Retirement - Managing your money

[Ixium]

I just did it the easy way and got a job that gives a defined benefit pension.

2% per year worked up to 35 years, using the average of your best 5 years. Even pays out if you retire early. My 25 years is at 46 years old.

If I were to retire today with 25 years (50%) I’d make 43k per year.

Any other savings is just a bonus. But can go pretty far without debt and 40k

[thomm225]

Originally Posted by clamshack

We have a boat mortgage and car loan at just under 4%. Our savings over the same period should make 5-6%. Why would anyone pay down those notes?

Notes?

What notes?

I don't do notes these days. I'm too old for that. In my 60's.

I paid $2,000 for my boat, and $40,000 for the house.

And all the cars (Jeeps) I've bought in the last 20 years or so I paid cash for. And none get traded in. They either go to my son or ex.

I did sell the 2002 Jeep Grand Cherokee though a couple months ago and it had 269,000 miles on it. Still have the 2004 in picture below, a 2007 Jeep GC Limited, and a 2010 Jeep GC.

The house is an old 2100 sq. ft. house (my parents old house) and I bought out my brothers portion although I don't live there yet.

It's in a rural area and I'm in the city near work. The ex is at the house.

[Captain Graham]

The S&P is back to an all time high.
As bear markets go it was very short only 2 years.

Some people saw the 5% interest rates last year and moved some of their money from stocks to these interest rate items.
So they locked in their stock loss put money into a 5% CD and missed the 2023 stock market rally.

For me this bear market has taught me.
1. Stay the course and do not panic during a Bear market.
2. Do not believe that this bear market is difference.
3. During the good times get ready for the next bear market.
In my case I am retiring in June 2024 and will have my bucket system ready before I retire.

What have you learn from this thread and the past bear market.

[Tedd]

Originally Posted by Captain Graham

So they locked in their stock loss put money into a 5% CD and missed the 2023 stock market rally.

As the old saying goes, "You haven't lost anything until you sell." I saw several people make the same mistake in 2008. Tragic.

Do not believe that this bear market is difference.

There's actually a book called "This Time It's Different" about how this time it's not different.

During the good times get ready for the next bear market.

And the reverse, if you can manage it. I got lucky in 2009 and was in a position to "buy in" at the bottom of the post-2008 bear market. Those investments jumped 40 percent in the first year.

[sailorboy1]

So all it means is I am back to where I was 2 years ago.

[Kinkircating]

Originally Posted by Captain Graham

The S&P is back to an all time high.
As bear markets go it was very short only 2 years.

Some people saw the 5% interest rates last year and moved some of their money from stocks to these interest rate items.
So they locked in their stock loss put money into a 5% CD and missed the 2023 stock market rally.

For me this bear market has taught me.
1. Stay the course and do not panic during a Bear market.
2. Do not believe that this bear market is difference.
3. During the good times get ready for the next bear market.
In my case I am retiring in June 2024 and will have my bucket system ready before I retire.

What have you learn from this thread and the past bear market.

All great points, this has been a hell of a run! Not to be a Debbie downer, but just keep in mind that your 2021 dollars at the previous market high do not have the same purchasing power that your 2023 dollars have, and it will take another 10%+ gain from here to be "back to where you were" from an actual net worth perspective. But hopefully also held diversified assets that have benefited from this inflation.

I've been retired early for a decade now, and what I learned the most from these past 2 years is don't freaking wait and life is short. I've lost 8 people in my life from age 54-70 all who had great plans for what they'd do when they had more time. People dissect/debate safe withdrawal rates projecting out until they are 100 years old with a zero percent chance of failure, when they should really consider that when you hit 55 you have a 20% probability of being dead in 20 years.

A life well lived isn't that expensive, so get busy enjoying it!

[Captain Graham]

Originally Posted by sailorboy1

So all it means is I am back to where I was 2 years ago.

Yes if you did not sell and lock in your losses.

But do understand that bear markets do happen and will happen.
So complaining about a bear market is like complaining about night time.
Accept it and have a plan to be ready for it

This was a very short bear market just 2 years and it tested some people.
Just think about what if this was a 5 year bear market.

In my case I will be ready with my buckets.

Also understand that bull markets do happen and will happen.
Bull market are larger then the bear markets so over the long run your investments should make about 10%.

I have no idea where the market will go next week, month or year but in 10 years your money should double.

[Tedd]

Originally Posted by sailorboy1

So all it means is I am back to where I was 2 years ago.

