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

[bmjohnson35]

A retirement in Jan 2000 would be down 20% for a 60/40 portfolio and down 60% for 100/0 portfolio.

Anybody funding a 4% withdrawal off 100% equities starting in 2000 is pretty well screwed. The 60/40 portfolio isn't doing super hot either, but might be ok. Not really my ideal after 22 years.

Note: click the 'inflation adjusted' button

Yeah, they have been "screwed" almost from day one, but somehow the portfolio has clung on up until now.

The remarkable datapoint imo is not where it is today, it's where it was at the end of Feb 2009 where it was $268k in real terms - that's a 73% real fall in just 10 years - it's absolutely terrifying.

At the nadir you have a x6.75 portfolio and are faced with selling a further 15% of the portfolio each year to meet living costs.  No one in their right mind is going to think their portfolio is going to survive under those conditions.

Sounds like you should keep on working dude. A 20% drop over 22 yr period sounds rather good to me. 

[GuitarStv]

We are/were getting pretty close to retirement  . . .  I'm happy that we didn't actually follow through.  No real harm in hanging on for a couple more years.

[hoodedfalcon]

This is me, kinda sorta. I resigned last July the moment my student loans were forgiven with PSLF, bc burnout and anxiety was making me miserable. I had 2 years of cash, rental income, and sporadic tradeline income. Just as my last paycheck came in, my dog needed thousands of dollars in vet care and my car needed a new hybrid battery. Le sigh. Shit happens.

My current cash burn rate is quite low at about $500-$1000/month after taking into account the rental and tradeline income. I plan to put 4-5 more cards in the tradeline rotation by the end of the year.

I have had about 500K invested + paid off rental house. I am lean/coast FIRE at best, but most likely I will use this time as a much-needed sabbatical and will either get a part-time gig or maybe go back to full-time work? It's hard to say how things will go, but my worst-case scenario isn't that bad. I can sell the rental or I can get a job, or both, or something else. I really don't think folks who are on MMM don't have some sort of rational plan for exactly what is happening now, or worse. I have lost zero sleep.

[patchyfacialhair]

Meh. This is why safety margins are important.

My father retired in 4Q 2021. Bad time, according to OP. But, his pension plus SS cover the expenses, and they have a cash cushion of a couple years expenses. They didn't pay off their mortgage, in order to preserve that cash cushion. So while it stinks that the retirement/investment accounts are a little down, he retired with the ability to not need to draw anything from investment accounts.

For those of us who don't have a pension to look forward to, like my wife and me, just make sure you have a couple years of low risk money to draw from initially to minimize the sequence of returns risk that we're all afraid of. And if that plan doesn't work, there's probably more important survival-related things to worry about in that case.

[FireLane]

I retired in July 2021. I'm not worried.

Admittedly, I have the cushiest safety net of all: My wife is still working. Her original plan was to retire in 2022, but she was already concerned about health insurance, and with this downturn, she wants to work a while longer. Her job isn't stressful, and her income is sufficient to cover our expenses. It'll mean less freedom for us to travel in exchange for not having to sell stock while the market is down. Seems like a fair trade.

But even if we didn't have that backup, I think we'd be just fine. I was targeting a 3% withdrawal rate or less. My portfolio is more like 35-40x, and even after the recent drop, my stash is well above my original FIRE target number.

A crash right at the beginning of retirement obviously isn't ideal from a sequence-of-returns perspective, but if your plan has enough of a safety margin built in, it's way too early to panic. If we're in for a decade of 1970s-style stagflation with high inflation and low returns, that could be a problem for us retirees. Or this could turn out to be an insignificant blip, just like the COVID crash in 2020.

[Glenstache]

I formally transitioned to coast mode on Jan 17th and reduced to part time. The market had one of it's earlier big drops on the following Monday. Meh.

[FIRE 20/20]

I've been on this forum now for (checks profile) over 7 years and I still haven't seen one of the mythical people who hit 25x and pulled the plug with no plan to adjust if needed.  I may find one sometime, but so far I think they're in the same category as Santa Claus. 

