggest that maybe VPW is not for you. It provides a variable income stream, but depletes your portfolio by age 100. If the market drops, your withdrawals drop as well. Yet you're still worried. That implies that you have not quite internalized how your withdrawal strategy works.

Maybe you can set up fixed income stream payments, so you can cover your recurring expenses (food, shelter, utilities, transportation, insurance) from a known reliable payment. You can use the variable stream for luxuries and other optional spending. When the market tanks, you cut back on luxuries, but you know you're always have food on the table and a roof over your head.

Methods of creating fixed income streams include:
  • maximizing social security
  • Owning a rental real estate property
  • Single premium immediate annuity
  • Collecting dividends
  • Fixed withdrawals from your bonds / cash reserve, and replenishing it every 4 years (or when the market is up.)

While it varies from person to person, you may have been comfortable continuing to invest during a market downturn back when you were building your portfolio. But continuing to withdraw when you can see it shrinking feels wrong. If instead you created an artificial paycheck and relied on that for your regular expenses, it may help.

You already own an annuity. Have you started payments from it?

The problem here may simply be that you need to articulate your withdrawal plan, then get comfortable following that plan.
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Re: Early retiree: market volitility and living expenses

Post by Tejfyy »

wolf359 wrote: Tue Jan 25, 2022 12:39 pm It's time to update your Investment Policy Statement.

You have spent several decades developing the mindset and habits to successfully accumulate the assets necessary to retire early. Congratulations on that!

However, you're now in a new phase of your life. Selling off assets and letting your nest egg shrink is the opposite of your life experience to this point. You need to re-write your IPS with your withdrawal strategy in mind. What are the specific actions you need to take? What do you do when the market tanks? Stress test your plan, and state what you need to do if the market goes down and stays down.

I would suggest that maybe VPW is not for you. It provides a variable income stream, but depletes your portfolio by age 100. If the market drops, your withdrawals drop as well. Yet you're still worried. That implies that you have not quite internalized how your withdrawal strategy works.

Maybe you can set up fixed income stream payments, so you can cover your recurring expenses (food, shelter, utilities, transportation, insurance) from a known reliable payment. You can use the variable stream for luxuries and other optional spending. When the market tanks, you cut back on luxuries, but you know you're always have food on the table and a roof over your head.

Methods of creating fixed income streams include:
  • maximizing social security
  • Owning a rental real estate property
  • Single premium immediate annuity
  • Collecting dividends
  • Fixed withdrawals from your bonds / cash reserve, and replenishing it every 4 years (or when the market is up.)

While it varies from person to person, you may have been comfortable continuing to invest during a market downturn back when you were building your portfolio. But continuing to withdraw when you can see it shrinking feels wrong. If instead you created an artificial paycheck and relied on that for your regular expenses, it may help.

You already own an annuity. Have you started payments from it?

The problem here may simply be that you need to articulate your withdrawal plan, then get comfortable following that plan.
I do have a philosophy and plan moving forward, in fact the VPW works quite well for projecting on a yearly basis how much money I have and will have in the future (given market downturns etc.) so that I don't run out before I'm dead :).

But yes you're correct I don't have a concrete withdrawal strategy articulated yet. For example, I plan on waiting as long as possible (till 70) to take social security but I may take it earlier. The Trust has said by 2034/35 it won't be able to pay full benefits. So that's something to consider. I have the same plan for the annuity which I'll likely take as a lifetime income. The VPW allows me to run scenarios with these possibilities so I'm not sure why you think it's not appropriate. Maybe I'm missing something, but I cannot decide today what I'm going to do in 10 or 15 years. That said, I most definitely have a direction and destination, it's the maneuvers I need to get a better handle on. I need to spend some time in the wiki :). Thanks for your thought-provoking post.
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Re: Early retiree: market volitility and living expenses

Post by calwatch »

Tejfyy wrote: Mon Jan 24, 2022 5:16 pm At the end of last year and the beginning of this year, I bought ibonds from my living expenses cash which “depleted” my cash on hand. By that I mean, in June/July I’ll need to either crack open a CD early incurring a penalty or, I was thinking of selling some of the SWTSX. I hadn’t planned on getting into ibonds when I had opened the CDs thus the quagmire.

