Retirement Planning

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peddler12
Posts: 260
Joined: Sat Sep 03, 2011 10:01 pm

Retirement Planning

Post by peddler12 »

Good evening everyone. My portfolio is down just over 11%. I'm not panicking, but have a tremendous desire to steadfastly stay the course as all of you have taught me. If this is the beginning of a prolonged bear market, should I be concerned with my projected retirement date of September 30, 2028? I'm not worried. Just wanted a little encouragement from all the wonderful Bogleheads I read here every day. Thank you.
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Ben Mathew
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Re: Retirement Planning

Post by Ben Mathew »

There is no guarantee that the stock market will recover by a given date. If there is a prolonged bear market, you will have to either delay your retirement date or plan to withdraw less or do some combination of both.
Total Portfolio Allocation and Withdrawal (TPAW)
runner3081
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Re: Retirement Planning

Post by runner3081 »

Not sure why so many people ask questions about how long this will last. No one knows. Stay the course and what happens, happens.
Marseille07
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Re: Retirement Planning

Post by Marseille07 »

peddler12 wrote: Sat May 21, 2022 9:27 pm Good evening everyone. My portfolio is down just over 11%. I'm not panicking, but have a tremendous desire to steadfastly stay the course as all of you have taught me. If this is the beginning of a prolonged bear market, should I be concerned with my projected retirement date of September 30, 2028? I'm not worried. Just wanted a little encouragement from all the wonderful Bogleheads I read here every day. Thank you.
While it's too early to tell, there's a good chance you would have to be concerned with your retirement date.

I'm debating myself if I should walk this year w/ a high equities AA, or pull a one-more-year.
gips
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Re: Retirement Planning

Post by gips »

I think I read somewhere that even one more year provides a lot of cushion. I suppose it would be easy enough to model with the retirement tools.
Dregob
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Joined: Wed Sep 26, 2018 9:45 pm

Re: Retirement Planning

Post by Dregob »

gips wrote: Sat May 21, 2022 10:10 pm I think I read somewhere that even one more year provides a lot of cushion. I suppose it would be easy enough to model with the retirement tools.
No need to model. One more year helps because:
1-Increase in retirement savings
2-One less year of retirement savings needed.
AquaBliss
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Joined: Tue Apr 03, 2018 7:45 pm

Re: Retirement Planning

Post by AquaBliss »

Dregob wrote: Sat May 21, 2022 10:13 pm
gips wrote: Sat May 21, 2022 10:10 pm I think I read somewhere that even one more year provides a lot of cushion. I suppose it would be easy enough to model with the retirement tools.
No need to model. One more year helps because:
1-Increase in retirement savings
2-One less year of retirement savings needed.
You can say the same thing next year.

One more year of work at a job you hate is also:

1) 1 Year closer to death
2) 1 Year of freedom you can never get back

Do it now if you can, don't look back - enjoy your life, focus on simple pleasures.
NOLA
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Re: Retirement Planning

Post by NOLA »

peddler12 wrote: Sat May 21, 2022 9:27 pm Good evening everyone. My portfolio is down just over 11%. I'm not panicking, but have a tremendous desire to steadfastly stay the course as all of you have taught me. If this is the beginning of a prolonged bear market, should I be concerned with my projected retirement date of September 30, 2028? I'm not worried. Just wanted a little encouragement from all the wonderful Bogleheads I read here every day. Thank you.

Obviously, it’s difficult to tell. However, you are still 6 years away and if you are still contributing to a 401K etc, which I assume you are, you now buying stocks at a discount. So hopefully we will all have more than enough when the stock market reaches new heights again in the future!
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Wiggums
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Re: Retirement Planning

Post by Wiggums »

peddler12 wrote: Sat May 21, 2022 9:27 pm Good evening everyone. My portfolio is down just over 11%. I'm not panicking, but have a tremendous desire to steadfastly stay the course as all of you have taught me. If this is the beginning of a prolonged bear market, should I be concerned with my projected retirement date of September 30, 2028? I'm not worried. Just wanted a little encouragement from all the wonderful Bogleheads I read here every day. Thank you.
We are retired. You should hold x years of expenses in cash when you retire. We held three years of expenses because we are doing larger Roth conversions.

This is a good time for rebalancing the portfolio. You are working and getting cheaper shares. That sounds like a win-win to me.

If you hold cash, don’t be afraid to buy in this market. Remember that great wealth is made as market conditions improve.

If you recently bought equities, ignore any short term losses. We all have them.

When in doubt — Stay the course.
"I started with nothing and I still have most of it left."
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HMSVictory
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Re: Retirement Planning

Post by HMSVictory »

I'm a big fan of being debt free (including the house) to keep expenses low.

This has the dual pronged effect of reducing the overall risk of your personal balance sheet and eliminating your largest monthly expense (mortgage).

You can't control market returns but your sure as heck can control your spending and how much you need to live on. I am planing based upon what I need to spend and what I want to spend. My need to spend will be covered by my pension (you could buy an annuity if you wanted to accomplish the same thing) and my want to spend will be covered by my portfolio withdraws. I'm ignoring SS and it will be icing on the cake as I'm retiring at 51.

Flexibility is key and when you retire you need to be able to adjust your withdraws to correlate with market returns (good and bad).
Stay the course!
59Gibson
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Re: Retirement Planning

Post by 59Gibson »

Save more, cut expenses with little/no value to the bone
Keep investing
And live your life
There isn't anything else that can be done
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Kenkat
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Re: Retirement Planning

Post by Kenkat »

You are still six years out from your [key word] projected retirement date. A lot can happen between now and then, good and bad, hopefully more good than bad is all we can hope for.

