Anyone contemplating OLY (One Less Year)?

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Whatyear?
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Anyone contemplating OLY (One Less Year)?

Post by Whatyear? »

Hi,
I am curious - with the market run-up over the last couple of years, is anyone adjusting their plans to retire a year (or more) sooner? My "real" target date is March 2022, but I have to say it is tempting to just do it, since my portfolio is probably $200K higher right now than i forecasted it to be next year . . . Curious if others are debating the same thing.

Whatyear
Ed 2
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Re: Anyone contemplating OLY (One Less Year)?

Post by Ed 2 »

Whatyear? wrote: Sat Apr 10, 2021 11:35 am Hi,
I am curious - with the market run-up over the last couple of years, is anyone adjusting their plans to retire a year (or more) sooner? My "real" target date is March 2022, but I have to say it is tempting to just do it, since my portfolio is probably $200K higher right now than i forecasted it to be next year . . . Curious if others are debating the same thing.

Whatyear
I don’t. My target year approximately in 4-5 years. I don’t change my goal because of stock market ups or downs. I am actually trying to lower my expectations about market progression this decade so I will not get frustrated and make big mistakes by changing something in my portfolio. Besides our portfolio allocation was always aggressive regardless for many years.
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flyingaway
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Re: Anyone contemplating OLY (One Less Year)?

Post by flyingaway »

I was think to retire in a few years, then next, and probably this year. A lot of things can happen in the next few months. Overseas travel is something that is uncertain.

I might just walk out of my office and never return, although we are obligated to give 6 month notice.
poker27
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Re: Anyone contemplating OLY (One Less Year)?

Post by poker27 »

If you hit your # early, and are ready to go, why not? Scale back your AA if it’s necessary. Even with the recent run up, I’m not close
AnEngineer
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Re: Anyone contemplating OLY (One Less Year)?

Post by AnEngineer »

poker27 wrote: Sat Apr 10, 2021 11:49 am If you hit your # early, and are ready to go, why not? Scale back your AA if it’s necessary. Even with the recent run up, I’m not close
I've read (JL Collins I believe) point out that retiring when you reach a number makes you more susceptible to sequence of returns risk, as you are more likely to reach your number after several good years of stock returns and are likely to see reversion to the mean or even below average returns after you retire. That's conditional probability for ya.
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HomerJ
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Re: Anyone contemplating OLY (One Less Year)?

Post by HomerJ »

AnEngineer wrote: Sat Apr 10, 2021 11:56 am
poker27 wrote: Sat Apr 10, 2021 11:49 am If you hit your # early, and are ready to go, why not? Scale back your AA if it’s necessary. Even with the recent run up, I’m not close
I've read (JL Collins I believe) point out that retiring when you reach a number makes you more susceptible to sequence of returns risk, as you are more likely to reach your number after several good years of stock returns and are likely to see reversion to the mean or even below average returns after you retire. That's conditional probability for ya.
Sure, but if he takes that $200k extra, and keeps it in cash, he can use it to bridge those 1-3 years before his planned retirement date, which reduces the sequence of returns risk.

I'm in the same boat. Health care is the main unknown holding me back. My wife needs a lot of doctor visits and has RA (Rheumatoid arthritis). The medicine for that is not cheap, so we need to make sure we have good health care. Plus I still have a college-age son on my plan, so we'll have to figure out to handle him as well.

Slowly researching Healthcare.gov plans. We can use COBRA to get us through the first year after I retire, but then need to make sure we have a good plan to move to after that.
Last edited by HomerJ on Sat Apr 10, 2021 12:09 pm, edited 1 time in total.
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billthecat
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Re: Anyone contemplating OLY (One Less Year)?

Post by billthecat »

flyingaway wrote: Sat Apr 10, 2021 11:49 am I was think to retire in a few years, then next, and probably this year. A lot of things can happen in the next few months. Overseas travel is something that is uncertain.

I might just walk out of my office and never return, although we are obligated to give 6 month notice.
What happens if you don't give 6 months notice?
We cannot direct the winds but we can adjust our sails • It's later than you think • Ack! Thbbft!
AnEngineer
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Re: Anyone contemplating OLY (One Less Year)?

