Did the Great Resignation class of 21-22 just pick the worst time to retire?

[2sk22]

Since you said you track carefully, what is the inflation-related increase you are seeing?

I don't understand the logic that because someone doesn't spend a lot, they aren't as affected by inflation.  Whether you spent $10/mo on gas last year or $500/mo, if gas goes up 15%, you see a 15 % increase in that line item.  If your grocery items are up $10%, that's a 10% increase, whether it's on $250/mo or $1500/mo. 

If your costs are up 8% and inflation is 8%, you aren't on the lower end of the inflation scale.  Maybe you are on the lower end of the spending scale, but that's true regardless of inflation.  And I'd argue that someone with a lower spend is potentially more prone to being harmed by inflation, because they have less fat to trim.  If you are already eating meatless, you can't bring down your grocery budget to counteract some of the inflation in meat by eating meatless 3x/week.  If you already drive very little, you can't react to increasing gas prices by carpooling or cutting out longer trips.

My first approach was to look through Quicken to get some aggregate numbers but then I quickly realized that it was very difficult to compare last years expenses against this year since we had family members come for extended stays at various times.

Since I have not thrown away receipts, I was able to compare unit costs for grocery items in Trader Joes and Whole Foods which is where we do the bulk of our food shopping. It helps that we tend to buy pretty much the same things every week :-)

One thing to keep in mind is that I don't buy everything every week - a bag of quinoa lasts for a month and and half a gallon of milk easily lasts for three weeks.

Our electricity bill is zero during the summer months as we feed much more into the grid than we consume - so no cost per kW. However, I am including the cost of natural gas. Note that our electricity feed-in credits typically last us until the end of December so we can avoid using the gas-fired furnace until then by using electric heaters.

Finally, I have to say that these price increases have had a minimal impact so far. Even with these price increases and market decline, our savings currently represent about 55x our expenses. I will admit that I stopped buying my favorite organic eggs after the price went up to $7.99 a dozen. The Whole Foods house brand eggs are good enough for us :-)

[Cranky]

I am noticing price jumps in big, infrequently purchased items - new windows, new tires. But while I'm seeing overall price increases in groceries, I'm not actually seeing my own grocery spending go up on a per person basis, because I've got the time and motivation to shop more aggressively.

I dunno. It's annoying but it is what it is, I guess. I remind myself that we had incredibly and unusually low inflation for a decade, so we just kind of catching up.

[nereo]

I dunno. It's annoying but it is what it is, I guess. I remind myself that we had incredibly and unusually low inflation for a decade, so we just kind of catching up.

I'm really curious to see where we land on an annualized inflate rate for the decade. Of course that will depend immensely on how persistent our current high inflation is. Guess we can check back in about eight years.

[AlanStache]

...
My first approach was to look through Quicken to get some aggregate numbers but then I quickly realized that it was very difficult to compare last years expenses against this year since we had family members come for extended stays at various times.

Since I have not thrown away receipts, I was able to compare unit costs for grocery items in Trader Joes and Whole Foods which is where we do the bulk of our food shopping. It helps that we tend to buy pretty much the same things every week :-)

One thing to keep in mind is that I don't buy everything every week - a bag of quinoa lasts for a month and and half a gallon of milk easily lasts for three weeks.

Our electricity bill is zero during the summer months as we feed much more into the grid than we consume - so no cost per kW. However, I am including the cost of natural gas. Note that our electricity feed-in credits typically last us until the end of December so we can avoid using the gas-fired furnace until then by using electric heaters.

Finally, I have to say that these price increases have had a minimal impact so far. Even with these price increases and market decline, our savings currently represent about 55x our expenses. I will admit that I stopped buying my favorite organic eggs after the price went up to $7.99 a dozen. The Whole Foods house brand eggs are good enough for us :-)

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

[EscapeVelocity2020]

...
My first approach was to look through Quicken to get some aggregate numbers but then I quickly realized that it was very difficult to compare last years expenses against this year since we had family members come for extended stays at various times.

Since I have not thrown away receipts, I was able to compare unit costs for grocery items in Trader Joes and Whole Foods which is where we do the bulk of our food shopping. It helps that we tend to buy pretty much the same things every week :-)

One thing to keep in mind is that I don't buy everything every week - a bag of quinoa lasts for a month and and half a gallon of milk easily lasts for three weeks.

Our electricity bill is zero during the summer months as we feed much more into the grid than we consume - so no cost per kW. However, I am including the cost of natural gas. Note that our electricity feed-in credits typically last us until the end of December so we can avoid using the gas-fired furnace until then by using electric heaters.

Finally, I have to say that these price increases have had a minimal impact so far. Even with these price increases and market decline, our savings currently represent about 55x our expenses. I will admit that I stopped buying my favorite organic eggs after the price went up to $7.99 a dozen. The Whole Foods house brand eggs are good enough for us :-)

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

Also, the clip you posted clearly shows inflation in everything you buy except bananas, down from $2 to $1.50.  Food inflation (especially with 2 teenagers) has been brutal, even with our family trying to substitute, optimize by cost per unit, etc.

[wageslave23]

...
My first approach was to look through Quicken to get some aggregate numbers but then I quickly realized that it was very difficult to compare last years expenses against this year since we had family members come for extended stays at various times.

Since I have not thrown away receipts, I was able to compare unit costs for grocery items in Trader Joes and Whole Foods which is where we do the bulk of our food shopping. It helps that we tend to buy pretty much the same things every week :-)

One thing to keep in mind is that I don't buy everything every week - a bag of quinoa lasts for a month and and half a gallon of milk easily lasts for three weeks.

Our electricity bill is zero during the summer months as we feed much more into the grid than we consume - so no cost per kW. However, I am including the cost of natural gas. Note that our electricity feed-in credits typically last us until the end of December so we can avoid using the gas-fired furnace until then by using electric heaters.

Finally, I have to say that these price increases have had a minimal impact so far. Even with these price increases and market decline, our savings currently represent about 55x our expenses. I will admit that I stopped buying my favorite organic eggs after the price went up to $7.99 a dozen. The Whole Foods house brand eggs are good enough for us :-)

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

Also, the clip you posted clearly shows inflation in everything you buy except bananas, down from $2 to $1.50.  Food inflation (especially with 2 teenagers) has been brutal, even with our family trying to substitute, optimize by cost per unit, etc.

Yeah we were already pretty frugal, buying mostly chicken because it's the cheapest meat. But that is up 50% from a year ago. We also eat 6 eggs everyday but those are up.  I guess if you had a lot of expensive items in your grocery list you could trade down, but that is losing something you used to find valuable.  Either way you can't escape inflation when it's comes to groceries.  In might not matter because your nest egg is so high, but that's a different topic.

[bryan995]

Exactly.  Also seems strange that many here are celebrating their victory over inflation by consuming less or cutting quality of items or frequency of 'entertainment/etc'.  That's not beating inflation ... Inflation is beating you. 

The only way to win here is to either get a >10% income increase (without adding 10% more productivity), or via having fixed costs, like a fixed cost mortgage, or a fixed cost solar loan (to combat rising utility costs).
But if you are now FIRE as of 21/22, the income increase piece is doing to be quite difficult....

I couldn't disagree with that more.  First, the 4% rule accounts for inflation.  One year of bad returns and inflation is very weakly correlated with SWR.  3-5 years, sure, but not one.  Second, in the vast majority of cases the 4% rule and the other approaches people here use (like real estate) to FIRE are pessimistic by nature.  It's still much more likely that someone who FIREd in 21-22 will in the long run have way more money than they need than too little.  Third, everyone planning to FIRE should be well aware of the risks.  Blindly following the 4% rule results in failure some small percentage of times in about 25+ years.  So essentially nobody here blindly follows the 4% rule.  I read all of the cohort threads, and you can count on one hand the people who take an aggressive approach to FIRE withdrawals.  Almost everyone says something like, "I'm planning a 3.5% withdrawal rate and ignoring the $2k / month in Social Security I'll get in 20 years.  I also have fat to trim in the budget, and if it really gets bad I could increase my etsy business from $2k / year to $8k / year".  For those typical FIREes this inflation bump is just nothing at all to worry about. 

But if spending an hour doing weatherstripping and an afternoon planting low-water plants is being beaten by inflation, then ok.

I did not mention anything about 4% SWR ;)  And even if it does have some buffer built in for normal-inflation, still, the ability to absorb inflation is limited.  You can only cut a budget so much before things start looking quite different, and or you run out things to optimize.  At that point, a person would be in a tough spot.

I think we simply need to wait longer to see how this plays out ... but I'd wager that is far more likely that the class of 21-22 picked quite poorly compared to picking one of the better times to exit the workforce.

The point above was that if you normally do NOT spend an hour doing weather-stripping and an afternoon planting low-water plants, and now you do due to inflation....
That is not beating inflation.  Inflation is beat you.  You've had to adjust your habits, you are now NET negative on whatever you did with your time before (leisure?), even though your example is a toy one.

As I said the only way to win - is to either still be working and get a raise > inflation.  And or have so much fixed-rate leverage (mortgage, solar, rentals, etc) that continued inflation eats away at your NET costs, increasing your yields.

