Author Topic: Anyone retire during the 2008+ Recession? What did you learn?  (Read 1736 times)

JoJo

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I'm hoping to retire in the next couple months.  For those of you that retired in a big economic downturn, did you do anything different than retiring in an up market?

* different allocations
* allocate more or less to cash?
* take advantage of "good deals" on real estate, housing, travel, vehicles, etc?
* any thing you would have done differently?

tooqk4u22

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Re: Anyone retire during the 2008+ Recession? What did you learn?
« Reply #1 on: April 09, 2020, 11:34:28 AM »
I didn't but I would say that if you are at your number after the market fell apart in the last month then you should be more than fine.

Greystache

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Re: Anyone retire during the 2008+ Recession? What did you learn?
« Reply #2 on: April 11, 2020, 08:47:34 AM »
I can't give you a personal account (I did not retire until 2015) but you might find this to be relevant :
https://www.gocurrycracker.com/how-are-the-2000-and-2008-retirees-doing-4-percent-rule/

spartana

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Re: Anyone retire during the 2008+ Recession? What did you learn?
« Reply #3 on: April 11, 2020, 09:54:11 AM »
I did but didn't do anything different. Had a decent sized EF in laddered CDs and bonds, no debt or mortgage, and low basic expenses so easy to just leave investments alone. I did take advantage of the greatly tanked real estate market in Calif (down approx 54% in my location) and bought a very inexpensive fixer/foreclosure with cash for very little. Also bought some cheap stock.  Both increased quite a bit over the following decade. Otherwise I chose to live a pretty low cost lifestyle and found I really enjoyed it much better than what my planned, more spendy, FIRE life was suppose to look like. So cutting expenses during the recession became a permanent thing and I'm happier for it.

Quiet Saver

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Re: Anyone retire during the 2008+ Recession? What did you learn?
« Reply #4 on: April 17, 2020, 06:34:59 AM »
During my forties and early fifties I "penciled in" that I would retire in 2004 at age at 56, partly because my wife and I were on a good savings path and partly because my wife had a secure job and she did not expect to retire until 63 or later.  When 2004 arrived I still really enjoyed my job and I did not want to retire.  Four years later, my long time boss had retired and was replaced by a real jerk (not just my opinion).  My job was no longer fun, our savings had continued to grow, and my wife was now saying she might work to age 68 or 70. 

In the fall of 2007 I started telling my friends and colleagues I was going to retire in June, 2008.  From October, 2007 to June, 2008 the market dropped 22%, but I retired anyway at the end of June.  The market continued to drop, to a low of 50% below October, 2007 in spring, 2009.  However, the market fully recovered in October, 2013, six years after the previous high in October, 2007.

Looking back, my wife and I did fine with my pension and her salary.  We have always had modest spending habits and throughout our careers we were able to save almost half of our total annual income.  Our asset allocation was 70% low ER stock index funds and 30% low ER bond index funds in 2007 and we never sold any of our savings while the market was down.

After 2013, of course, the market continued to climb and our total savings increased accordingly.  We were no longer adding to our savings and we had begun to give most of our dividends distributions to our children, to our grandchildren's 529 funds, and to charity. 

Now we are in our early 70s, both retired, and our SS and RMDs have begun (although we are only doing QCDs for 2020).  The market has dropped again, but we are more concerned about staying safe and sheltering in place.  As with the 2008 drop, I do not expect we will have to sell any of our savings during this drop, and also as with the 2008 drop, I am hopeful the market will be fully recovered within six years. 

I realize my wife and I have been very fortunate and I am concerned for the well being of low income seniors. I am giving 100% of my RMD to charity, with 75% of my QCD donations directed to a large senior center that serves our region.

« Last Edit: April 17, 2020, 06:43:42 AM by Quiet Saver »