When is the best time to retire???

[michealbarnes]

Market timing discussion aside.  Would it theoretically be better to FIRE when the economy is booming like it is right now or when we are in a recession?  The pro for FIRE'ing while its booming is that the extra income you would earn while working during a hot economy would be invested in a market that is also high, so may end up losing the extra money you put in when the recession hits.  If you wait until a recession to FIRE then you would be losing the opportunity to invest more money while the market is down.   Another consideration is that it is harder to find a well paying job during a recession.  I'm leaning towards (if you had a crystal ball) it would be best to FIRE after riding out a recession with a good job and then quitting as the economy reached breakeven and started moving into a boom.

[2Cent]

I would say that if it matters you're not FI. I'm sure that if I retire I will not depend on the stock market going only up. Things like a paid off house and car and solar panels are good hedges.

[A Fella from Stella]

On a Monday. You're sitting there doing your TPS reports and then you're like "forget this!" and you just leave.

Okay, in all seriousness, my plan is that it's when I lock in a particular amount of cash, my pension, and when my kids are finished with high school.

[Metalcat]

Yeah, that's what sequence of return risk is all about.

You should have your finances organized to mitigate that risk so that it doesn't matter when you FIRE.

[DadJokes]

The 4% rule of thumb is so conservative that it would take a massive recession (2008 levels) to really impact you. The 4% rule is based on a 50/50 allocation between stocks and bonds, so smaller recessions really shouldn't impact your net worth too much. As others have said, if you are close enough that it matters, then you aren't FI yet.

Personally, I'm not sure I even plan to wait until 4% to declare myself FI. A 5-6% SWR is very safe as well, especially if you plan to still bring in some sort of money through part-time work or whatever.

[Freedomin5]

If you have enough to retire during a recession, then you have enough to retire. Of course, as mentioned above, you should already have a plan to mitigate sequence of returns risk, whether it is a yield shield, or a couple years of expenses in cash or cash-like investment vehicles, or a reverse glide path, or other streams of income so you don’t need to sell your equity index funds during the recession.

[terran]

From a sequence of return risk perspective it would be best to retire on the very last day of a huge recession when the market is about to go up for several years. However, this is just about a useful a piece of advice as saying it's best to retire when you have more than enough money to retire. If we could all time retirement perfectly like this we would need to save a lot less before we retired, but we can't, so we save more than we'll probably need in case we accidentally do the opposite and retire on the last day before a long recession.

[wageslave23]

This a copy and paste of a thread I started 2 months ago

[DadJokes]

That's...weird. I guess some people just get their kicks in peculiar ways.

[GuitarStv]

On a Monday. You're sitting there doing your TPS reports and then you're like "forget this!" and you just leave.

Oh no.  That's a terrible way to retire.

I'm not going to stop going in to the office after retirement . . . just stop working when I do get there.  As long as you access badge still works you should take advantage of the free internet, A/C and TP.

[FrugalToque]

Original topic is here.  Locking this dupe.

https://forum.mrmoneymustache.com/welcome-to-the-forum/when-is-the-best-time-to-retire/msg2383949/#msg2383949