Personally I am now in a OMY loop - until thing become more clear with the broader macro-economic environment.  No need to quit now and take on added risk, when I am at my highest earning years and still enjoy work.

[2sk22]

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

It's still the same 1 pound as far as I can tell - TJ's seems to be pretty good about not short-weighting. I am fairly well organized when it comes to data collection but even I don't have the time to actually weight packaged goods :-)

It occurred to me - perhaps everyone should put together a table like this to compute their own personal inflation rate. Just like you should compute your net worth periodically, everyone should also do this inflation computation exercise at least once a year too.

[vand]

Exactly.  Also seems strange that many here are celebrating their victory over inflation by consuming less or cutting quality of items or frequency of 'entertainment/etc'.  That's not beating inflation ... Inflation is beating you. 

The only way to win here is to either get a >10% income increase (without adding 10% more productivity), or via having fixed costs, like a fixed cost mortgage, or a fixed cost solar loan (to combat rising utility costs).
But if you are now FIRE as of 21/22, the income increase piece is doing to be quite difficult....

I couldn't disagree with that more.  First, the 4% rule accounts for inflation.  One year of bad returns and inflation is very weakly correlated with SWR.  3-5 years, sure, but not one.  Second, in the vast majority of cases the 4% rule and the other approaches people here use (like real estate) to FIRE are pessimistic by nature.  It's still much more likely that someone who FIREd in 21-22 will in the long run have way more money than they need than too little.  Third, everyone planning to FIRE should be well aware of the risks.  Blindly following the 4% rule results in failure some small percentage of times in about 25+ years.  So essentially nobody here blindly follows the 4% rule.  I read all of the cohort threads, and you can count on one hand the people who take an aggressive approach to FIRE withdrawals.  Almost everyone says something like, "I'm planning a 3.5% withdrawal rate and ignoring the $2k / month in Social Security I'll get in 20 years.  I also have fat to trim in the budget, and if it really gets bad I could increase my etsy business from $2k / year to $8k / year".  For those typical FIREes this inflation bump is just nothing at all to worry about. 

But if spending an hour doing weatherstripping and an afternoon planting low-water plants is being beaten by inflation, then ok.

I did not mention anything about 4% SWR ;)  And even if it does have some buffer built in for normal-inflation, still, the ability to absorb inflation is limited.  You can only cut a budget so much before things start looking quite different, and or you run out things to optimize.  At that point, a person would be in a tough spot.

I think we simply need to wait longer to see how this plays out ... but I'd wager that is far more likely that the class of 21-22 picked quite poorly compared to picking one of the better times to exit the workforce.

The point above was that if you normally do NOT spend an hour doing weather-stripping and an afternoon planting low-water plants, and now you do due to inflation....
That is not beating inflation.  Inflation is beat you.  You've had to adjust your habits, you are now NET negative on whatever you did with your time before (leisure?), even though your example is a toy one.

As I said the only way to win - is to either still be working and get a raise > inflation.  And or have so much fixed-rate leverage (mortgage, solar, rentals, etc) that continued inflation eats away at your NET costs, increasing your yields.

Personally I am now in a OMY loop - until thing become more clear with the broader macro-economic environment.  No need to quit now and take on added risk, when I am at my highest earning years and still enjoy work.

Agree. I have no doubt everyone here can and will further optimise around inflation and make more cuts, be more picky with their spending etc, but if these didn’t impact your lifestyle then why weren’t you already doing them?

Inflation doesn’t just show up in food bills, it shows up in the extra time we spend and the choices we make trying to combat it.

[By the River]

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

It's still the same 1 pound as far as I can tell - TJ's seems to be pretty good about not short-weighting. I am fairly well organized when it comes to data collection but even I don't have the time to actually weight packaged goods :-)

It occurred to me - perhaps everyone should put together a table like this to compute their own personal inflation rate. Just like you should compute your net worth periodically, everyone should also do this inflation computation exercise at least once a year too.

I think the comment was for other items not the ones sold by weight (i.e. the pretzel).   I went shopping last weekend and picked up a normal item (for us) and the box felt thin.  Compared it to the half-used box remaining in my pantry and the size had gone from 12 servings to 10.  I don't have a comparison price list to tell how the price changed but it probably didn't decrease.  (Shrinkflation)

[EscapeVelocity2020]

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

It's still the same 1 pound as far as I can tell - TJ's seems to be pretty good about not short-weighting. I am fairly well organized when it comes to data collection but even I don't have the time to actually weight packaged goods :-)

It occurred to me - perhaps everyone should put together a table like this to compute their own personal inflation rate. Just like you should compute your net worth periodically, everyone should also do this inflation computation exercise at least once a year too.

I second this idea.  Consumers have to be smarter and more aware than ever!  I see it as a challenge, but heaven help the overworked and overwhelmed parents out there...  I was at the grocery refrigerator and two cartons of soy milk, side by side, had different liquid volume!  The generic was 1.89L and the brand name was 1.75L (almost 10% less)!  I should've taken a picture, but there are plenty of examples of shrinkflation on the internet.

[2Birds1Stone]

But the brand name one is twice and good ;) so you are going to be a good mustachian and use half of the amount of the generic.

[Villanelle]

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

It's still the same 1 pound as far as I can tell - TJ's seems to be pretty good about not short-weighting. I am fairly well organized when it comes to data collection but even I don't have the time to actually weight packaged goods :-)

It occurred to me - perhaps everyone should put together a table like this to compute their own personal inflation rate. Just like you should compute your net worth periodically, everyone should also do this inflation computation exercise at least once a year too.

I think the comment was for other items not the ones sold by weight (i.e. the pretzel).   I went shopping last weekend and picked up a normal item (for us) and the box felt thin.  Compared it to the half-used box remaining in my pantry and the size had gone from 12 servings to 10.  I don't have a comparison price list to tell how the price changed but it probably didn't decrease.  (Shrinkflation)

Right.  We aren't talking about cheating by giving .95 lbs and calling it a pound.  We are talking about the packaging changing so before when you got a 500g box of cereal, that same product is sold in a 475g box.  It looks they same.  They aren't cheating because the label accurately reflects the correct weight, but people don't notice they are getting less cereal. 

~~One thing I've done is buy smaller packages of meat.  I generally buy a package of meat per dish, or if its cheaper to buy a larger pack, I'd aim for about 1lb. per item dish, so if I was batch cooking 6 dishes, I'd buy about 6 pounds.  If I was just grabbing 1 package of meat for 1 dish, I'd find one at about a pound.  Now, I typically look for the smallest packages they sell.  Everything is close to a pound, but if there's a .92 pound package, that's the one I grab.  If I'm batch cooking, I might buy 5.5 pounds for those 6 dishes.  We don't notice that we are getting ~5-8% less meat in our dish.  Since neither my spouse nor myself are underweight, it's also probably better for us as it's a few fewer calories as well.  No noticeable difference, but a small savings.  Clearly, I could have been doing this all along, and the change requires no additional effort.  This is something I'll continue when inflation has settled down.   

[Villanelle]

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

It's still the same 1 pound as far as I can tell - TJ's seems to be pretty good about not short-weighting. I am fairly well organized when it comes to data collection but even I don't have the time to actually weight packaged goods :-)

It occurred to me - perhaps everyone should put together a table like this to compute their own personal inflation rate. Just like you should compute your net worth periodically, everyone should also do this inflation computation exercise at least once a year too.

I second this idea.  Consumers have to be smarter and more aware than ever!  I see it as a challenge, but heaven help the overworked and overwhelmed parents out there...  I was at the grocery refrigerator and two cartons of soy milk, side by side, had different liquid volume!  The generic was 1.89L and the brand name was 1.75L (almost 10% less)!  I should've taken a picture, but there are plenty of examples of shrinkflation on the internet.

In small print, my store has the price per unit if measurement on the labels.  I find this quite helpful, although on occasion I've noticed the math is off so I still have to give it a quick sanity check. 

[2Birds1Stone]

yes but... :-)  How do you know the sizes of the products you have bought has not decreased?  3 years ago maybe a bag of quinoa was 1lb, today maybe its is 0.95lb.  Unless you tracked your buying frequency too?

It's still the same 1 pound as far as I can tell - TJ's seems to be pretty good about not short-weighting. I am fairly well organized when it comes to data collection but even I don't have the time to actually weight packaged goods :-)

It occurred to me - perhaps everyone should put together a table like this to compute their own personal inflation rate. Just like you should compute your net worth periodically, everyone should also do this inflation computation exercise at least once a year too.

I second this idea.  Consumers have to be smarter and more aware than ever!  I see it as a challenge, but heaven help the overworked and overwhelmed parents out there...  I was at the grocery refrigerator and two cartons of soy milk, side by side, had different liquid volume!  The generic was 1.89L and the brand name was 1.75L (almost 10% less)!  I should've taken a picture, but there are plenty of examples of shrinkflation on the internet.

In small print, my store has the price per unit if measurement on the labels.  I find this quite helpful, although on occasion I've noticed the math is off so I still have to give it a quick sanity check.

Not only is the math off sometimes, they have gotten really cheeky.....here's a great example you may notice in your neck of the woods......in many instances at Aldi, when they have two different sizes of something, they will list one by Price per Oz, and the other Price per LB, which prevent much of genpop from being able to comparison shop without a calculator. I notice it on their cold cuts, hummus (individual vs. quartet) many of the dairy products, etc etc.

