The 20th century is when most of the data for simulations and the Trinity study are from and it was the century of American exceptionalism. I do not have optimistic feelings that this will be true in the 21st century.
I agree, but that's only a problem if you don't invest in international index funds and/or you believe that the entire human race is going to be less profitable/productive than the 20th century, right?
I do have some money in international funds and global corporations. I don't think the entire human race is going to be less profitable/productive than in the 20th century, but the growth rate certainly could slow, and that's why 20th century US stock returns were ~7% annually in real terms. Productivity growth slows even a bit and that brings the rate of return over inflation down significantly. The issue with "emerging market" stocks is they may increase returns but will also increase variance.
But, the point of my post was not to debate whether there will be growth in the market, it was more about worrying about retiring for 40+ years and general uncertaintanty in the lead up to ER and how others deal with it. Maybe I'm the only one who is getting close to the edge of the cliff (2.5 months) and am not certain about making the leap, but I doubt it.
Well, I'll be almost 7 months behind you, so I'm probably not experiencing the uncertainty to the same degree you are, but just last night I did have a freak out about it. I worry about my pension system collapsing (it's solid right now, but you know what they say about pension systems), healthcare (also an American, so a more unique worry), the stock market, and of course there are innumerable other uncertainties. I don't pretend to have the right answer, but I made a value judgment about these things (including the unknown unknowns) several months ago when I decided I'd pull the plug on 2/15/19, after careful consideration. No new information has come to light (although the unknown unknowns continue to be unknown) and there's no indication that I failed to consider important information, so I decided (or am still trying to decide by telling myself) there's no actual reason to change the judgment I made then. It seems to me that unless one of those things is true, the uncertainty is a natural human emotion to deal with but not a reason to OMY or actually change any other plans. For me, I'm trying to treat and accept the uncertainty and other emotions, but not in a way that will allow them to hijack my plans, until and unless I learn that my original decision may have been flawed in some way.
All I can do is share what helps me deal with those fears. What percentage reduction in spending could you weather for a year or two and still have a better time than if you were working? Think about all the things you are looking forward to doing that cost diddly squat. Imagine taking a year to concentrate on them while the markets recover. How much fun would you have in that year?
Great points, thanks. We could weather a huge reduction in spending. I wonder if some of the fear is "fear of missing out" on what additional money could by. I think psychologically the shift from accumulation to withdrawing phase is on my mind right now, possibly because I've been looking at withdrawal strategies a lot lately.
Ironically, freaking big data at facebook is inside my head and I just had this sponsored listcicle clickbait show up on my feed. It's not horrible and to save you the clicks, here it is:
21-unvarnished-truths-about-retirement (Some are less about retirement than life in general. Put 'em on posters with photos of beaches and mountains and you've got yourself a side gig selling them.)
1. Even though you are retired, you don’t have enough time for everything. Everyone dies with things in their inbox. Do the best you can and live your definition of a full life.
2. Be curious. See both sides. Stubbornness is not strength. When given new information, strong people develop and evolve their opinions. We can grow when we can admit we are wrong. Your life stagnates when you are wrong, but you refuse to admit it.
3. Negativity wastes life. Being positive and optimistic in the present has a favorable impact on the future. Yes, bad things happen, but so do good ones, and we tend to steer toward the things on which concentrate.
4. You don’t have to wait for an apology to forgive. We have all been wronged at one time or another. Waiting for an apology from someone who may never give offer one is a waste of life. Who cares? Hell, if this is a gray area and it’s possible the other person is waiting for an apology from you, apologize first. What does it matter? Life is too precious to play those kind of games.
5. It is okay to fail. Failure is part of life even in retirement. Failure teaches valuable lessons. In fact, we learn more from our failures than our successes. Expect success, but don’t worry about it too much. It is the journey that matters.
6. Take care of yourself. You aren’t much use to yourself or anyone else if you don’t. Looking out for your health and happiness is not the same as being selfish. This is fundamental.
7. Ambition can be a killer. I hate to break it to you, but you aren’t going to be Number One in everything you do. Breathe, and be satisfied, with the act of living today. Don’t let blind ambition cause you to lose sight of what is important. Savour all of life’s moments, even the bad ones, because you only get so many and you may wish you had paid more attention.
8. Your aspirations mean nothing. Well, they mean nothing if you don’t make an effort to realize them. Take action to get the things you want.
9. Stop complaining. Most people don’t care about your problems; some are happy you have them. Complaining only serves to keep negatives at the center of your life.
10. Let it go. Everyone has regrets, but don’t live a life of sorrow. The past is gone; find a way to come to terms with it. You may be able to reverse a bad situation that haunts you from the past, but you can’t turn back time.
11. You can’t make people happy. You can listen. You can be kind. You can smile. You can respect. You can offer assistance. You can contribute tools. But people are responsible for their own happiness (see No. 9).
12. You get to choose what matters. You didn’t get this far to keep jumping through other people’s hoops. Don’t forget the importance of yourself.
13. You are responsible. You may not be at fault for what happens, but you get to choose how you respond to everything. Yes, everything. Your response to anything is a choice. You are response-able.
14. Go with your feelings. You don’t have to intellectualize or justify everything you want to do. It is okay to do things solely because you want to. Take dance lessons. Learn to play the zither. Who cares about the critics? You have earned it.
15. Comfort is overrated. The magic in life takes place at the edges of our comfort zones. Memories are made by pushing yourself and trying new things. Challenging yourself and growing your boundaries is more rewarding than security and comfort.
16. Your bucket list is crap. Putting things on a bucket list can be just another way of deferring your aspirations. Sure, go ahead and make a list but remember: life goes on while you are making plans. Lists are useless unless we utilize them.
17. Stop searching for happiness. The only place you can be happy is in the present. Stop chasing tomorrow and fully experience happiness today.
18. Time is your most valuable asset. You only get so much, and that is it. You can’t horde it. You can’t get it back. You can’t turn back the clock. The best you can do is to start investing your time wisely.
19. Money is overrated. Money is a tool. To see it as anything else is folly. Yes, we all need some, but money is a means to an end, not an end in itself. Spend wisely and remember; superfluous wealth only buys superfluities.
20. In the end, we are all dead. Make that phone call or send an email to let someone know you are thinking of him or her. Better yet, go visit. Mend fences, hug, show appreciation, be kind to people. Don’t be complacent; you never know when the people you thought would be there forever will be gone.
21. We ain’t gettin’ out of this alive. With retirement, you have more time to do things you love, but the extra time is wasted unless you are using it productively and actually living your dreams. The road doesn’t go on forever.