Not really. Two years ago you had way less money than it looked like you had. Now, you probably have about as much money as it looks like you have, which is somewhat more than what you "really" had two years ago.

[Captain Graham]

Originally Posted by Kinkircating

All great points, this has been a hell of a run! Not to be a Debbie downer, but just keep in mind that your 2021 dollars at the previous market high do not have the same purchasing power that your 2023 dollars have, and it will take another 10%+ gain from here to be "back to where you were" from an actual net worth perspective. But hopefully also held diversified assets that have benefited from this inflation.

I've been retired early for a decade now, and what I learned the most from these past 2 years is don't freaking wait and life is short. I've lost 8 people in my life from age 54-70 all who had great plans for what they'd do when they had more time. People dissect/debate safe withdrawal rates projecting out until they are 100 years old with a zero percent chance of failure, when they should really consider that when you hit 55 you have a 20% probability of being dead in 20 years.

A life well lived isn't that expensive, so get busy enjoying it!

Great point about waiting too long.
I have also had many friends and family die recently.
It does make you think and that is a big part of the reason I decided to retire in June 2024.

[LakeSuperior]

Originally Posted by Captain Graham

The S&P is back to an all time high.
As bear markets go it was very short only 2 years.

Some people saw the 5% interest rates last year and moved some of their money from stocks to these interest rate items.
So they locked in their stock loss put money into a 5% CD and missed the 2023 stock market rally.

For you, hindsight is 20/20 vision here, and FWIW, I have several friends that timed the bear market well and made good. On top of that, diversification is key, so some fraction of ones funds should be in CD's, real estate, etc.

In fact, when you finally retire you may want to keep 2 to 3 years cash out of the market so that when there is a bear market you don't have to sell stock or mutual funds to live as the selling at the bottom penalty is large.

My personal goal over the long haul is to make base hits not home runs.

[Captain Graham]

Originally Posted by LakeSuperior

For you, hindsight is 20/20 vision here, and FWIW, I have several friends that timed the bear market well and made good. On top of that, diversification is key, so some fraction of ones funds should be in CD's, real estate, etc.

In fact, when you finally retire you may want to keep 2 to 3 years cash out of the market so that when there is a bear market you don't have to sell stock or mutual funds to live as the selling at the bottom penalty is large.

My personal goal over the long haul is to make base hits not home runs.

Sorry I did not explain myself clearly.
You do need to have money out of the market to be able to ride out the next bear market.
But you need to do this before the bear hits.

If you read the first post I outlined my bucket strategy.
So when I retire in June 2024 I will have 3 years of withdrawals in cash out of the market.

So to your friends who timed the market and won, most people can not time the market and I would not recommend doing it.

My experience people who try to time the market only tell you when they win and do not admit their failures.

[sailorboy1]

Originally Posted by Tedd

Not really. Two years ago you had way less money than it looked like you had. Now, you probably have about as much money as it looks like you have, which is somewhat more than what you "really" had two years ago.

you should consider running for political office

I know how much I had 2 years ago and now. Granted it is mostly imaginary money on a computer screen till I try to get it.

[Tedd]

Originally Posted by sailorboy1

Granted it is mostly imaginary money on a computer screen till I try to get it.

No fair, that was my point!

[wsmurdoch]

You might enjoy reading "The Great Depression: A Diary" by Benjamin Roth

My grandparents lived through the depression as adults wth children. It was not 2 or 3 year event. Family fortunes were totally lost. Meals were missed. This book does the best job of matching what they told me it was like.

Amazon's description...
When the stock market crashed in 1929, Benjamin Roth was a young lawyer in Youngstown, Ohio. After he began to grasp the magnitude of what had happened to American economic life, he decided to set down his impressions in his diary.
This collection of those entries reveals another side of the Great Depression one lived through by ordinary, middle-class Americans, who on a daily basis grappled with a swiftly changing economy coupled with anxiety about the unknown future. Roth's depiction of life in time of widespread foreclosures, a schizophrenic stock market, political unrest and mass unemployment seem to speak directly to readers today.

[dannc]

Originally Posted by Tedd

As the old saying goes, "You haven't lost anything until you sell." I saw several people make the same mistake in 2008. Tragic.
...

I knew people who panicked in one of downturns around 1990 that sold their investments and lost a bunch of money. They were retired and had no way to recoup those loses. If they had just left the money alone....

Later,
Dan