Post by AnEngineer »

HomerJ wrote: Sat Apr 10, 2021 12:04 pm
AnEngineer wrote: Sat Apr 10, 2021 11:56 am
poker27 wrote: Sat Apr 10, 2021 11:49 am If you hit your # early, and are ready to go, why not? Scale back your AA if it’s necessary. Even with the recent run up, I’m not close
I've read (JL Collins I believe) point out that retiring when you reach a number makes you more susceptible to sequence of returns risk, as you are more likely to reach your number after several good years of stock returns and are likely to see reversion to the mean or even below average returns after you retire. That's conditional probability for ya.
Sure, but if he takes that $200k extra, and keeps it in cash, he can use it to bridge those 1-3 years before his planned retirement date, which reduces the sequence of returns risk.
I agree if you have HIGHER than your number, you can adjust the asset allocation to approximate your original plan, taking this effect into account.
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Kenkat
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Re: Anyone contemplating OLY (One Less Year)?

Post by Kenkat »

Yes. I have targeted retirement in 2 years (@ 59) but tell people my retirement date is either Monday or five years from now, depending on the day.

Reasons to retire now are that I have plenty of money according to most retirement planner software, work is tiring sometimes and I’m not getting any younger.

Reasons to stay are that they pay me well, benefits are good, I don’t mind working that much and every year equates to about another $200/mo. pension and one less year I have to live off my portfolio until pension and social security kick in.
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Scott S
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Re: Anyone contemplating OLY (One Less Year)?

Post by Scott S »

billthecat wrote: Sat Apr 10, 2021 12:06 pm
flyingaway wrote: Sat Apr 10, 2021 11:49 amI was think to retire in a few years, then next, and probably this year. A lot of things can happen in the next few months. Overseas travel is something that is uncertain.

I might just walk out of my office and never return, although we are obligated to give 6 month notice.
What happens if you don't give 6 months notice?
I'm curious, too. Would they give you 6 months notice in advance of a layoff? :wink:
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dknightd
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Re: Anyone contemplating OLY (One Less Year)?

Post by dknightd »

Go for it. You only die once
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
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Candor
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Re: Anyone contemplating OLY (One Less Year)?

Post by Candor »

I was planning to retire next July but mostly due to some unwelcome work dynamics I will be retiring this June. The run-up in the market definitely helps. I made some conservative projections in 2014 through 2026 and I am currently at the 2026 dollar amount I was anticipating (with 5% return from equities). Financially, I would have rather worked until next year but thankfully I don't have to. :D
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BrooklynInvest
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Re: Anyone contemplating OLY (One Less Year)?

Post by BrooklynInvest »

I'm sticking with the plan, for different reasons.

I'd hoped to pay off the house and hit my number by next spring. A little help from the markets and a year of not doing much and being able to stay safe meant that I'm ahead of schedule.

Problem is I want to go back to school and the school's still closed so rather than sit around I'm gonna try and do 11 more months at my rather unpleasant job, take plenty of vacation towards the end of the year and pull the plug next spring. A little extra financial cushion. We'll see what happens.
poker27
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Re: Anyone contemplating OLY (One Less Year)?

Post by poker27 »

HomerJ wrote: Sat Apr 10, 2021 12:04 pm
AnEngineer wrote: Sat Apr 10, 2021 11:56 am
poker27 wrote: Sat Apr 10, 2021 11:49 am If you hit your # early, and are ready to go, why not? Scale back your AA if it’s necessary. Even with the recent run up, I’m not close
I've read (JL Collins I believe) point out that retiring when you reach a number makes you more susceptible to sequence of returns risk, as you are more likely to reach your number after several good years of stock returns and are likely to see reversion to the mean or even below average returns after you retire. That's conditional probability for ya.
Sure, but if he takes that $200k extra, and keeps it in cash, he can use it to bridge those 1-3 years before his planned retirement date, which reduces the sequence of returns risk.

I'm in the same boat. Health care is the main unknown holding me back. My wife needs a lot of doctor visits and has RA (Rheumatoid arthritis). The medicine for that is not cheap, so we need to make sure we have good health care. Plus I still have a college-age son on my plan, so we'll have to figure out to handle him as well.

Slowly researching Healthcare.gov plans. We can use COBRA to get us through the first year after I retire, but then need to make sure we have a good plan to move to after that.
I think it comes down to your original plan. If you decided to retire when you hit x, and you hit x, what gives? Future returns might be better or worse than previous, nobody knows. I think this puts you in the ‘one more year’ camp. It’s obviously an emotional decision, I’m sure I’d be considering the same.
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Re: Anyone contemplating OLY (One Less Year)?

Post by Wanderingwheelz »

I quit last year.