HO HO HO!! LOL

I really had no plan in regards to 'retirement' as mine was unplanned as I left a position without one and then eventually decided (sort of) not to look for another. A combination of timing, some time off, covid hitting etc. Some days I still say (even in posts) and not sure I FIRE'd but it's been 3 years. I was saving $ I wanted to retire early but had no budget, hadn't tracked spending, didn't have a plan around healthcare (still an issue) but as reality set in on not working started to figure it out and still am.

Glad to meet you and thank you for your post!  Do you really think you wouldn't either cut spending or earn more money if it looked like you were headed towards running out of money before running out of life?  It does seem to me that if you got to where you are now you're probably smart and capable enough to pay attention to your 'stache and if needed do some combination of earning more money or reducing spending if it looks like things are headed towards failure.  But if you really would not plan to adjust either spending or earnings before going broke then I will definitely count you as the first I've seen on these forums. 

[FIRE Artist]

This is why I am not using the 4% rule.  Sure you could just spend less in down years, but what does spend less actually mean?  I am now a full convert to Variable Percentage Withdrawal system.  I am putting more focus on the calculated value for how much I could withdraw after a 50% decline in the stock market.  Once I am comfortable with that number I am ready to retire. 

[WalkaboutStache]

I guess I'm unclear about who we are talking about in this thread vs who the great resignation consisted of.

This thread seems to concern full FIRE people thinking they were done forever. I wonder how many of the GR were people who had had enough for right now - and had enough squirreled away or other resources enabling them to step away for a time.

While the job market is still great for the job seekers - how long that may last if a lot of these folks go back to work remains to be seen, something to consider for anyone who may be wanting a change and hasn't put themselves out there yet....

@mistymoney, how does locking in cheap debt help?  I have been thinking about it, essentially to defer withdrawals for a few years, but I am not sure my thinking is right.

[dresden]

This is why I am not using the 4% rule.  Sure you could just spend less in down years, but what does spend less actually mean?  I am now a full convert to Variable Percentage Withdrawal system.  I am putting more focus on the calculated value for how much I could withdraw after a 50% decline in the stock market.  Once I am comfortable with that number I am ready to retire.

I think the 4% rule is fine although when I retired in 2019 I assumed the stock market was near the top of a bull cycle and chose 3% instead.  My actual draw has only been 1.5% thanks to a fixed corporate pension which isn't great, but reduces my draw requirements.

The stock market likely hasn't hit bottom but as always pulling out now means risking getting back in when it's too late - after the recovery already started.

I keep my next 5 years of draw money in high-yield savings account so my longer-term savings isn't impacted by market fluctuations.  In a down market I'll hold off transferring to high-yield savings as long as I can - hopefully when the market recovers.

Worst-case scenario you can always get a part-time job that fits your interests.

[mistymoney]

I guess I'm unclear about who we are talking about in this thread vs who the great resignation consisted of.

This thread seems to concern full FIRE people thinking they were done forever. I wonder how many of the GR were people who had had enough for right now - and had enough squirreled away or other resources enabling them to step away for a time.

While the job market is still great for the job seekers - how long that may last if a lot of these folks go back to work remains to be seen, something to consider for anyone who may be wanting a change and hasn't put themselves out there yet....

@mistymoney, how does locking in cheap debt help?  I have been thinking about it, essentially to defer withdrawals for a few years, but I am not sure my thinking is right.

I'm a little confused as to why my post was quoted for this question - was that a mistake?

[Ozlady]

DH retired end of 2020...at that time,  due to conflict of interests, we had to sell a huge parcel of shares ...and due to indecision, inability, lethargy we kinda sat on the cash..

Occasionally, when we feel like it, we will lob a small % into the stock market...

2 years later, we are still sitting on that pile of cash (all 7 figures of it OMG!)..  call it dumb luck?

But we never subscribed to the 4% hard rule anyway as we retired 100% on passive cash flows...on our rentals...

So if market really tanks all over, i see this as a great opportunity to build some serious wealth instead .....

So to answer the original OP, nope i do not think i pick the worst time to retire, on the contrary  we sold our shares at the tippy top (dumb luck!) and at the present time, it is still half the price we sold at ...