[nereo]

Agree. I have no doubt everyone here can and will further optimise around inflation and make more cuts, be more picky with their spending etc, but if these didn’t impact your lifestyle then why weren’t you already doing them?

Inflation doesn’t just show up in food bills, it shows up in the extra time we spend and the choices we make trying to combat it.

Have you read any of MMM’s blog posts from the first few years?  Because a core pillar of ‘mustachianism’ is that the vast majority of us are spending lots of money on things which either don’t substantially improve our lifestyle or that have far cheaper options which will yield an equal or better impact on QOL. This is true even among many “advanced mustachians’. As a lot, us middle-class denizens of developed countries waste a ton of money on mindless consumerism.

Continuous optimization is literally the point.

[bryan995]

Agree. I have no doubt everyone here can and will further optimise around inflation and make more cuts, be more picky with their spending etc, but if these didn’t impact your lifestyle then why weren’t you already doing them?

Inflation doesn’t just show up in food bills, it shows up in the extra time we spend and the choices we make trying to combat it.

Have you read any of MMM’s blog posts from the first few years?  Because a core pillar of ‘mustachianism’ is that the vast majority of us are spending lots of money on things which either don’t substantially improve our lifestyle or that have far cheaper options which will yield an equal or better impact on QOL. This is true even among many “advanced mustachians’. As a lot, us middle-class denizens of developed countries waste a ton of money on mindless consumerism.

Continuous optimization is literally the point.

Sure - but there is a limit to the expense optimization side of the equation. Multiple years of >7% inflation and no matter how efficient you are … if your income is fixed … then you are going to be in a very difficult spot. Can only move to LCOL so many times. Can only down size so many times. There is a floor.

The other point still stands. If there were obvious things to trim that leave you Neutral on your quality of life, then they should have already been done. Allowing inflation to force the issue suggests it’s not truly a neutral change, but instead one being done out of necessity.

[Wolfpack Mustachian]

Agree. I have no doubt everyone here can and will further optimise around inflation and make more cuts, be more picky with their spending etc, but if these didn’t impact your lifestyle then why weren’t you already doing them?

Inflation doesn’t just show up in food bills, it shows up in the extra time we spend and the choices we make trying to combat it.

Have you read any of MMM’s blog posts from the first few years?  Because a core pillar of ‘mustachianism’ is that the vast majority of us are spending lots of money on things which either don’t substantially improve our lifestyle or that have far cheaper options which will yield an equal or better impact on QOL. This is true even among many “advanced mustachians’. As a lot, us middle-class denizens of developed countries waste a ton of money on mindless consumerism.

Continuous optimization is literally the point.

Sure - but there is a limit to the expense optimization side of the equation. Multiple years of >7% inflation and no matter how efficient you are … if your income is fixed … then you are going to be in a very difficult spot. Can only move to LCOL so many times. Can only down size so many times. There is a floor.

The other point still stands. If there were obvious things to trim that leave you Neutral on your quality of life, then they should have already been done. Allowing inflation to force the issue suggests it’s not truly a neutral change, but instead one being done out of necessity.

Sure, in a world where we are theoretically perfectly rational beings, but that's not our world. I have been spurred into changes of optimization when I did not realize that it would improve my quality of life and yet it did. Grocery price increases are spurring me on to reduce my meat consumption. That is an improvement to my diet and to the environment as a whole. Necessity can spur optimization you were not aware of before that can actually improve your life.

[bryan995]

Sure, in a world where we are theoretically perfectly rational beings, but that's not our world. I have been spurred into changes of optimization when I did not realize that it would improve my quality of life and yet it did. Grocery price increases are spurring me on to reduce my meat consumption. That is an improvement to my diet and to the environment as a whole. Necessity can spur optimization you were not aware of before that can actually improve your life.

Reading the comments here I’d expect that most are exactly like that ! Ha.

I agree. But you can only do that so many times before you are optimally optimized :). Then you have nothing further that can be cut or “modified” that could result in a expense reduction.

[vand]

A recent survey of UK students shows the true inflation for this group running at 14%(vs 9.9% cpi) which I think is probably a far more representative number for those who live on low income and where the everyday basics take up most of your budget.

https://www.bbc.co.uk/news/business-62972580

[wageslave23]

Agree. I have no doubt everyone here can and will further optimise around inflation and make more cuts, be more picky with their spending etc, but if these didn’t impact your lifestyle then why weren’t you already doing them?

Inflation doesn’t just show up in food bills, it shows up in the extra time we spend and the choices we make trying to combat it.

Have you read any of MMM’s blog posts from the first few years?  Because a core pillar of ‘mustachianism’ is that the vast majority of us are spending lots of money on things which either don’t substantially improve our lifestyle or that have far cheaper options which will yield an equal or better impact on QOL. This is true even among many “advanced mustachians’. As a lot, us middle-class denizens of developed countries waste a ton of money on mindless consumerism.

Continuous optimization is literally the point.

Sure - but there is a limit to the expense optimization side of the equation. Multiple years of >7% inflation and no matter how efficient you are … if your income is fixed … then you are going to be in a very difficult spot. Can only move to LCOL so many times. Can only down size so many times. There is a floor.

The other point still stands. If there were obvious things to trim that leave you Neutral on your quality of life, then they should have already been done. Allowing inflation to force the issue suggests it’s not truly a neutral change, but instead one being done out of necessity.

Bingo!

[mistymoney]

Have we answered the question of the OP yet? ;P

what are thoughts/predictions for/about class of 23?

[FIRE 20/20]

I did not mention anything about 4% SWR ;)  And even if it does have some buffer built in for normal-inflation, still, the ability to absorb inflation is limited.  You can only cut a budget so much before things start looking quite different, and or you run out things to optimize.  At that point, a person would be in a tough spot.

I think we simply need to wait longer to see how this plays out ... but I'd wager that is far more likely that the class of 21-22 picked quite poorly compared to picking one of the better times to exit the workforce.

The point above was that if you normally do NOT spend an hour doing weather-stripping and an afternoon planting low-water plants, and now you do due to inflation....
That is not beating inflation.  Inflation is beat you.  You've had to adjust your habits, you are now NET negative on whatever you did with your time before (leisure?), even though your example is a toy one.

As I said the only way to win - is to either still be working and get a raise > inflation.  And or have so much fixed-rate leverage (mortgage, solar, rentals, etc) that continued inflation eats away at your NET costs, increasing your yields.

Personally I am now in a OMY loop - until thing become more clear with the broader macro-economic environment.  No need to quit now and take on added risk, when I am at my highest earning years and still enjoy work.

I didn't mean to suggest you said anything about 4%, but I can definitely see how you interpreted it that I did.  That's my bad for not being clear.  The reason I mentioned it is that this entire topic is discussing people who already FIREd in 21-22.  For those people, they DO NOT NEED TO CUT SPENDING OR CHANGE ANYTHING if they're following the 4% rule, and most people here who FIREd during those years are typically following something related to the 4% rule.  For someone who FIREd in 21-22, if they are following anything remotely close to the 4% rule can simply increase their spending by 9% (or whatever it ends up being) to account for inflation.  Simple.  It's already baked in to the plan.  Inflation is not beating those people because the plan all along is to increase spending along with inflation.  However, for people who are willing to address the areas where inflation is a factor in their lives, I would rather be in my position - happily FIREd and not working 2,000 hours in a year and doing 5-10 hours of work to cut costs than the other way around.  Trust me - one day of "work" beats 200 days of work a year.  :)  If that's being beaten by inflation I will happily take the loss. 

Either way, I'm still totally confident that the 21-22 cohort will be *just fine*.  Remember, the 4% rule has years of high inflation already baked in - you just increase your spending by the inflation rate.  Following the cohort threads for roughly the past 10 years I'm confident saying almost everyone here is way more conservative than following the 4% rule of thumb blindly, so they'll be even more safe than the already safe 4% rule says.  And that allows for increases in spending in accordance with inflation.

[vand]

What we know so far is:

- The performance in the first 10yrs of a 30yr drawdown period is most highly correlated with the SWR a portfolio is able to sustain by the end of those 30yrs, although we don't necessarily have to wait that long and should have a pretty good idea of the path we are on after about 5yrs

- At the last market peak, stocks were priced to return well below their long term average. While price and future return don't correlate that well for stocks, they are still the single best guide we have

- Bonds were also priced to deliver abysmal returns for the foreseeable future given where yields were sat at

- Most investors worst short term fears have been realised, and retirement portfolios are tanking. Yes, we may only be 10-15% of the way towards knowing for sure if this turns into one of the worst performing 5yr or 10yr periods which would historically have tested the limits of what we think retirement portfolios are able to deliver, but that is a fair start.

- Short term market prognosis is still not good. You should not expect a new bull market to start whilst we are in a well established downtrend now and the path of least resistance is  down.  That might change, but it will only be evidenced by the market walking the walk instead of talking the talk, and actually managing to break itself out of the long term downtrend


Time is not on the side of the 2021 retiree's portfolio whilst the above the above factors hold true. While there is no immediate need to panic, the further more we inch towards a "terrible outcome" scenario.