Go for it.
Being wrong compounds forever.
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Re: Anyone contemplating OLY (One Less Year)?

Post by sailaway »

If OMY decides to OLY in the middle of the year, what are they?
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Re: Anyone contemplating OLY (One Less Year)?

Post by gwe67 »

I was shooting for 2022 or 2023 but retired in 2020. Long bull market and reaching pension eligibility were key factors, as well as not liking work from home.
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Re: Anyone contemplating OLY (One Less Year)?

Post by surfstar »

We're running the numbers on 5 less years. How much leaner would retirement be if we could bow out in 5 vs 10 years as previously planned. Hoping for 4-5 good years of returns to help...

If we can live "cheap" for 4-5 years, it could work nicely. Rent out our place while we travel vs letting it sit empty. Stuff like that makes a huge difference and if we can gain 5 free years from ages 45-50, that's huge IMO.

If you have "enough", go for it! You can always cut back on spending. Find a part-time job, etc, if things get tight. From most BH reports, that never seems required. Everyone's SWR is conservative.
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Re: Anyone contemplating OLY (One Less Year)?

Post by SrGrumpy »

billthecat wrote: Sat Apr 10, 2021 12:06 pm
flyingaway wrote: Sat Apr 10, 2021 11:49 am I was think to retire in a few years, then next, and probably this year. A lot of things can happen in the next few months. Overseas travel is something that is uncertain.

I might just walk out of my office and never return, although we are obligated to give 6 month notice.
What happens if you don't give 6 months notice?
You don't get the nifty acrylic tombstone or the delightful office tea party.
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rob
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Re: Anyone contemplating OLY (One Less Year)?

Post by rob »

Yeh... with the runup since last year I've been leaning to the nearer end of my target date... I suspect that will change based on market conditions but who knows. My target is set so I'm done with college expenses but if market holds up might cheat a year or two earlier...
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Re: Anyone contemplating OLY (One Less Year)?

Post by UpperNwGuy »

Most responses in this thread have to do with hitting numbers. My experience was different. When I turned 50, I ran some numbers and decided I could retire at age 64. By my late 50s I realized that job stress was affecting my health/stamina, and I was losing patience with the games people play in large organizations, so I revised my retirement plans to age 62. Soon after I hit 60, our organization got a new leader, someone who did not like me, and I knew it was time for me to leave, so I retired at age 61. My numbers were not a factor in either decision to move up my retirement. I simply decided that I would lower my planned retirement lifestyle to fit within the lower numbers. That was nearly a decade ago, and retirement has worked out fine for me.
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HomerJ
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Re: Anyone contemplating OLY (One Less Year)?

Post by HomerJ »

poker27 wrote: Sat Apr 10, 2021 1:05 pm
HomerJ wrote: Sat Apr 10, 2021 12:04 pm
AnEngineer wrote: Sat Apr 10, 2021 11:56 am
poker27 wrote: Sat Apr 10, 2021 11:49 am If you hit your # early, and are ready to go, why not? Scale back your AA if it’s necessary. Even with the recent run up, I’m not close
I've read (JL Collins I believe) point out that retiring when you reach a number makes you more susceptible to sequence of returns risk, as you are more likely to reach your number after several good years of stock returns and are likely to see reversion to the mean or even below average returns after you retire. That's conditional probability for ya.
Sure, but if he takes that $200k extra, and keeps it in cash, he can use it to bridge those 1-3 years before his planned retirement date, which reduces the sequence of returns risk.

I'm in the same boat. Health care is the main unknown holding me back. My wife needs a lot of doctor visits and has RA (Rheumatoid arthritis). The medicine for that is not cheap, so we need to make sure we have good health care. Plus I still have a college-age son on my plan, so we'll have to figure out to handle him as well.

Slowly researching Healthcare.gov plans. We can use COBRA to get us through the first year after I retire, but then need to make sure we have a good plan to move to after that.
I think it comes down to your original plan. If you decided to retire when you hit x, and you hit x, what gives? Future returns might be better or worse than previous, nobody knows. I think this puts you in the ‘one more year’ camp. It’s obviously an emotional decision, I’m sure I’d be considering the same.
The problem is when you hit x 2-5 years early.
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Re: Anyone contemplating OLY (One Less Year)?

Post by flyingaway »

billthecat wrote: Sat Apr 10, 2021 12:06 pm
flyingaway wrote: Sat Apr 10, 2021 11:49 am I was think to retire in a few years, then next, and probably this year. A lot of things can happen in the next few months. Overseas travel is something that is uncertain.