Retirement is Sweet!

[wageslave23]

I would recommend OP finds a new hobby. Contrarian opinions are nice, but if you believe we're all doomed all the time then maybe find your tribe and get some fresh air once in a while. Life is short, arguing with people on the internet won't improve your chances of FIRE success.

I for one welcome the word of caution. You are free to ignore it.

[2Birds1Stone]

I would recommend OP finds a new hobby. Contrarian opinions are nice, but if you believe we're all doomed all the time then maybe find your tribe and get some fresh air once in a while. Life is short, arguing with people on the internet won't improve your chances of FIRE success.

I for one welcome the word of caution. You are free to ignore it.

We're all shocked by this information ;)

Sent from my SM-N950U using Tapatalk

[BikeFanatic]

@wageslave23 that comment sounds like an attack to me, OP there is nothing wrong with being concerned and talking about it, Perhaps you object to the over the top language of being “the worst ever” year to retire. I personally retired in 2021 and don’t regret it, but of course I am concerned somewhat of the current situation but am not an alarmist.

[vand]

2 birds:
Well it wasn't dubbed the "everything bubble" for nothing.

Stocks, bonds & real-estate all being grossly overpriced does not leave a lot of places to hide if markets decide they want to mean-revert.

Alternatively your retirement and drawdown strategy could look like this:

[Mustache ride]

DH retired end of 2020...at that time,  due to conflict of interests, we had to sell a huge parcel of shares ...and due to indecision, inability, lethargy we kinda sat on the cash..

Occasionally, when we feel like it, we will lob a small % into the stock market...

2 years later, we are still sitting on that pile of cash (all 7 figures of it OMG!)..  call it dumb luck?

But we never subscribed to the 4% hard rule anyway as we retired 100% on passive cash flows...on our rentals...

So if market really tanks all over, i see this as a great opportunity to build some serious wealth instead .....

So to answer the original OP, nope i do not think i pick the worst time to retire, on the contrary  we sold our shares at the tippy top (dumb luck!) and at the present time, it is still half the price we sold at ...

Retirement is Sweet!

Dumb luck? It is quite the opposite. The S&P500 returned 27% in 2021, and is sitting at -13% for 2022. You have lost money keeping it on the sidelines.

Don't market time...

[Blissful Biker]

I've recently decided to shift to half time as opposed to retiring.  The company is terribly short staffed so they are relieved.  It feels like a good decision.  I can have a lovely lifestyle while eliminating anxiety about the markets and SORR.

What I have learned from this near-FIRE experience is the value of a cash buffer.  I read a study a few years ago (by Michael Kitces I think) showing that you'll perform better through maintaining your asset allocation as opposed to using a bucket strategy so I didn't create a cash pile.  While the study is probably true I now better understand that peace of mind is worth a few basis points.  Working half time covers our expenses but doesn't provide surplus for building a cash pile so I've turned off the DRIPs and will let it slowly build via dividends. 

[wageslave23]

@wageslave23 that comment sounds like an attack to me, OP there is nothing wrong with being concerned and talking about it, Perhaps you object to the over the top language of being “the worst ever” year to retire. I personally retired in 2021 and don’t regret it, but of course I am concerned somewhat of the current situation but am not an alarmist.

I think you might be confusing me with someone else. My only comment was that I welcome the OP's word of caution and that others are free to ignore it.

[shureShote]

I've recently decided to shift to half time as opposed to retiring.  The company is terribly short staffed so they are relieved.  It feels like a good decision.  I can have a lovely lifestyle while eliminating anxiety about the markets and SORR.

In the right circumstance, I can see that definitely relieving some anxiety. I would worry about it dragging out too long, but other than that, great!

[Thoughtful Mule]

For me the market correction is a bummer, but inflation is the real retirement killer (delayer) for my family. Having sold our house in 2020, and renting while we got our bearings in a new location, we are now facing a huge leap in housing costs, on the order of 20% of our total expenses. I hate having shitty timing, but this is the case. Hoping to be FI in 2022, we are looking at an additional 2-3 years. We've just put the pedal down, returning to dual incomes.

Life is still good.