The best thing you can do is save as much as possible and stick to your plan. I’ve always thought that a bell does not ring or a green light go on when you can afford to retire. There is naturally a lot of uncertainty; the best scenario in my opinion is to build in some buffer to your plan. So if you think you need $x to retire with a high probability of success, see if you can work past that a bit so you get to $x + 20% or $x + 50% or whatever you feel is possible before your actual targeted date. That way if something unexpected happens earlier than planned, you can still likely make retirement work as well as have that buffer built in just in case the markets do drop the year you actually plan to retire.

These market drops can be unsettling, but in your case, it is an opportunity to continue to invest at lower prices while you have still got money going in. Better a drop now than a year after you actually retire.
dbr
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Re: Retirement Planning

Post by dbr »

peddler12 wrote: Sat May 21, 2022 9:27 pm Good evening everyone. My portfolio is down just over 11%. I'm not panicking, but have a tremendous desire to steadfastly stay the course as all of you have taught me. If this is the beginning of a prolonged bear market, should I be concerned with my projected retirement date of September 30, 2028? I'm not worried. Just wanted a little encouragement from all the wonderful Bogleheads I read here every day. Thank you.
There is no way to know. You won't even know when 9/30/2028 arrives because you still have up to 30, 40, or 50 years ahead of you that you can't predict.

A practical option is to take the decision to retire on whatever you have on that day and make it work.
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Peter Foley
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Re: Retirement Planning

Post by Peter Foley »

Wiggums wrote:
This is a good time for rebalancing the portfolio. You are working and getting cheaper shares.
Agreed. This is a good low risk approach to take with potential long term benefits. At the same time one can look for opportunities to tax lost harvest, and adjust one's asset allocation so as to hold stocks in Roth and bonds in tax free.
Dregob
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Re: Retirement Planning

Post by Dregob »

AquaBliss wrote: Sun May 22, 2022 12:03 am
Dregob wrote: Sat May 21, 2022 10:13 pm
gips wrote: Sat May 21, 2022 10:10 pm I think I read somewhere that even one more year provides a lot of cushion. I suppose it would be easy enough to model with the retirement tools.
No need to model. One more year helps because:
1-Increase in retirement savings
2-One less year of retirement savings needed.
You can say the same thing next year.

One more year of work at a job you hate is also:

1) 1 Year closer to death
2) 1 Year of freedom you can never get back

Do it now if you can, don't look back - enjoy your life, focus on simple pleasures.
I agree but from a strictly financial perspective you will have more money and less time to spend it. FYI-I'm not following my advice!
ralph124cf
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Re: Retirement Planning

Post by ralph124cf »

Do you like your job? One more year.

Do you hate your job? Retire ASAP.

Ralph
Wannaretireearly
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Re: Retirement Planning

Post by Wannaretireearly »

I like the 2-3X in cash advice. My issue is I keep spending it/investing in taxable. I’ve got a 6 ish year goal too. I need to stick to my guns with keeping a taxable cash position. Having a paid off house is now nice too.

Flip side, I will feel like every year worked in a full time role, with limited flexibility, after 50 is a waste especially as kids will be in College then. Will take something significant to change my mind, given my father got sick and died in his late 50s.
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
ProsperGoalzz
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Re: Retirement Planning

Post by ProsperGoalzz »

Wiggums wrote: Sun May 22, 2022 3:15 am
peddler12 wrote: Sat May 21, 2022 9:27 pm Good evening everyone. My portfolio is down just over 11%. I'm not panicking, but have a tremendous desire to steadfastly stay the course as all of you have taught me. If this is the beginning of a prolonged bear market, should I be concerned with my projected retirement date of September 30, 2028? I'm not worried. Just wanted a little encouragement from all the wonderful Bogleheads I read here every day. Thank you.
We are retired. You should hold x years of expenses in cash when you retire. We held three years of expenses because we are doing larger Roth conversions.
How did you build up your cash balance? Asking for those within 5 years of retirement, like OP & hopefully me. Hope for a bull market during that timeframe and sell high? Maybe within a tax-advantaged account?
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ruralavalon
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Re: Retirement Planning

Post by ruralavalon »

peddler12 wrote: Sat May 21, 2022 9:27 pm Good evening everyone. My portfolio is down just over 11%. I'm not panicking, but have a tremendous desire to steadfastly stay the course as all of you have taught me. If this is the beginning of a prolonged bear market, should I be concerned with my projected retirement date of September 30, 2028? I'm not worried. Just wanted a little encouragement from all the wonderful Bogleheads I read here every day. Thank you.
I have no idea. But a 6 year bear market would be much longer than most. "The average length of a bear market is 349 days", Investopedia.

Morningstar (5/24/2022) "Is a Recession Likely? (And How Much Does It Matter?)", link.

Just continue your regular contributions every pay period, increase your contributions if practical. What is your current asset allocation? If you have a reasonable asset allocation just stay the course. Don't be concerned.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
invest4
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Re: Retirement Planning

Post by invest4 »

No one knows.

Make sure you continue to have an AA that fits your risk tolerance.

Continue to save and invest what you can.

See how things unfold and adapt accordingly when you are closer to your planned retirement date

- retire as planned

- retire with a modified plan (lower expenses and / or income)

- work longer - full or part time

- other
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