I might just walk out of my office and never return, although we are obligated to give 6 month notice.
What happens if you don't give 6 months notice?
I'm a professor, I cannot quit in the middle of the semester. Other than that, I don't think they can do anything to me.
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Re: Anyone contemplating OLY (One Less Year)?

Post by Marseille07 »

poker27 wrote: Sat Apr 10, 2021 1:05 pm I think it comes down to your original plan. If you decided to retire when you hit x, and you hit x, what gives? Future returns might be better or worse than previous, nobody knows. I think this puts you in the ‘one more year’ camp. It’s obviously an emotional decision, I’m sure I’d be considering the same.
You quit working, of course. I don't think it's practical to turn in 2-weeks on the day of hitting X, but something like EOY or whatever makes sense.

Future returns are irrelevant unless you fall below X; it's either you hit X or you don't.
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Re: Anyone contemplating OLY (One Less Year)?

Post by HomerJ »

Marseille07 wrote: Sat Apr 10, 2021 2:58 pm
poker27 wrote: Sat Apr 10, 2021 1:05 pm I think it comes down to your original plan. If you decided to retire when you hit x, and you hit x, what gives? Future returns might be better or worse than previous, nobody knows. I think this puts you in the ‘one more year’ camp. It’s obviously an emotional decision, I’m sure I’d be considering the same.
You quit working, of course. I don't think it's practical to turn in 2-weeks on the day of hitting X, but something like EOY or whatever makes sense.

Future returns are irrelevant unless you fall below X; it's either you hit X or you don't.
Again, X is not the only variable. Age also matters.

$2 million at 60 is different than $2 million at 50.
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Re: Anyone contemplating OLY (One Less Year)?

Post by EnjoyIt »

We went part time a few years back when we hit X earlier than expected. The goal was always part time and we did it about 1-2 year earlier than projected. Great decision.
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Re: Anyone contemplating OLY (One Less Year)?

Post by watchnerd »

I thought this was about Olympia beer.
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Re: Anyone contemplating OLY (One Less Year)?

Post by Marseille07 »

HomerJ wrote: Sat Apr 10, 2021 3:56 pm
Marseille07 wrote: Sat Apr 10, 2021 2:58 pm
poker27 wrote: Sat Apr 10, 2021 1:05 pm I think it comes down to your original plan. If you decided to retire when you hit x, and you hit x, what gives? Future returns might be better or worse than previous, nobody knows. I think this puts you in the ‘one more year’ camp. It’s obviously an emotional decision, I’m sure I’d be considering the same.
You quit working, of course. I don't think it's practical to turn in 2-weeks on the day of hitting X, but something like EOY or whatever makes sense.

Future returns are irrelevant unless you fall below X; it's either you hit X or you don't.
Again, X is not the only variable. Age also matters.

$2 million at 60 is different than $2 million at 50.
I don't think age matters, because X is a multiple of your expected expenses. I can walk with my number X no matter how old I am, given today's pricing. A bigger issue I'm facing is, X can grow over time due to inflation.
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Re: Anyone contemplating OLY (One Less Year)?

Post by cogito »

We're only 50% FI, but I'm so burnt out from the last year that I'm thinking of just taking a year or two off to learn new things, play with the kids, noodle around the house, and figure out what I want to do for my career
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Re: Anyone contemplating OLY (One Less Year)?

Post by Wannaretireearly »

I've thought about OLY, but will likely stick to the plan. Get kids thru grade school, 8 more years, and this times well with my 50th birthday (perhaps an African trip to celebrate?). Then hopefully slow travel with DW. Whatever $X I have then will be it, hopefully. Divide by 40 ish (2.5%) and start ER. Perhaps a fun side job, or not....
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Re: Anyone contemplating OLY (One Less Year)?

Post by marcopolo »

HomerJ wrote: Sat Apr 10, 2021 12:04 pm
AnEngineer wrote: Sat Apr 10, 2021 11:56 am
poker27 wrote: Sat Apr 10, 2021 11:49 am If you hit your # early, and are ready to go, why not? Scale back your AA if it’s necessary. Even with the recent run up, I’m not close
I've read (JL Collins I believe) point out that retiring when you reach a number makes you more susceptible to sequence of returns risk, as you are more likely to reach your number after several good years of stock returns and are likely to see reversion to the mean or even below average returns after you retire. That's conditional probability for ya.
Sure, but if he takes that $200k extra, and keeps it in cash, he can use it to bridge those 1-3 years before his planned retirement date, which reduces the sequence of returns risk.