[reeshau]

Life is still good.

Great attitude!!

The way I like to say it:  our worst-case scenario is the typical person's normal.

[WalkaboutStache]

I guess I'm unclear about who we are talking about in this thread vs who the great resignation consisted of.

This thread seems to concern full FIRE people thinking they were done forever. I wonder how many of the GR were people who had had enough for right now - and had enough squirreled away or other resources enabling them to step away for a time.

While the job market is still great for the job seekers - how long that may last if a lot of these folks go back to work remains to be seen, something to consider for anyone who may be wanting a change and hasn't put themselves out there yet....

@mistymoney, how does locking in cheap debt help?  I have been thinking about it, essentially to defer withdrawals for a few years, but I am not sure my thinking is right.

I'm not Misty Money but I assume they mean something like getting a low interest fixed rate HELOC or equity home loan or do a cash out refinance if you have a house. Or some kind of fixed rate low interest personal loan or even CC account balance loan (still lots of 0% CC offers with low fees - 2% or 3% -  out there that are good for 18 month to 2 years) that you can tap if needed. For example before I FIREd I took out a $75k HELOC on my paid off house (worth much much more). There were no fees at all and I only had to make small 1% monthly payments on any balance I had used. Since it was basicly to be used as a second emergency fund besides my "cash" (bonds and laddered CDs) emergency fund I never really touched it so didn't cost me anything. I had a 5 year draw period and an additional 15 year pay back period. I closed it after 5 years but was nice to know it was available after I quit my job just in case SHTF in the stock market (and it did but I didn't need to use the HELOC).

As for me personally I had a paid off house I planned to sell and downsize from, no debt, low cost lifestyle, a small future pension (Approx 15 years from my orginal FIRE date) and low cost medical, single (a mixed blessing as no back up partner who's income can help if you lose your stash but also no one to support or who spends too much if they lose their stash) and childless so FIREing on a much lower stash then most have here was easy. However the ability to be financially flexible and live on less during lean times is really not a bad thing.

Indeed it was a misquote, sorry @mistymoney.  Your reply is what I was thinking, @spartana . 

If the interest rate is low enough, I might take out a loan just to have some dry powder at hand.  I currently have 2 years of living expenses if I go with my current plan to geo-arbitrage but a cheap loan would add some security for a 2000-style meltdown, tacking a few more years to that cushion.

[Ozlady]

DH retired end of 2020...at that time,  due to conflict of interests, we had to sell a huge parcel of shares ...and due to indecision, inability, lethargy we kinda sat on the cash..

Occasionally, when we feel like it, we will lob a small % into the stock market...

2 years later, we are still sitting on that pile of cash (all 7 figures of it OMG!)..  call it dumb luck?

But we never subscribed to the 4% hard rule anyway as we retired 100% on passive cash flows...on our rentals...

So if market really tanks all over, i see this as a great opportunity to build some serious wealth instead .....

So to answer the original OP, nope i do not think i pick the worst time to retire, on the contrary  we sold our shares at the tippy top (dumb luck!) and at the present time, it is still half the price we sold at ...

Retirement is Sweet!

Dumb luck? It is quite the opposite. The S&P500 returned 27% in 2021, and is sitting at -13% for 2022. You have lost money keeping it on the sidelines.

Don't market time...

I agree!  Hindsight is beautiful isn't it? 

But what do they say? a 50% slide needs a 100% upside in order to catch up??

Anyway..just answering OP's question from my POV only:)

[BikeFanatic]

@wageslave23 that comment sounds like an attack to me, OP there is nothing wrong with being concerned and talking about it, Perhaps you object to the over the top language of being “the worst ever” year to retire. I personally retired in 2021 and don’t regret it, but of course I am concerned somewhat of the current situation but am not an alarmist.

I think you might be confusing me with someone else. My only comment was that I welcome the OP's word of caution and that others are free to ignore it.

Sorry about that @wageslave23 you are correctly correcting me!