[mistymoney]

I did not mention anything about 4% SWR ;)  And even if it does have some buffer built in for normal-inflation, still, the ability to absorb inflation is limited.  You can only cut a budget so much before things start looking quite different, and or you run out things to optimize.  At that point, a person would be in a tough spot.

I think we simply need to wait longer to see how this plays out ... but I'd wager that is far more likely that the class of 21-22 picked quite poorly compared to picking one of the better times to exit the workforce.

The point above was that if you normally do NOT spend an hour doing weather-stripping and an afternoon planting low-water plants, and now you do due to inflation....
That is not beating inflation.  Inflation is beat you.  You've had to adjust your habits, you are now NET negative on whatever you did with your time before (leisure?), even though your example is a toy one.

As I said the only way to win - is to either still be working and get a raise > inflation.  And or have so much fixed-rate leverage (mortgage, solar, rentals, etc) that continued inflation eats away at your NET costs, increasing your yields.

Personally I am now in a OMY loop - until thing become more clear with the broader macro-economic environment.  No need to quit now and take on added risk, when I am at my highest earning years and still enjoy work.

I didn't mean to suggest you said anything about 4%, but I can definitely see how you interpreted it that I did.  That's my bad for not being clear.  The reason I mentioned it is that this entire topic is discussing people who already FIREd in 21-22.  For those people, they DO NOT NEED TO CUT SPENDING OR CHANGE ANYTHING if they're following the 4% rule, and most people here who FIREd during those years are typically following something related to the 4% rule.  For someone who FIREd in 21-22, if they are following anything remotely close to the 4% rule can simply increase their spending by 9% (or whatever it ends up being) to account for inflation.  Simple.  It's already baked in to the plan.  Inflation is not beating those people because the plan all along is to increase spending along with inflation.  However, for people who are willing to address the areas where inflation is a factor in their lives, I would rather be in my position - happily FIREd and not working 2,000 hours in a year and doing 5-10 hours of work to cut costs than the other way around.  Trust me - one day of "work" beats 200 days of work a year.  :)  If that's being beaten by inflation I will happily take the loss. 

Either way, I'm still totally confident that the 21-22 cohort will be *just fine*.  Remember, the 4% rule has years of high inflation already baked in - you just increase your spending by the inflation rate.  Following the cohort threads for roughly the past 10 years I'm confident saying almost everyone here is way more conservative than following the 4% rule of thumb blindly, so they'll be even more safe than the already safe 4% rule says.  And that allows for increases in spending in accordance with inflation.

I'm not sure how "baked in" it is. When I did a lot of simulations against historical data sets last year, the only fails were starting retirement in the stagflation years.

So if you are looking at using 4% with a 98% success rate on simulations, it is likely high inflation in the early years that are in the 2% of fails.

[Wolfpack Mustachian]

Sure, in a world where we are theoretically perfectly rational beings, but that's not our world. I have been spurred into changes of optimization when I did not realize that it would improve my quality of life and yet it did. Grocery price increases are spurring me on to reduce my meat consumption. That is an improvement to my diet and to the environment as a whole. Necessity can spur optimization you were not aware of before that can actually improve your life.

Reading the comments here I’d expect that most are exactly like that ! Ha.

I agree. But you can only do that so many times before you are optimally optimized :). Then you have nothing further that can be cut or “modified” that could result in a expense reduction.

That is certainly true - eventually I would run out of optimization. I definitely haven't yet, though...I just spend way too much :-).

[EscapeVelocity2020]

..., I would rather be in my position - happily FIREd and not working 2,000 hours in a year and doing 5-10 hours of work to cut costs than the other way around.  Trust me - one day of "work" beats 200 days of work a year.  :)  If that's being beaten by inflation I will happily take the loss. 

I get all the concerns expressed in this whole thread...I really do. But in the end @FIRE 20/20 expresses my truth which is that money is not what's important to me. Controlling my time, setting my own priorities, and doing what makes me happy everyday is what I want. And if I have to cut spending or implement more optimization or whatever, I can do that. What I couldn't do is get those days back if I had chosen to work one more year (or two or ten). I'm not criticizing anyone who did/is doing that, but that's not the choice for me. The last 15 FIRED months have been glorious, and I wouldn't trade them for any amount of money!

All this feel-good stuff about being currently ER is well understood, that is why we are on a FIRE forum pursing FI and ER, and we all ultimately have to determine our preference for OMY of work vs. ER.  I'm here to get exposed to new ideas.  I'd love it if, somewhere in all these 'reassurances that 4% SWR baked in inflation', that folks would actually discuss where they are seeing unexpected benefits of ER to offset inflation that they would otherwise have missed had they been working.

It's pretty obvious to me that getting COLA income during times of high inflation and continuing to DCA and not spend the retirement 'stache during a market swoon are going to make my FI stronger (e.g. my 4% SWR will start when CAPE is lower, I'll have more fat in that 4%SWR budget and/or I'll get to a bulletproof 3.5% SWR, etc).  But I'm here for the ER folks to drop some inflation beating benefits specific to being early-retired.

I guess the point is, getting a couple years of ER in my 40's at the expense of worrying about FI in my 70's isn't a good trade-off.  We won't know that outcome until it's too late, but there is good evidence that the kind of conditions we are currently experiencing would lend itself to FIRE troubles.  Compounding on this, I'm pretty sure Social Security will be a shadow of what it was for current beneficiaries.  So I'd love to get some new information to add to the reassurances that, say, inflation in ER isn't a problem.  I'm pretty sure none of the FIRE blogs or fora talked about being prepared for high inflation, but that would've been pretty awesome to see a blogger 'inflation prepping' in 2020 - buying their forever house in cash with solar panels, 10 years of food, a new EV and a set of spare tires... 

Just hoping to move this conversation forward again, the 'being-ER euphoria' from the last decade has been done to death.  Inflation was low, market returns were great, and worrying about the 4% rule was a waste of time.  FIRE was the way to go.  We got that message.  Times are different now.

[Villanelle]

..., I would rather be in my position - happily FIREd and not working 2,000 hours in a year and doing 5-10 hours of work to cut costs than the other way around.  Trust me - one day of "work" beats 200 days of work a year.  :)  If that's being beaten by inflation I will happily take the loss. 

I get all the concerns expressed in this whole thread...I really do. But in the end @FIRE 20/20 expresses my truth which is that money is not what's important to me. Controlling my time, setting my own priorities, and doing what makes me happy everyday is what I want. And if I have to cut spending or implement more optimization or whatever, I can do that. What I couldn't do is get those days back if I had chosen to work one more year (or two or ten). I'm not criticizing anyone who did/is doing that, but that's not the choice for me. The last 15 FIRED months have been glorious, and I wouldn't trade them for any amount of money!

All this feel-good stuff about being currently ER is well understood, that is why we are on a FIRE forum pursing FI and ER, and we all ultimately have to determine our preference for OMY of work vs. ER.  I'm here to get exposed to new ideas.  I'd love it if, somewhere in all these 'reassurances that 4% SWR baked in inflation', that folks would actually discuss where they are seeing unexpected benefits of ER to offset inflation that they would otherwise have missed had they been working.

It's pretty obvious to me that getting COLA income during times of high inflation and continuing to DCA and not spend the retirement 'stache during a market swoon are going to make my FI stronger (e.g. my 4% SWR will start when CAPE is lower, I'll have more fat in that 4%SWR budget and/or I'll get to a bulletproof 3.5% SWR, etc).  But I'm here for the ER folks to drop some inflation beating benefits specific to being early-retired.

I guess the point is, getting a couple years of ER in my 40's at the expense of worrying about FI in my 70's isn't a good trade-off.  We won't know that outcome until it's too late, but there is good evidence that the kind of conditions we are currently experiencing would lend itself to FIRE troubles.  Compounding on this, I'm pretty sure Social Security will be a shadow of what it was for current beneficiaries.  So I'd love to get some new information to add to the reassurances that, say, inflation in ER isn't a problem.  I'm pretty sure none of the FIRE blogs or fora talked about being prepared for high inflation, but that would've been pretty awesome to see a blogger 'inflation prepping' in 2020 - buying their forever house in cash with solar panels, 10 years of food, a new EV and a set of spare tires... 

Just hoping to move this conversation forward again, the 'being-ER euphoria' from the last decade has been done to death.  Inflation was low, market returns were great, and worrying about the 4% rule was a waste of time.  FIRE was the way to go.  We got that message.  Times are different now.

I think so much of this depends on the kind of FIRE you plan for.  While I'm reconsidering now based on outside factors, my FIRE plans currently include a fair amount of travel.  If high inflation or a recession/depression kick in, travel will be one of the first things to go, or be scaled down.  Will that be a cut that actually affects my happiness or QOL?  Yes.  (If not, then it shouldn't be in the budget or plans at all.)  But it will subtract less happiness from my life than working another year, or having my spouse work another year would have.  So it still makes sense to plan for it in the budget, but also to quit slightly earlier, knowing its fat we can trim if things are looking good. 