I'm in the same boat. Health care is the main unknown holding me back. My wife needs a lot of doctor visits and has RA (Rheumatoid arthritis). The medicine for that is not cheap, so we need to make sure we have good health care. Plus I still have a college-age son on my plan, so we'll have to figure out to handle him as well.

Slowly researching Healthcare.gov plans. We can use COBRA to get us through the first year after I retire, but then need to make sure we have a good plan to move to after that.
We were in the same situation a few years ago. Wife has chronic condition that is not life threatening but requires a lot of follow-up visits, medicines, and monitoring tests. Younger son still in college. We have found the ACA plans to work quite well for us. We have an HDPD that is tied into BCBS network nationwide. We pay very low premiums (even lower for next couple of years at least), and the deductible and co-pays are manageable. I suspect a lot of that depends on the plans offered in your particular area.

OP, we retired about a year and a half before we had planned, not due to market run-up, but because an opportunity presented itself for me to receive a very generous buyout package from my employer that was more lucrative than working another 18 months.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Anyone contemplating OLY (One Less Year)?

Post by billthecat »

marcopolo wrote: Sat Apr 10, 2021 4:33 pm
HomerJ wrote: Sat Apr 10, 2021 12:04 pm
AnEngineer wrote: Sat Apr 10, 2021 11:56 am
poker27 wrote: Sat Apr 10, 2021 11:49 am If you hit your # early, and are ready to go, why not? Scale back your AA if it’s necessary. Even with the recent run up, I’m not close
I've read (JL Collins I believe) point out that retiring when you reach a number makes you more susceptible to sequence of returns risk, as you are more likely to reach your number after several good years of stock returns and are likely to see reversion to the mean or even below average returns after you retire. That's conditional probability for ya.
Sure, but if he takes that $200k extra, and keeps it in cash, he can use it to bridge those 1-3 years before his planned retirement date, which reduces the sequence of returns risk.

I'm in the same boat. Health care is the main unknown holding me back. My wife needs a lot of doctor visits and has RA (Rheumatoid arthritis). The medicine for that is not cheap, so we need to make sure we have good health care. Plus I still have a college-age son on my plan, so we'll have to figure out to handle him as well.

Slowly researching Healthcare.gov plans. We can use COBRA to get us through the first year after I retire, but then need to make sure we have a good plan to move to after that.
We were in the same situation a few years ago. Wife has chronic condition that is not life threatening but requires a lot of follow-up visits, medicines, and monitoring tests. Younger son still in college. We have found the ACA plans to work quite well for us. We have an HDPD that is tied into BCBS network nationwide. We pay very low premiums (even lower for next couple of years at least), and the deductible and co-pays are manageable. I suspect a lot of that depends on the plans offered in your particular area.

OP, we retired about a year and a half before we had planned, not due to market run-up, but because an opportunity presented itself for me to receive a very generous buyout package from my employer that was more lucrative than working another 18 months.
I keep hearing about people getting that. I don't know how I'm going to be able to get something like that. If my employer offered me a severance, I'd jump on it and retire. :x
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Re: Anyone contemplating OLY (One Less Year)?

Post by stocknoob4111 »

no because you are at increase SORR now due to the market being at all time highs (in terms of valuation), I think this is the time to create a good size buffer
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Re: Anyone contemplating OLY (One Less Year)?

Post by marcopolo »

stocknoob4111 wrote: Sat Apr 10, 2021 4:48 pm no because you are at increase SORR now due to the market being at all time highs (in terms of valuation), I think this is the time to create a good size buffer
The market spends about 1/3 of its time within 5% of "all time highs"

During bull runs, that constraint could make it tough to retire.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Anyone contemplating OLY (One Less Year)?

Post by tooluser »

watchnerd wrote: Sat Apr 10, 2021 4:03 pm I thought this was about Olympia beer.
:beer Used to see those big plastic balls on the side of the freeway all the time, usually with a little bit of the cardboard box still in place.
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tooluser
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Re: Anyone contemplating OLY (One Less Year)?

Post by tooluser »

I think the plan should be to have always had a buffer in the plan. But I will say that my buffer has gotten bigger as I refined my plan. Some of that was due to not being 55 yet, the minimum age to claim my pension while "in service", so what else could I do? (I am 55 now.)