I have changed the course and over corrected and retired, then unreturned, then retired again! I think it is ok to be nervous around retirement, and OMY syndrome. My back and forth story, I retired  in January 2021. I wanted to GTFO but I saw the crash in march 2020 and that made me nervous. I. stupidly converted 80 % to cash on December 2020 because of my pending retirement and Covid, and I planned on switching up my money from other brokers to Vanguard, and I also thought the markets had recovered enough,  and felt like I could not pull the plug unless I had my Fire number and then some. I also worked  part time at lower income job, and maintained some additional income with tradelines. I felt like I had to supplement my withdrawals as I was still concerned about the markets and wanted to decrease my withdrawal rate further “just in case”
Well over one year later, I changed the course again. I saw my mistake and lost a lot of money trying to time the market. I have put money back in, but still have a ways to go. Circumstances changed dramatically as I am now divorced, Covid was hard on my already rocky marriage. Anyhow, I have renewed faith in the markets, I am slowly re investing ( then I vow not to watch the markets and time them again),
I came  into some money from selling off my real estate at  a profit. Now being divorced I can control my spending and cut back as needed. I find I have the confidence to stop my part time gig and fully retire  in February this year.
I look at it this way, I have enough cash to at least take a year or two fully off, I have to trust the market to go up and down and just ride it out. I have social security eventually and still young enough to work part time again if needed. Moral of the story is just ride it out, have some cash cushion for peace of mind, and try not to micromanage time the markets. 2020 may not be the best year to retire but we may not know for a long time.

[vand]

For me the market correction is a bummer, but inflation is the real retirement killer (delayer) for my family. Having sold our house in 2020, and renting while we got our bearings in a new location, we are now facing a huge leap in housing costs, on the order of 20% of our total expenses. I hate having shitty timing, but this is the case. Hoping to be FI in 2022, we are looking at an additional 2-3 years. We've just put the pedal down, returning to dual incomes.

Life is still good.

This is correct, and is the big danger that wasn't present for the Y2K retiree case study.

It was recently revealed that as high an authority as Bill Bengen is currently of the view that the 4% rule might not hold up, and that we are in such uncharted waters that he is very clearly not following his own advice (he was 20% equities, 10% bonds, 70% cash!).

Lots of points to touch upon in this interview, but as well as high current CAPE valuations acting as headwind to SWRs, high currently inflation is also a headwind.

So put together today's environment of high stock prices, high bond prices, and high inflation, and things look very risky.

https://www.morningstar.com/podcasts/the-long-view/140

[EscapeVelocity2020]

For me the market correction is a bummer, but inflation is the real retirement killer (delayer) for my family. Having sold our house in 2020, and renting while we got our bearings in a new location, we are now facing a huge leap in housing costs, on the order of 20% of our total expenses. I hate having shitty timing, but this is the case. Hoping to be FI in 2022, we are looking at an additional 2-3 years. We've just put the pedal down, returning to dual incomes.

Life is still good.

Not sure if it will help, but you're hardly the only one in this boat - https://thefinancebuff.com/relocating-buy-or-rent-new-rules.html

By now it’s obvious I botched our relocation last year. The decision to relocate was correct but I executed it poorly due to my lack of experience. I also didn’t think through all the options when I only relied on some “rules” that were either outdated or didn’t apply to our situation. In the end, my poor execution cost us $300,000 $500,000 $700,000.

[dividendman]

I'm a serial FIREr... I guess that means I don't really FIRE? Dunno. I think it'll stick this time... First I FIRED in 2017 planning on not working again. Then I got lured back into work a year later. Then covid hit in 2020 when I planned to re-FIRE so I kept working since there wasn't much else to do. Then I FIRED *again* in the summer of 2021... then they lured me back for a few months and I FIRED (hopefully for the last time in) in Feb 2022... I really hope it sticks!

Is this the worst time? Who knows. But... am I missing something? Is the market even down 20%? Inflation is high but my personal spending is still lower than last year. I also have a mortgage at 2.8% which is a decent inflation hedge.

I guess I'm just not very worried. My life hasn't changed at all, in fact things are a lot better now that you can actually travel and do stuff. What's the worst case? I go back to work I guess.

The things that actually make me worry are: Nuclear war given the Ukraine situation, Roe being overturned, the environment going to hell.... yes... these are the worrying things. Not the market performance and inflation.