Similarly, I'm intentionally cultivating a side hustle that doesn't bring in much, but is something, and yet it's not unpleasant and entirely flexible.  So I won't mind keeping in FIRE.  It's also something I could pretty easily do when I'm 75, if necessary.  (Meaning, it isn't physically taxing.)   It's also somewhat scalable, and while i know that in down markets, everyone will be looking for work so it's a bad time to be doing that, it seems realistic that I could hold on to it and perhaps even expand slightly.  But it's ~10-15 hours a *month*, so it certainly doesn't feel like I'm back to having a job.  Would my life be infinitesimally better without it?  I suppose, since if I had a $100m, I wouldn't do it any longer.  But it that difference is so tiny that it is well worth doing this, compared to another year (or even a few months) of FTE. 

These are the kinds of things I consider to be inflation (and down market) hedges.  Sure they are sacrifices in that in a perfect world, they wouldn't happen.  But when I compare them to working FTE longer?  Giving up some travel for a few years and doing a pleasant side hustle for a few hours a week?  Easy.  I think these are the kinds of things people should be looking for. 

You say that a couple FIRE years in your 40s isn't worth worrying about money in your 70s.  For me, a couple FIRE years is worth having to make some cuts to the luxury items we hope to have, or putting in a few ours of WFH every week or two.  That's not a good trade-off; it's a fantastic trade-off. 

Also, while FIRE blogs don't talk much about inflation, they do talk about bear markets and recessions.  And it seems most of the answers are the same.  When markets are down or costs are up, you flex the things that are flexible.

[maizefolk]

I guess the point is, getting a couple years of ER in my 40's at the expense of worrying about FI in my 70's isn't a good trade-off. We won't know that outcome until it's too late, but there is good evidence that the kind of conditions we are currently experiencing would lend itself to FIRE troubles.  Compounding on this, I'm pretty sure Social Security will be a shadow of what it was for current beneficiaries.  So I'd love to get some new information to add to the reassurances that, say, inflation in ER isn't a problem.  I'm pretty sure none of the FIRE blogs or fora talked about being prepared for high inflation, but that would've been pretty awesome to see a blogger 'inflation prepping' in 2020 - buying their forever house in cash with solar panels, 10 years of food, a new EV and a set of spare tires... 

If you FIRED in your mid-40s, by your early 50s you'll know if you're in great shape, or potentially in for a nail biter of a retirement on a 4% withdrawal rate. For some careers, going back to work for an extra few years is straightforward. For others, once you are out you are out. But nobody is going to go to sleep 69 feeling like their are in great shape after being FIRE for three decades and way up on their 70th birthday to find out they are barely scraping by and need to go work as a greeter at Walmart.

Sequence of returns risk really has to hit you in the first decade or your stash has already grown so much that you're not only not at risk of running out of money but you're not at risk of having to worry about running out of money.

And people on this forum have been talking about the value of simply owning your own home (with or without a mortgage) as a non-trivial inflation hedge for years. If housing is 1/3 of a typically retiree's spend, locking that much of your spending out of inflation -- probably a bit less since property taxes and maintenance will still go up with inflation -- makes a big difference in high(er) inflation environments.

There is definitely more that could be done. I like the idea of arguing for solar panels + an EV as an inflation hedge. Less thrilled with the idea of living off 10 year shelf stable food indefinitely. Personally I'd find it reasonable to cut back elsewhere to enjoy meals.

[EscapeVelocity2020]

I guess the point is, getting a couple years of ER in my 40's at the expense of worrying about FI in my 70's isn't a good trade-off. We won't know that outcome until it's too late, but there is good evidence that the kind of conditions we are currently experiencing would lend itself to FIRE troubles.  Compounding on this, I'm pretty sure Social Security will be a shadow of what it was for current beneficiaries.  So I'd love to get some new information to add to the reassurances that, say, inflation in ER isn't a problem.  I'm pretty sure none of the FIRE blogs or fora talked about being prepared for high inflation, but that would've been pretty awesome to see a blogger 'inflation prepping' in 2020 - buying their forever house in cash with solar panels, 10 years of food, a new EV and a set of spare tires... 

If you FIRED in your mid-40s, by your early 50s you'll know if you're in great shape, or potentially in for a nail biter of a retirement on a 4% withdrawal rate. For some careers, going back to work for an extra few years is straightforward. For others, once you are out you are out. But nobody is going to go to sleep 69 feeling like their are in great shape after being FIRE for three decades and way up on their 70th birthday to find out they are barely scraping by and need to go work as a greeter at Walmart.

Sequence of returns risk really has to hit you in the first decade or your stash has already grown so much that you're not only not at risk of running out of money but you're not at risk of having to worry about running out of money.

And people on this forum have been talking about the value of simply owning your own home (with or without a mortgage) as a non-trivial inflation hedge for years. If housing is 1/3 of a typically retiree's spend, locking that much of your spending out of inflation -- probably a bit less since property taxes and maintenance will still go up with inflation -- makes a big difference in high(er) inflation environments.

There is definitely more that could be done. I like the idea of arguing for solar panels + an EV as an inflation hedge. Less thrilled with the idea of living off 10 year shelf stable food indefinitely. Personally I'd find it reasonable to cut back elsewhere to enjoy meals.

Yes and no.  People like to bring up the Y2K retiree - things looked dire the first couple years, then fine, then in 2008/9 dire again, then OK for a decade or so, and right now, not so good...  Still have 8 years to go on their 30 years (or 18 years to go if they ER'ed)...

Also, hopefully the tone of my posts comes across OK, I'm not out to pop the bubble of FIRE, I just like devils-advocate style discussion and challenging of assumptions.  It's hard to get this across online that I'm curious and excited about the discussion, not being disagreeable just to be difficult.

[bacchi]

Yes and no.  People like to bring up the Y2K retiree - things looked dire the first couple years, then fine, then in 2008/9 dire again, then OK for a decade or so, and right now, not so good...  Still have 8 years to go on their 30 years (or 18 years to go if they ER'ed)...

Y2k retiree:

As of the end of April, 2022, those with a global stock portfolio would have $937k remaining in nominal dollars, which is $549k in year 2000 dollars. That represents 13.7 years of spending remaining with 0% real returns.

(bolded)

That's assuming that the Y2K retiree is an economic automaton and didn't reduce spending at any point, even during the pandemic when everyone else stopped traveling.

As of 8/31, there is still $511k of year 2000 dollars remaining; or, over 12 years of spending with 0% real returns. Buying TIPS would see the Y2k retiree through.

[EscapeVelocity2020]

Y2k retiree:

As of the end of April, 2022, those with a global stock portfolio would have $937k remaining in nominal dollars, which is $549k in year 2000 dollars. That represents 13.7 years of spending remaining with 0% real returns.

(bolded)

That's assuming that the Y2K retiree is an economic automaton and didn't reduce spending at any point, even during the pandemic when everyone else stopped traveling.

As of 8/31, there is still $511k of year 2000 dollars remaining; or, over 12 years of spending with 0% real returns. Buying TIPS would see the Y2k retiree through.

Well, if no one else is going to comment...  first thanks for that.  0% real returns are hard to come by this year (you do realize we have 8% inflation right?), but I understand that the point is that 3-4% average real returns should be possible over the next 10 years.  I was more interested in the idea of buying TIPS.  'Real TIPS' - the ones directly offered by the government - are pretty limited so you can't buy $500k this year even if you wanted to, not that most people would want to...  so what exactly are you recommending this retiree do if you were them?

Edit to add the link to the Portfolio Visualizer from the Boglehead thread - https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=2&annualAdjustment=40000&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=30&symbol2=VGTSX&allocation2_1=30&symbol3=VBMFX&allocation3_1=40

[mistymoney]

I guess the point is, getting a couple years of ER in my 40's at the expense of worrying about FI in my 70's isn't a good trade-off. We won't know that outcome until it's too late, but there is good evidence that the kind of conditions we are currently experiencing would lend itself to FIRE troubles.  Compounding on this, I'm pretty sure Social Security will be a shadow of what it was for current beneficiaries.  So I'd love to get some new information to add to the reassurances that, say, inflation in ER isn't a problem.  I'm pretty sure none of the FIRE blogs or fora talked about being prepared for high inflation, but that would've been pretty awesome to see a blogger 'inflation prepping' in 2020 - buying their forever house in cash with solar panels, 10 years of food, a new EV and a set of spare tires... 

If you FIRED in your mid-40s, by your early 50s you'll know if you're in great shape, or potentially in for a nail biter of a retirement on a 4% withdrawal rate. For some careers, going back to work for an extra few years is straightforward. For others, once you are out you are out. But nobody is going to go to sleep 69 feeling like their are in great shape after being FIRE for three decades and way up on their 70th birthday to find out they are barely scraping by and need to go work as a greeter at Walmart.

Sequence of returns risk really has to hit you in the first decade or your stash has already grown so much that you're not only not at risk of running out of money but you're not at risk of having to worry about running out of money.

And people on this forum have been talking about the value of simply owning your own home (with or without a mortgage) as a non-trivial inflation hedge for years. If housing is 1/3 of a typically retiree's spend, locking that much of your spending out of inflation -- probably a bit less since property taxes and maintenance will still go up with inflation -- makes a big difference in high(er) inflation environments.