But I found other ways to add more buffer:
1) Don't include social security in the plan except as a buffer to be claimed at age 62+.
2) Assume a perpetual withdrawal rate instead of the usual 4% or whatever higher number is calculated (portfoliovisualizer.com can help here).
3) Have a large travel, hobby, fix-it, or new car budget that can easily be postponed when times are tough.
4) Have a retirement budget to know what your core expenses are - necessities plus a little more, in case things get really tough.
5) Move to a lower cost of living area after retirement, but keep the HCOL budget until you know how expenses really break out in the LCOL area.
6) If moving from HCOL and buying a new residence on the LCOL side, keep any excess capital gains in reserve as a house fix-up/move-in fund, rather than counting it as part of the portfolio.

At 55 I'm where I thought I would be at 60 a couple of years ago. Definitely thinking of going OLY, perhaps even if I am at only 0.99x. Even with a 50% stock market decline I will be well above the amount from #4 above. How much is one year of your life worth?
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Re: Anyone contemplating OLY (One Less Year)?

Post by Silverado »

watchnerd wrote: Sat Apr 10, 2021 4:03 pm I thought this was about Olympia beer.
Nah, nothing that good. Just retirement...
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Re: Anyone contemplating OLY (One Less Year)?

Post by Silverado »

I am definitely in this camp. Not just the run-up, but just in general getting a better picture of what we need.
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Re: Anyone contemplating OLY (One Less Year)?

Post by rich126 »

I've pondered retiring earlier than my original 60 but won't do it. I think we would be ok but a few things will keep me going. My pension and health insurance doesn't start until 60. Currently I've taken some time off and reduced my hours to 3 days a week so that has been nice to enjoy life and recharge my batteries.

I'll likely take a new job shortly and will work maybe 2 years to 60 or if I like it, or if they allow for reduced hours or hourly rate, I could go until 62.

It may also depend on the housing market. Will eventually buy something but I have no plans to get in bidding wars. Will sit this out. And if things don't improve, in retirement a commute is no longer a concern so I can always buy further out.
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fortunefavored
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Re: Anyone contemplating OLY (One Less Year)?

Post by fortunefavored »

My 7 years ago plan was "retire at 50" - hit my number at 47, pulled the plug in January.

My only regret is not doing it sooner. Assuming you have a reason to quit (travel, time with family, you hate your job, etc.) - do it.
Clammypollack
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Re: Anyone contemplating OLY (One Less Year)?

Post by Clammypollack »

I’m 64 and am going to base my retirement date on about 60% when I am mentally ready and 40% when I’m financially ready. I know that sounds stupid but I’m pretty much at my number now. I’m more concerned about what I’m going to do when I retire. I’m afraid I mentally need to work and I’m going to need a plan which I don’t have yet. Also, my wife needs to work 2 more years to lock in health care so I figure I will work too. I say this now because my job is good. They pay me for too much money to do far too little and I find it interesting to do. As soon as that ends and somebody makes my life miserable there, I will be gone. It is a new and liberating feeling to know that one can truly tell the powers that be to take this job and shove it, when circumstances require it.
flyingaway
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Re: Anyone contemplating OLY (One Less Year)?

Post by flyingaway »

For most people, doing OMY is for money. Even if they don't need money, more money does not hurt. More money gives you more safety, more options to spend (or not) in the future, can do a lot of things with more money.

Many people do not want to admit, but that is the truth under some grander disguises, such as love the job, like the colleagues, fell contributions to the society, etc.

If money is really not a problem, OLY or many less years can be done with ease.
EnjoyIt
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Re: Anyone contemplating OLY (One Less Year)?

Post by EnjoyIt »

flyingaway wrote: Sun Apr 11, 2021 11:58 am For most people, doing OMY is for money. Even if they don't need money, more money does not hurt. More money gives you more safety, more options to spend (or not) in the future, can do a lot of things with more money.

Many people do not want to admit, but that is the truth under some grander disguises, such as love the job, like the colleagues, fell contributions to the society, etc.

If money is really not a problem, OLY or many less years can be done with ease.
You and I have talked about this. OMY has a price. It is that additional year. For some it is worth it, for others it is not. Same goes in the other direction. How much does OLY cost you and is the year worth that price.