[wageslave23]

For me the market correction is a bummer, but inflation is the real retirement killer (delayer) for my family. Having sold our house in 2020, and renting while we got our bearings in a new location, we are now facing a huge leap in housing costs, on the order of 20% of our total expenses. I hate having shitty timing, but this is the case. Hoping to be FI in 2022, we are looking at an additional 2-3 years. We've just put the pedal down, returning to dual incomes.

Life is still good.

This is correct, and is the big danger that wasn't present for the Y2K retiree case study.

It was recently revealed that as high an authority as Bill Bengen is currently of the view that the 4% rule might not hold up, and that we are in such uncharted waters that he is very clearly not following his own advice (he was 20% equities, 10% bonds, 70% cash!).

Lots of points to touch upon in this interview, but as well as high current CAPE valuations acting as headwind to SWRs, high currently inflation is also a headwind.

So put together today's environment of high stock prices, high bond prices, and high inflation, and things look very risky.

https://www.morningstar.com/podcasts/the-long-view/140

Most people on here don't believe in CAPE. The market will just keep going up 20%+ every year :)

[KarefulKactus15]

In hindsight I certainly wish I would have taken out a big fat mortgage or 2 about 4-5 years ago.  Heck, even 3 years ago.  I woulda put 0% down or as little as possible anyway. 

I just thought.... It cant go up forever can it?  Well again, with all the inflation in hindsight I made the wrong choice.

[clifp]

With the market up two days in row and VTI only down 10.71% YTD, I want to protest the thread title, @vand
As a proud survivor of a class 2000, and your typical greedy boomer, there is no way, we are going to surrender our "worse retirement timing in 50 years" without a lot more market misery and higher inflation.  After all QQQ went from 93 to 23, the first two years of my retirement.

Come back and talk to me when a major index is down 50% :-)

[Telecaster]

I don't think anyone has the 4% rule tattooed on their forehead.  Everyone realizes, or should realize, some flexibility is in order.  I plan on retiring tomorrow if all goes well (yes literally).  I have the ability to easily do some reasonably well compensated part time work if I want/need to (I realize not everyone is in that position).  And I have some rent real estate income.   Steady, inflation adjusted income really helps portfolio survivability.  Then comes Social Security, which I'll take at 62 and my wife at 70.   If things go kinda okay we'll be more than fine.   A lot of people neglect SS for retirement planning purposes, which is not a bad idea.  But if you are over 50 it is safe to assume it will be there.  It is inflation adjusted income and it is enough that it moves the needle. 

My wife never has trusted the whole 4% rule talk, but we recently met with a financial advisor that her work paid for.  When he got to the "next steps" portion of the presentation he said "at this point I usually tell people you need to save more.  You guys should consider spending more."  At that point I got some buy in. 

[nereo]

Happy Retirement @Telecaster!

[maizefolk]

Wow, congratulations @Telecaster! I have to admit I'm curious what "if all goes well" is left when retirement is only 24 hours away. But go for it.

[EscapeVelocity2020]

With the market up two days in row and VTI only down 10.71% YTD, I want to protest the thread title, @vand
As a proud survivor of a class 2000, and your typical greedy boomer, there is no way, we are going to surrender our "worse retirement timing in 50 years" without a lot more market misery and higher inflation.  After all QQQ went from 93 to 23, the first two years of my retirement.

Come back and talk to me when a major index is down 50% :-)

Well, it's not out of the question given the latest...  Although the market was up for a couple days, the overall trend still seems to be down down down...

[shureShote]

With the market up two days in row and VTI only down 10.71% YTD, I want to protest the thread title, @vand
As a proud survivor of a class 2000, and your typical greedy boomer, there is no way, we are going to surrender our "worse retirement timing in 50 years" without a lot more market misery and higher inflation.  After all QQQ went from 93 to 23, the first two years of my retirement.

Come back and talk to me when a major index is down 50% :-)

Well, it's not out of the question given the latest...  Although the market was up for a couple days, the overall trend still seems to be down down down...

Certainly quite the rollercoaster. Will be interesting to check back in in 10 years and be able to evaluate things a bit better.