There is definitely more that could be done. I like the idea of arguing for solar panels + an EV as an inflation hedge. Less thrilled with the idea of living off 10 year shelf stable food indefinitely. Personally I'd find it reasonable to cut back elsewhere to enjoy meals.

[mistymoney]

I guess the point is, getting a couple years of ER in my 40's at the expense of worrying about FI in my 70's isn't a good trade-off. We won't know that outcome until it's too late, but there is good evidence that the kind of conditions we are currently experiencing would lend itself to FIRE troubles.  Compounding on this, I'm pretty sure Social Security will be a shadow of what it was for current beneficiaries.  So I'd love to get some new information to add to the reassurances that, say, inflation in ER isn't a problem.  I'm pretty sure none of the FIRE blogs or fora talked about being prepared for high inflation, but that would've been pretty awesome to see a blogger 'inflation prepping' in 2020 - buying their forever house in cash with solar panels, 10 years of food, a new EV and a set of spare tires... 

If you FIRED in your mid-40s, by your early 50s you'll know if you're in great shape, or potentially in for a nail biter of a retirement on a 4% withdrawal rate. For some careers, going back to work for an extra few years is straightforward. For others, once you are out you are out. But nobody is going to go to sleep 69 feeling like their are in great shape after being FIRE for three decades and way up on their 70th birthday to find out they are barely scraping by and need to go work as a greeter at Walmart.

Sequence of returns risk really has to hit you in the first decade or your stash has already grown so much that you're not only not at risk of running out of money but you're not at risk of having to worry about running out of money.

And people on this forum have been talking about the value of simply owning your own home (with or without a mortgage) as a non-trivial inflation hedge for years. If housing is 1/3 of a typically retiree's spend, locking that much of your spending out of inflation -- probably a bit less since property taxes and maintenance will still go up with inflation -- makes a big difference in high(er) inflation environments.

There is definitely more that could be done. I like the idea of arguing for solar panels + an EV as an inflation hedge. Less thrilled with the idea of living off 10 year shelf stable food indefinitely. Personally I'd find it reasonable to cut back elsewhere to enjoy meals.

Yes and no.  People like to bring up the Y2K retiree - things looked dire the first couple years, then fine, then in 2008/9 dire again, then OK for a decade or so, and right now, not so good...  Still have 8 years to go on their 30 years (or 18 years to go if they ER'ed)...

what's your definition of OK?

Because the stock market and people are two different POVs. The stock market moved into bull territory but that didn't mean that individual retirees were ok. Some were, but some never recovered,  -> some never recovered.

2008 gets talked about as a separate event, but the stock market never made it back to pre Y2K levels until about 2015/6. In 2008 while the stocks bottomed out I think that bonds also dropped in value by quite a bit.

so 15 years with no growth and 15 years of expense taken out? Plus two big drops? Add in a little inflation and it sounds like a nightmare, one I'd wish to avoid!

I would think that those who did come under the survive to thrive side of it likely were already collecting ss, medicare, had a paid off house, and/or maybe a pension or a lot in treasuries instead of bonds, or something. I'd really like to get more info on those that navigated that successfully.

I just really don't see 60/40 stocks bonds cutting it.

And then if we do look at 15 years of no growth, I am wondering how those who retired in 1990 - 1999 fared as well. Seems like 1999 may have have caused even the most level headed to



https://www.youtube.com/watch?v=rblt2EtFfC4

[FIRE 20/20]

All this feel-good stuff about being currently ER is well understood, that is why we are on a FIRE forum pursing FI and ER, and we all ultimately have to determine our preference for OMY of work vs. ER.  I'm here to get exposed to new ideas.  I'd love it if, somewhere in all these 'reassurances that 4% SWR baked in inflation', that folks would actually discuss where they are seeing unexpected benefits of ER to offset inflation that they would otherwise have missed had they been working.

It's pretty obvious to me that getting COLA income during times of high inflation and continuing to DCA and not spend the retirement 'stache during a market swoon are going to make my FI stronger (e.g. my 4% SWR will start when CAPE is lower, I'll have more fat in that 4%SWR budget and/or I'll get to a bulletproof 3.5% SWR, etc).  But I'm here for the ER folks to drop some inflation beating benefits specific to being early-retired.

You may want to look at the thread on beating inflation for this.  However, I will say that while I planned on a 3.5% withdrawal rate my actual withdrawal rate has been between closer to 2.3%.  I'm much, much happier than I thought I could be so I'm spending less on going out (I enjoy cooking and have more time now), less on maintenance (I like learning new skills), less on travel (no need to escape work, travel is cheaper because I'm flexible), and lots of other things.  I never intended to spend this little, but I am living a better life than I realized was possible even though I'm spending way less than I planned.  If you really want more examples or more details I'm happy to share, but it would just be more of the same.  But the point is I could increase my spending significantly, but I'm not sure what I could spend it on to improve my life. 

I guess the point is, getting a couple years of ER in my 40's at the expense of worrying about FI in my 70's isn't a good trade-off.  We won't know that outcome until it's too late, but there is good evidence that the kind of conditions we are currently experiencing would lend itself to FIRE troubles.  Compounding on this, I'm pretty sure Social Security will be a shadow of what it was for current beneficiaries.  So I'd love to get some new information to add to the reassurances that, say, inflation in ER isn't a problem.  I'm pretty sure none of the FIRE blogs or fora talked about being prepared for high inflation, but that would've been pretty awesome to see a blogger 'inflation prepping' in 2020 - buying their forever house in cash with solar panels, 10 years of food, a new EV and a set of spare tires... 

Just hoping to move this conversation forward again, the 'being-ER euphoria' from the last decade has been done to death.  Inflation was low, market returns were great, and worrying about the 4% rule was a waste of time.  FIRE was the way to go.  We got that message.  Times are different now.

But the 4% rule of thumb was not based on the past few years or few decades.  It made it through times with much higher inflation than we have now.  Times are different now, but there's no reason to expect that things will be significantly worse than the worst of the past 100-ish years for FIRE.  They could be worse, but could be better.  More stability and knowledge about the financial markets seems likely, so the stagflation of the '70s or market crashes of the '30s are unlikely to re-occur.  But other things could make for more instability.  We don't know.  The only thing I do know is there is always a tradeoff between security and excess on the one hand and risk of cutting expenses more than you wanted on the other hand.  The problem is that the 4% rule is biased heavily towards being conservative.  In most cases you'll end up with way more money in 30 years than you started with.  In a small percentage of cases you'll need to make some kind of adjustment to get through.  Since most people here are way more conservative than the already conservative 4% rule.  This super duper extra safe approach (which I took, by the way, and now regret) results in a 100% guaranteed loss - the loss of being FIREd during the youngest and probably healthiest year of life you have left at that point.  That extra OMY really does come with a high cost that's hard to see while in the middle of your working life.  I sometimes kick myself for wasting a full year working when I could have quit my job earlier.  But at least I figured it out before I lost too many of those young-ish healthy years. 

I have to admit wondering if we're talking past each other a little bit.  My going-in assumption to the topic of this thread is that most people who FIREd in 21-22 did the typical sub-4% plan with extra safety margin or backup plans on top.  That's where my optimism for them pulling through just fine comes in.  If you're assuming someone FIREd with a barebones 4% withdrawal rate and refuses to make any kind of changes, then I'm 100% behind the concern for those people. 

[bacchi]

Y2k retiree:

As of the end of April, 2022, those with a global stock portfolio would have $937k remaining in nominal dollars, which is $549k in year 2000 dollars. That represents 13.7 years of spending remaining with 0% real returns.

(bolded)

That's assuming that the Y2K retiree is an economic automaton and didn't reduce spending at any point, even during the pandemic when everyone else stopped traveling.

As of 8/31, there is still $511k of year 2000 dollars remaining; or, over 12 years of spending with 0% real returns. Buying TIPS would see the Y2k retiree through.

Well, if no one else is going to comment...  first thanks for that.  0% real returns are hard to come by this year (you do realize we have 8% inflation right?), but I understand that the point is that 3-4% average real returns should be possible over the next 10 years.  I was more interested in the idea of buying TIPS.  'Real TIPS' - the ones directly offered by the government - are pretty limited so you can't buy $500k this year even if you wanted to, not that most people would want to...  so what exactly are you recommending this retiree do if you were them?

Are you thinking of iBonds?

Because I'd go to TreasuryDirect and buy all TIPS 10yr Notes in one go. The 9/2 non-competitive auction was only a little over half subscribed, leaving plenty of room for my measly $900K (the limit is $10M and the offer had $14M left).*

TIPS pay out semi-annually, which complicates taxes, but the Y2K retiree would only have to sell 4.5% of the TIPS each year to make up the withdrawal difference, extending the $511k to 21 years. More-or-less.


* See the high yield at https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/R_20220912_3.pdf and the offer at https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/NCR_20220912_3.pdf

[mspym]

The other theme in this thread that I have been finding maddening is the persistent refusal to listen to the people who *did* FIRE in 21-22 or to negate/reject their tactics for managing inflation*. Why on earth would I bother offering up what I am doing to an audience that isn't receptive? I'm just going to keep booping along, doing my own thing, and if it makes you feel better to think I am I dunno going to die in a gutter somewhere then off you pop. Have fun.