What is crazy is that once you hit 25x each additional year worked provides well over 1 year expenses. It’s so easy to just keep working and watch compounding do it’s magic. But there is a price you pay for that money. That price is the remaining free time you have. The price is the health toll working takes via stress and potentially decreased sleep. Maybe eating worse and exercising less when working full time. OMY isn’t cheep. Just as one less year isn’t cheap either. Again, it is what is more important to the person making that decision.

If at all possible in one’s career I would recommend trying part time before calling it quits. You get the best of both worlds.
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Whatyear?
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Re: Anyone contemplating OLY (One Less Year)?

Post by Whatyear? »

OP here. Thanks so much for the replies. I love hearing the perspectives. In my case I will most likely stick with my original plan and retire next March. I’ll have two kids in college this fall and the third will be a senior in HS. So the extra year of income including final 401k vesting, stock vesting and year-end bonus is something I can’t in good conscience pass up. So I will just watch the calendar pages turn knowing it’s just that much closer!
mike_in_ny
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Re: Anyone contemplating OLY (One Less Year)?

Post by mike_in_ny »

EnjoyIt wrote: Sun Apr 11, 2021 2:19 pm
What is crazy is that once you hit 25x each additional year worked provides well over 1 year expenses. It’s so easy to just keep working and watch compounding do it’s magic.
This is a really interesting point. At 8% return on your portfolio, 25x will grow to 27x without any additional savings. So OMY can easily add a huge amount of buffer.
2pedals
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Re: Anyone contemplating OLY (One Less Year)?

Post by 2pedals »

I had enough when I retired in 2018 at age 59 but I was planning to keep working until age 62. After the mega corp froze the defined pension plan, I decided that it was time to retire at 59. Now I am actually glad that this happened. In my case I don't see how the extra savings from working would have made things any better. I have been happily retired since. Extra money wouldn't have made up for the lost time.
flyingaway
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Re: Anyone contemplating OLY (One Less Year)?

Post by flyingaway »

mike_in_ny wrote: Mon Apr 12, 2021 6:53 pm
EnjoyIt wrote: Sun Apr 11, 2021 2:19 pm
What is crazy is that once you hit 25x each additional year worked provides well over 1 year expenses. It’s so easy to just keep working and watch compounding do it’s magic.
This is a really interesting point. At 8% return on your portfolio, 25x will grow to 27x without any additional savings. So OMY can easily add a huge amount of buffer.
Especially the past few years, not doing OMY is a real opportunity cost.

On the other hand, if you do OLY and move you portfolio to a more conservative asset allocation, then the market crashes, you will be a winner with OLY.
flyingaway
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Re: Anyone contemplating OLY (One Less Year)?

Post by flyingaway »

HomerJ wrote: Sat Apr 10, 2021 12:04 pm
Sure, but if he takes that $200k extra, and keeps it in cash, he can use it to bridge those 1-3 years before his planned retirement date, which reduces the sequence of returns risk.

I'm in the same boat. Health care is the main unknown holding me back. My wife needs a lot of doctor visits and has RA (Rheumatoid arthritis). The medicine for that is not cheap, so we need to make sure we have good health care. Plus I still have a college-age son on my plan, so we'll have to figure out to handle him as well.

Slowly researching Healthcare.gov plans. We can use COBRA to get us through the first year after I retire, but then need to make sure we have a good plan to move to after that.
I read a lot of posts about using COBRA for the first year or few months. My understanding is that COBRA is much more expensive than ACA, so why not move to ACA directly?

(I am in a similar situation. After retiring and before 65, we can buy employer's health insurance for about $1,400 a month, which is much more expensive (but better) than ACA with subsidies. The problem is that, if we decide not to buy the employer's health insurance at the retirement, we cannot go back to their system.)
Topic Author
Whatyear?
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Re: Anyone contemplating OLY (One Less Year)?

Post by Whatyear? »

I plan to use COBRA initially just because I know what I’ll be getting, and so I will have time to properly research ACA. I have my husband and three kids on my policy so I need to make sure everyone stays covered for things. I’m sure we can qualify for much cheaper insurance but I’ve read you need to make sure key doctors or facilities you use are covered in the HMO type plans ACA typically offers. At least in my area.
Runyer
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Re: Anyone contemplating OLY (One Less Year)?

Post by Runyer »

Yes, considering. But, not necessarily due to market positive returns. Although, it certainly doesn’t hurt. Planning on July 2022. I’m just done with dealing with COVID-19 related challenges! Can I go another year? Not sure, yet.
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