One good thing about these short term wild swings is it allows to see where your plan may have some limits.

[GuitarStv]

I don't think anyone has the 4% rule tattooed on their forehead.

I do.

[Telecaster]

Wow, congratulations @Telecaster! I have to admit I'm curious what "if all goes well" is left when retirement is only 24 hours away. But go for it.

Thanks man!  I'm self-employed and I have one last work project I'm finishing up.  Should be done today, but might be done tomorrow. 

[shureShote]

I don't think anyone has the 4% rule tattooed on their forehead.

I do.

I see Covid has kept you out of the hair salon.

[evme]

As @clifp mentioned, things haven't even been that bad. The S&P 500 is, what, 15% or so off it's peak? So no it's not the worst time to retire. Things could still get worse of course. As someone who hopes to FIRE in about 2 years I look at this as a time to scoop up even more equities.

[shureShote]

As @clifp mentioned, things haven't even been that bad. The S&P 500 is, what, 15% or so off it's peak? So no it's not the worst time to retire. Things could still get worse of course. As someone who hopes to FIRE in about 2 years I look at this as a time to scoop up even more equities.

Yeah, I would think (hope?) that someone who is right on the brink of retiring would run some additional calculations and check what should be a solid plan. If it just feels a bit too uncomfortable, maybe delay a few months or tweak the plan (nope, not buying the RV the day after I retire...)

And I agree, getting what should be a normal blip on the long range upward trend a couple years out feels somewhat good right now getting to get some more equities at prices from 2020 (ish).

[Goatee Joe]

Don't know if it was the "worst" time for them to retire, but in hindsight their timing wasn't great.  Personally, I'm enjoying still working and having the lucky opportunity to watch my 401k contributions and stock index fund purchases gobble up increasing more shares at increasingly cheaper prices, knowing that I won't need that money back in cash until some distant point in the future.

[shureShote]

Don't know if it was the "worst" time for them to retire, but in hindsight their timing wasn't great.  Personally, I'm enjoying still working and having the lucky opportunity to watch my 401k contributions and stock index fund purchases gobble up increasing more shares at increasingly cheaper prices, knowing that I won't need that money back in cash until some distant point in the future.

Yeah, your post made me reflect on the shares I purchased in 99 and 00, and all of them from 06 to the start of the GFC. All have made quite a good return. Makes me think about the shares I bought all through 2021, including the six figure purchase of VTSAX in December. As you said, I don’t expect to need money back from them until maybe 20 years from now. No reason to expect I won’t be pretty happy with the ending result.

[vand]

With the market up two days in row and VTI only down 10.71% YTD, I want to protest the thread title, @vand
As a proud survivor of a class 2000, and your typical greedy boomer, there is no way, we are going to surrender our "worse retirement timing in 50 years" without a lot more market misery and higher inflation.  After all QQQ went from 93 to 23, the first two years of my retirement.

Come back and talk to me when a major index is down 50% :-)

Long duration bonds are now down 50% in real terms, and the Fed is only 2 months into its rate tightening cycle...

IMO, given their starting point, there is a very reasonable chance we'll see the greatest ever bond bear market unfold in long dated Treasuries - it wouldn't even take interest rates to go that high by historical terms for us to exceed the -70% or so drawdown we got in the decades between WWII - 1981.

At the moment the damage is mostly in long term treasuries due to their long duration making them more sensitive to interest rate changes, but the longer the current macroeconomic conditions persist, the more this loss of purchasing power will spread to intermediate and short term treasuries by way of inflation risk.

[clifp]

50% really? I'm looking at TLT being down 20% YTD, and not even that much over the year.  I suppose if you add inflation you could say 30%.

I do agree the worse pain is yet to come.

I'm pretty sure you and I are the two biggest bond bears on the forum.  (In my case I have the stomach to prove it.)

[eyesonthehorizon]

I guess I'm unclear about who we are talking about in this thread vs who the great resignation consisted of.

This thread seems to concern full FIRE people thinking they were done forever. I wonder how many of the GR were people who had had enough for right now - and had enough squirreled away or other resources enabling them to step away for a time.