*My specifics:
- buying a house outright in my home country (-30% expenses, rent,)
- children moving out (-??? TBD)
- moving to our house where the exchange rate favours us (+5-15% income, currency, -$5k p.a. health insurance)
- plans to build out a garden & add solar
- already reduced meat and dairy consumption (due to health and climate change factors but helps with expenses)
- building a side hustle (+$6-8k p.a. income)
- option to pick up contract work if needed

[maizefolk]

I guess the point is, getting a couple years of ER in my 40's at the expense of worrying about FI in my 70's isn't a good trade-off. We won't know that outcome until it's too late, but there is good evidence that the kind of conditions we are currently experiencing would lend itself to FIRE troubles.  Compounding on this, I'm pretty sure Social Security will be a shadow of what it was for current beneficiaries.  So I'd love to get some new information to add to the reassurances that, say, inflation in ER isn't a problem.  I'm pretty sure none of the FIRE blogs or fora talked about being prepared for high inflation, but that would've been pretty awesome to see a blogger 'inflation prepping' in 2020 - buying their forever house in cash with solar panels, 10 years of food, a new EV and a set of spare tires... 

If you FIRED in your mid-40s, by your early 50s you'll know if you're in great shape, or potentially in for a nail biter of a retirement on a 4% withdrawal rate. For some careers, going back to work for an extra few years is straightforward. For others, once you are out you are out. But nobody is going to go to sleep 69 feeling like their are in great shape after being FIRE for three decades and way up on their 70th birthday to find out they are barely scraping by and need to go work as a greeter at Walmart.

Sequence of returns risk really has to hit you in the first decade or your stash has already grown so much that you're not only not at risk of running out of money but you're not at risk of having to worry about running out of money.

And people on this forum have been talking about the value of simply owning your own home (with or without a mortgage) as a non-trivial inflation hedge for years. If housing is 1/3 of a typically retiree's spend, locking that much of your spending out of inflation -- probably a bit less since property taxes and maintenance will still go up with inflation -- makes a big difference in high(er) inflation environments.

There is definitely more that could be done. I like the idea of arguing for solar panels + an EV as an inflation hedge. Less thrilled with the idea of living off 10 year shelf stable food indefinitely. Personally I'd find it reasonable to cut back elsewhere to enjoy meals.

Yes and no.  People like to bring up the Y2K retiree - things looked dire the first couple years, then fine, then in 2008/9 dire again, then OK for a decade or so, and right now, not so good...  Still have 8 years to go on their 30 years (or 18 years to go if they ER'ed)...

Also, hopefully the tone of my posts comes across OK, I'm not out to pop the bubble of FIRE, I just like devils-advocate style discussion and challenging of assumptions.  It's hard to get this across online that I'm curious and excited about the discussion, not being disagreeable just to be difficult.

We won't know for sure whether or not the 2000 retiree will make it 30 years without running out of money or not. But it was certainly clear within a couple of years that the 2000 retiree was in for a nail biter of a retirement. If someone retired at age 48 in 2000, they aren't waking up today at age 70 to suddenly discover that they are in for an old age worrying about money. If they have the sort of disposition where they were going to stress about not having enough, they had the whole decade of their 50s to correct course, whether that was spending cuts or declaring a failed FIRE attempt and returning to full time work for another few years or even a full extra decade*.

*Obviously this is more feasible in some careers than in others.

The point I'm making isn't that there is no risk of having a stressful retirement if you retire with a 4% withdrawal rate. Just that you'll know if it happened within a few years, which is different from the scenario is sounds like you are worried about (money being tight when you are too old to easily work at a non-menial job).

[Malossi792]

The other theme in this thread that I have been finding maddening is the persistent refusal to listen to the people who *did* FIRE in 21-22 or to negate/reject their tactics for managing inflation*. Why on earth would I bother offering up what I am doing to an audience that isn't receptive? I'm just going to keep booping along, doing my own thing, and if it makes you feel better to think I am I dunno going to die in a gutter somewhere then off you pop. Have fun.

*My specifics:
- buying a house outright in my home country (-30% expenses, rent,)
- children moving out (-??? TBD)
- moving to our house where the exchange rate favours us (+5-15% income, currency, -$5k p.a. health insurance)
- plans to build out a garden & add solar
- already reduced meat and dairy consumption (due to health and climate change factors but helps with expenses)
- building a side hustle (+$6-8k p.a. income)
- option to pick up contract work if needed

Please keep the replies coming.
Some of us prefer to just nod along in silence. But reading positive, can-do replies helps ease the soul.

[LD_TAndK]

The theoretical year 2000 retiree who has had 22 years of freedom and still has 7.5 years expenses sounds like great news to me, especially if this is touted as a "failure"!

I think some of us get caught in the trap of thinking we can plan our financial future with total security. Thinking we should crunch numbers until we produce a "perfect" portfolio or withdrawal rate. But life will always be too variable. Pick a pretty good solution, then bend like grass in the wind.

From an academic perspective though the back testing results are definitely interesting!

[vand]

Y2k retiree:

As of the end of April, 2022, those with a global stock portfolio would have $937k remaining in nominal dollars, which is $549k in year 2000 dollars. That represents 13.7 years of spending remaining with 0% real returns.

(bolded)

That's assuming that the Y2K retiree is an economic automaton and didn't reduce spending at any point, even during the pandemic when everyone else stopped traveling.

As of 8/31, there is still $511k of year 2000 dollars remaining; or, over 12 years of spending with 0% real returns. Buying TIPS would see the Y2k retiree through.

Well, if no one else is going to comment...  first thanks for that.  0% real returns are hard to come by this year (you do realize we have 8% inflation right?), but I understand that the point is that 3-4% average real returns should be possible over the next 10 years.  I was more interested in the idea of buying TIPS.  'Real TIPS' - the ones directly offered by the government - are pretty limited so you can't buy $500k this year even if you wanted to, not that most people would want to...  so what exactly are you recommending this retiree do if you were them?

Edit to add the link to the Portfolio Visualizer from the Boglehead thread - https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=2&annualAdjustment=40000&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=30&symbol2=VGTSX&allocation2_1=30&symbol3=VBMFX&allocation3_1=40

edit: Not really aimed at you EscapeV2020 (more the previous post), still:
**
It's great that that AA has held up so well but this can only have been known with hindsight. The bonds saved your ass in 2000, but that isn't the case for 2021.

What about these alternative AA scenarios?
100% US Stocks
50/50 US/Int
100% Int

These portfolios are not looking so clever now.


And although I haven't shown it, if your portfolio was 100% Int dev-world stocks then you would be hitting portfolio failure just about now.  I mean, sure, I may be picking out some weird and unlikely AAs now to highlight the point, but it shows how, if the worst unfolds, you need to get everything right in order to not fall by the wayside, and no one knows what is going to be optimal balance to see us through the next cycle.

[vand]

The other theme in this thread that I have been finding maddening is the persistent refusal to listen to the people who *did* FIRE in 21-22 or to negate/reject their tactics for managing inflation*. Why on earth would I bother offering up what I am doing to an audience that isn't receptive? I'm just going to keep booping along, doing my own thing, and if it makes you feel better to think I am I dunno going to die in a gutter somewhere then off you pop. Have fun.

*My specifics:
- buying a house outright in my home country (-30% expenses, rent,)
- children moving out (-??? TBD)
- moving to our house where the exchange rate favours us (+5-15% income, currency, -$5k p.a. health insurance)
- plans to build out a garden & add solar
- already reduced meat and dairy consumption (due to health and climate change factors but helps with expenses)
- building a side hustle (+$6-8k p.a. income)
- option to pick up contract work if needed

Not really... no one is denying that you can do things to help bring down living expensies, but just the fact that you have had to resort to inflation mitigating measures means that you chose a bad time to retire! You would still have been far better off if you weren't compelled into this following this course of action.

[mspym]

The other theme in this thread that I have been finding maddening is the persistent refusal to listen to the people who *did* FIRE in 21-22 or to negate/reject their tactics for managing inflation*. Why on earth would I bother offering up what I am doing to an audience that isn't receptive? I'm just going to keep booping along, doing my own thing, and if it makes you feel better to think I am I dunno going to die in a gutter somewhere then off you pop. Have fun.

*My specifics:
- buying a house outright in my home country (-30% expenses, rent,)
- children moving out (-??? TBD)
- moving to our house where the exchange rate favours us (+5-15% income, currency, -$5k p.a. health insurance)
- plans to build out a garden & add solar
- already reduced meat and dairy consumption (due to health and climate change factors but helps with expenses)
- building a side hustle (+$6-8k p.a. income)
- option to pick up contract work if needed

Not really... no one is denying that you can do things to help bring down living expensies, but just the fact that you have had to resort to inflation mitigating measures means that you chose a bad time to retire! You would still have been far better off if you weren't compelled into this following this course of action.

Ok buddy. So the part where we are literally deploying our future retirement plans which just happen to have the side benefits of lower costs means this is a failure? Then my original suspicion stands - there is no point engaging further. Think whatever you like. I don’t want to OMY myself into the grave just to make an internet stranger happy.