This current drop in the market has made me nervous. Should I sell the SWTSX now? Or should I wait until I need the cash in June and decide then what to do: Liquidate a CD or sell the fund? The penalties are not outrageous, the interest rates on these CDs are 0.70% and 1.25%. I don't pay taxes on LT capital gains, but they do affect my ACA premium subsidy.
Remember that by buying the I Bonds, you raised the rate from whatever you were putting the cash in to 3.56% APR minimum (7.12% divided by two), and probably more depending on what the current six months' inflation is. So I would not hesitate to dump the CD in June if you needed the money.
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Re: Early retiree: market volitility and living expenses

Post by Marseille07 »

Tejfyy wrote: Tue Jan 25, 2022 11:29 pm I do have a philosophy and plan moving forward, in fact the VPW works quite well for projecting on a yearly basis how much money I have and will have in the future (given market downturns etc.) so that I don't run out before I'm dead :).
Be sure that your N is sufficiently large. It's a good method if you don't care to grow your portfolio in retirement.
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Re: Early retiree: market volitility and living expenses

Post by Outer Marker »

Tejfyy wrote: Mon Jan 24, 2022 5:16 pm This current drop in the market has made me nervous. Should I sell the SWTSX now? Or should I wait until I need the cash in June and decide then what to do: Liquidate a CD or sell the fund? The penalties are not outrageous, the interest rates on these CDs are 0.70% and 1.25%. I don't pay taxes on LT capital gains, but they do affect my ACA premium subsidy.
You don't seem nervous about your portfolio as a whole, but rather this one particular equity holding. My mom suffered from this same problem. I'd recommend you not hold individual equity positions, but roll them up into a single fund of funds. That will cushion the perceived ride. Something like the tax managed balanced fund - or its Schwab equivalent - might be appropriate. https://investor.vanguard.com/mutual-fu ... olio/vtmfx An important purpose of having a substantial fixed income allocation is so that you don't sell equities in a down market.
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Re: Early retiree: market volitility and living expenses

Post by wolf359 »

Tejfyy wrote: Tue Jan 25, 2022 11:29 pm The VPW allows me to run scenarios with these possibilities so I'm not sure why you think it's not appropriate. Maybe I'm missing something, but I cannot decide today what I'm going to do in 10 or 15 years.
VPW is designed to adapt to market conditions and provide the appropriate withdrawal rate so that your portfolio is not depleted before a certain age (usually 100.) The fact that you're asking a question about market volatility and you're concerned about running out of money implied that you don't understand the strategy. Not understanding the strategy is why it might not be appropriate. You shouldn't use an investment strategy that you do not understand.

It seems perhaps you do know what behavior you're going to get from VPW. If so, then it can work for you. Just set up a plan and write it down.
I plan on waiting as long as possible (till 70) to take social security but I may take it earlier. The Trust has said by 2034/35 it won't be able to pay full benefits. So that's something to consider. I have the same plan for the annuity which I'll likely take as a lifetime income.
It's interesting that people reach slightly different conclusions from the same information. I am planning to wait as long as possible to take Social Security (till 70) BECAUSE the Trust says that they might not pay full benefits by 2034/2035.

I'm viewing Social Security as longevity insurance, and I want a fixed income stream that is as large as possible for as long as possible. I want them to take a reduction of a larger amount. If I claim earlier than age 70, I'm not going to get the benefit long enough to make up for the reduction.

It's all future speculation in any case. By deciding now to claim at age 70 lets me change my mind if circumstances change between now and then. But once I actually file the claim, I'm mostly locked in.
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Re: Early retiree: market volitility and living expenses

Post by Tejfyy »

wolf359 wrote: Wed Jan 26, 2022 9:07 am
Tejfyy wrote: Tue Jan 25, 2022 11:29 pm The VPW allows me to run scenarios with these possibilities so I'm not sure why you think it's not appropriate. Maybe I'm missing something, but I cannot decide today what I'm going to do in 10 or 15 years.
VPW is designed to adapt to market conditions and provide the appropriate withdrawal rate so that your portfolio is not depleted before a certain age (usually 100.) The fact that you're asking a question about market volatility and you're concerned about running out of money implied that you don't understand the strategy. Not understanding the strategy is why it might not be appropriate. You shouldn't use an investment strategy that you do not understand.

It seems perhaps you do know what behavior you're going to get from VPW. If so, then it can work for you. Just set up a plan and write it down.
I understand perfectly well what the VPW does and what I can expect from it. You seem to not understand where I'm coming from.
wolf359 wrote: Wed Jan 26, 2022 9:07 am
Tejfyy wrote: Tue Jan 25, 2022 11:29 pm I plan on waiting as long as possible (till 70) to take social security but I may take it earlier. The Trust has said by 2034/35 it won't be able to pay full benefits. So that's something to consider. I have the same plan for the annuity which I'll likely take as a lifetime income.
It's interesting that people reach slightly different conclusions from the same information. I am planning to wait as long as possible to take Social Security (till 70) BECAUSE the Trust says that they might not pay full benefits by 2034/2035.

I'm viewing Social Security as longevity insurance, and I want a fixed income stream that is as large as possible for as long as possible. I want them to take a reduction of a larger amount. If I claim earlier than age 70, I'm not going to get the benefit long enough to make up for the reduction.

It's all future speculation in any case. By deciding now to claim at age 70 lets me change my mind if circumstances change between now and then. But once I actually file the claim, I'm mostly locked in.
And what makes you think I don't see Social Security as longevity insurance? You seem to be more interested in explaining than responding. We call it mansplaining in my neck of the woods :).
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