While the job market is still great for the job seekers - how long that may last if a lot of these folks go back to work remains to be seen, something to consider for anyone who may be wanting a change and hasn't put themselves out there yet....

@mistymoney, how does locking in cheap debt help?  I have been thinking about it, essentially to defer withdrawals for a few years, but I am not sure my thinking is right.

I'm not Misty Money but I assume they mean something like getting a low interest fixed rate HELOC or equity home loan or do a cash out refinance if you have a house. Or some kind of fixed rate low interest personal loan or even CC account balance loan (still lots of 0% CC offers with low fees - 2% or 3% -  out there that are good for 18 month to 2 years) that you can tap if needed. For example before I FIREd I took out a $75k HELOC on my paid off house (worth much much more). There were no fees at all and I only had to make small 1% monthly payments on any balance I had used. Since it was basicly to be used as a second emergency fund besides my "cash" (bonds and laddered CDs) emergency fund I never really touched it so didn't cost me anything. I had a 5 year draw period and an additional 15 year pay back period. I closed it after 5 years but was nice to know it was available after I quit my job just in case SHTF in the stock market (and it did but I didn't need to use the HELOC).

As for me personally I had a paid off house I planned to sell and downsize from, no debt, low cost lifestyle, a small future pension (Approx 15 years from my orginal FIRE date) and low cost medical, single (a mixed blessing as no back up partner who's income can help if you lose your stash but also no one to support or who spends too much if they lose their stash) and childless so FIREing on a much lower stash then most have here was easy. However the ability to be financially flexible and live on less during lean times is really not a bad thing.

Yep, I was the one who mentioned good odds of recent FIREees locking in cheap debt. Just as Spartana says, either a HELOC, refinance, or first mortgage, potentially other loans so long as rates were favorable & they don't represent additional consumption. One thing that has stuck out to me is that with so many red-hot real estate markets nationwide, mortgagees who finished a purchase or refi before this run of inflation generally got in at historical low mortgage interest rates, often below historical inflation. This means they locked in their housing costs at pandemic-year prices ahead of housing inflation. As long as they hadn't overbought for their needs, that could represent a big deferral of current withdrawal/ spending into the future - though whether that's good depends on what a dollar can buy in 2030-2050, technically unknowable, but all FIRE strategies are based on best guesses.

I imagine this occurred to a good proportion of '21-'22 FIREees, since in the lead up to their resignation they were combing their budgets with the diligence of anyone about to kiss regular paychecks goodbye, & aware they probably wouldn't be able to refinance or borrow easily once they gave up the reportable income, so those who saw borrowing as favorable in their situation likely did.

[Dicey]

DH and I were just lamenting that perhaps we should have taken out a mortgage on our primary before he retired. Then we figured we just would have thrown it in the market, so it's probably a wash. We did re-fi two of our rentals at what turned our to be a very good time, so it's just going to be whatever it's going to be. More MPP's for sure.

[eyesonthehorizon]

DH and I were just lamenting that perhaps we should have taken out a mortgage on our primary before he retired. Then we figured we just would have thrown it in the market, so it's probably a wash. We did re-fi two of our rentals at what turned our to be a very good time, so it's just going to be whatever it's going to be. More MPP's for sure.

Fantastic problems to have, right?

[Dicey]

DH and I were just lamenting that perhaps we should have taken out a mortgage on our primary before he retired. Then we figured we just would have thrown it in the market, so it's probably a wash. We did re-fi two of our rentals at what turned our to be a very good time, so it's just going to be whatever it's going to be. More MPP's for sure.

Fantastic problems to have, right?

Pretty sure that's the case for all MPP's, right?

[Jacinle]

For me the market correction is a bummer, but inflation is the real retirement killer (delayer) for my family. Having sold our house in 2020, and renting while we got our bearings in a new location, we are now facing a huge leap in housing costs, on the order of 20% of our total expenses. I hate having shitty timing, but this is the case. Hoping to be FI in 2022, we are looking at an additional 2-3 years. We've just put the pedal down, returning to dual incomes.

Life is still good.

I am on exactly the same boat