[Morning Glory]

The other theme in this thread that I have been finding maddening is the persistent refusal to listen to the people who *did* FIRE in 21-22 or to negate/reject their tactics for managing inflation*. Why on earth would I bother offering up what I am doing to an audience that isn't receptive? I'm just going to keep booping along, doing my own thing, and if it makes you feel better to think I am I dunno going to die in a gutter somewhere then off you pop. Have fun.

*My specifics:
- buying a house outright in my home country (-30% expenses, rent,)
- children moving out (-??? TBD)
- moving to our house where the exchange rate favours us (+5-15% income, currency, -$5k p.a. health insurance)
- plans to build out a garden & add solar
- already reduced meat and dairy consumption (due to health and climate change factors but helps with expenses)
- building a side hustle (+$6-8k p.a. income)
- option to pick up contract work if needed

Not really... no one is denying that you can do things to help bring down living expensies, but just the fact that you have had to resort to inflation mitigating measures means that you chose a bad time to retire! You would still have been far better off if you weren't compelled into this following this course of action.

Of course it would be nice if things went perfectly and nobody had to think about or use contingency plans ever. @mspym had a plan to mitigate inflation and used it, which doesn’t mean she picked a bad time to retire.  We can all choose between going back to full time work vs picking up a part time gig and coasting vs reduce our expenses.  That doesn't mean we failed, just that we got some bad luck and dealt with it in the way we saw fit.

[ATtiny85]

The other theme in this thread that I have been finding maddening is the persistent refusal to listen to the people who *did* FIRE in 21-22 or to negate/reject their tactics for managing inflation*. Why on earth would I bother offering up what I am doing to an audience that isn't receptive? I'm just going to keep booping along, doing my own thing, and if it makes you feel better to think I am I dunno going to die in a gutter somewhere then off you pop. Have fun.

*My specifics:
- buying a house outright in my home country (-30% expenses, rent,)
- children moving out (-??? TBD)
- moving to our house where the exchange rate favours us (+5-15% income, currency, -$5k p.a. health insurance)
- plans to build out a garden & add solar
- already reduced meat and dairy consumption (due to health and climate change factors but helps with expenses)
- building a side hustle (+$6-8k p.a. income)
- option to pick up contract work if needed

Not really... no one is denying that you can do things to help bring down living expensies, but just the fact that you have had to resort to inflation mitigating measures means that you chose a bad time to retire! You would still have been far better off if you weren't compelled into this following this course of action.

Of course it would be nice if things went perfectly and nobody had to think about or use contingency plans ever. @mspym had a plan to mitigate inflation and used it, which doesn’t mean she picked a bad time to retire.  We can all choose between going back to full time work vs picking up a part time gig and coasting vs reduce our expenses.  That doesn't mean we failed, just that we got some bad luck and dealt with it in the way we saw fit.

And what we absolutely cannot plan is to go back and retire earlier. Yes, the group of folks who pulled the plug on a shoestring in 2000 have had to make adjustments. However, we see comments all the time about people who retired in-other-then-2000 who have portfolios that are larger now than when they retired. I feel way worse for that group. Needing to buckle down for a couple years (which is easy to do really) and lean on fixed income accounts is really no big deal. I'll take that over shuffling down the hall of an assisted living facility with my walker reminiscing about the time I had to pull out of marathon because a series of work trips got in the way when I was 48.

[Cranky]

The other theme in this thread that I have been finding maddening is the persistent refusal to listen to the people who *did* FIRE in 21-22 or to negate/reject their tactics for managing inflation*. Why on earth would I bother offering up what I am doing to an audience that isn't receptive? I'm just going to keep booping along, doing my own thing, and if it makes you feel better to think I am I dunno going to die in a gutter somewhere then off you pop. Have fun.

*My specifics:
- buying a house outright in my home country (-30% expenses, rent,)
- children moving out (-??? TBD)
- moving to our house where the exchange rate favours us (+5-15% income, currency, -$5k p.a. health insurance)
- plans to build out a garden & add solar
- already reduced meat and dairy consumption (due to health and climate change factors but helps with expenses)
- building a side hustle (+$6-8k p.a. income)
- option to pick up contract work if needed

Not really... no one is denying that you can do things to help bring down living expensies, but just the fact that you have had to resort to inflation mitigating measures means that you chose a bad time to retire! You would still have been far better off if you weren't compelled into this following this course of action.

It depends on what you want your life to look like, I guess. Some people are planning a more expensive retirement than my life ever was. My retirement life was always going to involve a paid for house, a big garden, a lot of long walks and trips to the library.

So *far*, while I am uneasy about price increases, they haven't much affected us. I don't think that 2021 was the optimal time for dh to retire from a financial perspective, but it definitely was from a mental health perspective.

[wageslave23]

I think there are a few different points to be made and the thread is getting convoluted.

1. First point (I don't want to put words in anyone's mouth, but..) I think vand and others are saying, yes trying to time the market is bad, but on a macroeconomic scale it is easy to see when the market is grossly overinflated.  Their point is the last few years of the 90's and the most recent two years, the market was severely overvalued and everyone should have known this and planned accordingly.  Yes, you don't know when bottom will fall out, but you do know it is imminent.  This point is debateable, and I think posters should focus on this.

2. Blindly and strictly following the 4% rule is silly, either because the next 50 years may not reflect the last 100 years, or individual life circumstances could change.  You need to have some flexibility/cushion.  Whether that's a 3% withdrawal rate, or vacations and other expenses that could be cut if needed, or willingness to go back to work.  It seems like the consensus is that everyone agrees with some iteration of this point so there is no need to further discuss it.

3.  If you assume points 1 and 2 are correct (and this is an assumption), then retirees in 2021/2022 should have padded their cushion or be willing to cut expenses, go back to work if necessary.  They should always be "baking this in" but even more so the last two years.  For example if during an "average" market valuation time, you are comfortable with a 4% FIRE swr, then if you retired during the last two years, you should have foreseen that the markets were severely overpriced and more likelier than average to be among the few failure times in history and adjusted your stache accordingly or made sure you are willingly to make the changes likely necessary.

[By the River]

My wife is retiring on November 30.  Did she pick the worst time to retire?  Maybe, we will find out in the next couple of decades.  But here's the safety buffers we have in place...

• 3.7% withdrawal rate (as of a couple of months ago, probably higher now)
• A large lump sum pension buyout that we will get in January/February so its not changing in value due to market fluctuations until then
• I have some nice golden handcuffs that I get if I work 18 more months.  But I could work longer than that if the market is still down
• The 3.7% was based on neither of us working any after retirement.  My wife could easily consult for her current company without having the managerial responsibilities
• We have a FAT fire budget. 
• We have lots of equity in our house and in a vacation condo that could be tapped somehow in the future.

Being flexible is the key to our situation.

[GuitarStv]

edit: Not really aimed at you EscapeV2020 (more the previous post), still:
**
It's great that that AA has held up so well but this can only have been known with hindsight. The bonds saved your ass in 2000, but that isn't the case for 2021.

What about these alternative AA scenarios?
100% US Stocks
50/50 US/Int
100% Int

These portfolios are not looking so clever now.


And although I haven't shown it, if your portfolio was 100% Int dev-world stocks then you would be hitting portfolio failure just about now.  I mean, sure, I may be picking out some weird and unlikely AAs now to highlight the point, but it shows how, if the worst unfolds, you need to get everything right in order to not fall by the wayside, and no one knows what is going to be optimal balance to see us through the next cycle.

How the heck did 50/50 US/International return less than 100% US and 100% International?  Intuitively, I'd have figured that it would end up in between the results of the two.

[vand]

edit: Not really aimed at you EscapeV2020 (more the previous post), still:
**
It's great that that AA has held up so well but this can only have been known with hindsight. The bonds saved your ass in 2000, but that isn't the case for 2021.

What about these alternative AA scenarios?
100% US Stocks
50/50 US/Int
100% Int

These portfolios are not looking so clever now.


And although I haven't shown it, if your portfolio was 100% Int dev-world stocks then you would be hitting portfolio failure just about now.  I mean, sure, I may be picking out some weird and unlikely AAs now to highlight the point, but it shows how, if the worst unfolds, you need to get everything right in order to not fall by the wayside, and no one knows what is going to be optimal balance to see us through the next cycle.

How the heck did 50/50 US/International return less than 100% US and 100% International?  Intuitively, I'd have figured that it would end up in between the results of the two.

Sorry, I seem to have mixed up the labels. Here it is again:


What is perhaps most interesting is that the 100%INT portfolio was doing the best at the peak of the 2007 bull market - you would not have been stupid to have put most (or even all) of your eggs into that basket if you were a die hard stock enthusiast, with the 100%INT portfolio having regained as much as 85% of its starting value, compared to around 62% if you had held US stocks.  Even as late on as 2011 the 100%INT portfolio was killing the 100%US portfolio.

Then fast forward to today and look what has happened - the roles are reversed and the 100%INT allocation is now the one teetering on the brink of portfolio failure.

It's incredibly easy with the benefit of hindsight to say "yeah, I would have stuck to US stocks all the way through" but if anyone thinks they saw that switcheroo coming then they are just kidding themselves.

I suspect more people would have gone the other way and increased their International exposure just at the wrong time after US stocks had trailed for a decade.