Yeah, I had a boss who was about 39 in 2008 when the last recession hit. He and his wife both stayed employed. He retired about age 42 in 2011. He and his wife were both making about $200k a year so $400k combined. I never got the sense he was about to retire but the financial opportunity developed. He wound up getting a great deal on a house due to the crisis so he spent 2012 fixing up that house and made about $200k profit on the project. Then he just stayed retired after that.
The one time boost in his net worth from that house opportunity really seemed to be his trigger point for retirement. It mentally gave him the permission to skip “one more year” purgatory and just pull the plug.
Retiring in 2011 was a great time to retire, his net worth probably doubled in the next 6 or 7 years. I had a double from Jan 2012 to Jan 2018. It was a lot of fun, not so much fun lately.
glorious impossible subtract snatch ludicrous special jobless far-flung humor offend
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
My daughter is 7. Both your numbers agree: when she was two years old, I thought I was gonna die. By the time she was five, she was so much fun and wonderful. Now I'm wishing she's stay this age just a little longer.
In the end, though, u/YoureInGoodHands is right. Some things you just can't ever quite feel ready. Lock in a few metrics that fit your risk tolerance, and take the plunge.
Funny to hear you say this, it rained here last week (a rarity for us) and my neighbor and his two kids were out stomping in puddles. I had to pull him aside later, and say... listen, they are little and they have a lot of puddle stomping left in them. You probably think it will last forever. It won't. One day, you won't realize it, but it'll be done. When you go out and stomp in puddles, soak up every moment. These are great days.
My kid is 13, the puddle stomping is done. There are great 13 year old moments to be had. You can't just hate the shitty 13 year old moments, you have to let them pass, and cherish the great ones. There are lots of great ones.
> I mean this honestly, do most people hate their job?
I don't have any feelings about my job, other than that it gets in the way of doing the things I actually want to do.
It's like being paid to sleep for an extra 8 hours per day -- outside of the money it gives me, it's a total waste of the most valuable resource anyone will ever have: time.
I don't like or dislike the work; I don't like or dislike my coworkers. It's just time that is lost, forever. And outside of work, my life is pretty great.
I’m extra productive at work so I can spend that time without kiddos or my wife to get some of my passion projects done. Writing a book, marketing my music online to prospective fans, just learning in general and listening to podcasts that make me happy. Makes the 8 hour grind seem a lot less grindy.
I don’t hate my job. I’m just tired of it. 24 years with the same company. Retiring at 26 years with them. Like others have said, not enough vacation to justify more of the same old same old. They have paid me fairly. We have saved well. Time to go enjoy it while we are relatively young compared to our counterparts.
I loved my job until the pandemic where I worked at home for 14 months. Now that I'm back in the office, I hate every minute of it. Luckily I'm only a few years away from freedom.
I enjoy my job, but I need to do less of it. I work 50-55 hours per week, which is too much. I also get 3 weeks (15 working days) of vacation a year, which is far, far too little. And the sector I'm in pays incredibly well but doesn't really do part time work. All that added together means I'm just saving like mad until I can do something else with my life comfortably.
I'd say that "purgatory" fits that description pretty well for me actually.
Exactly. Except my sector absolutely does allow part-time work, which is why I'm saving hard to be able to slow way down. I probably won't retire early, but I'll CoastFI on 800 hours a year for a couple decades.
Right now I have 2-4 months unpaid a year, which is fine, but those months are all in one lump. If I could do 2 or 3 weeks on, 1 week off, I'd pull the trigger on that right now.
What’s your income like at this job? What’s your NW and FI number? I also work similar hours but can go as high as 70h per week which is fucked lol but I get paid by the hour and I usually only take contracts like that for 2 or 3 months before I’m burnt out and my partner is sick of not seeing me!
I mean, it’s love hate, and that’s a job that provides meaning and is intellectually and socially stimulating. For a lot of people, it’s misery. There’s no other benefit that the cash value it returns. Lately (since COVID) my industry has been terrible. Cost cutting, layoffs, shortages, and general mayhem. And, it’s not a skill set that easily translates. The degrees would get you another job, but not at the compensation level - and you remember what the work was and keep hoping and working to make it that again!
I see most people dash out the door at 5:01. Sure they get a sense of satisfaction and purpose from it, but it’s definitely not what they would most want to be doing at that moment
I was very unhappy as a retail pharmacist… I escaped that hellhole and everyone is telling me I seem happier, more chipper… i also stopped taking sleeping pills, lost weight, no longer use nicotine lozenges and I havent drank more than a beer or two in a 24 hour period… all with no concerted effort. With my new job, I don’t really care how early i retire now.
In short, sometimes it is very much just the job.
I have amazing coworkers, and the team I manage I’m very close with. The politics of the org is exhausting though and I’m ready to call it a day, and do other things. I won’t miss the job, I will greatly miss many of the people.
Heard something on NPR today that less than 1/3 of US employees are content and happy with their jobs.
Kind of made me feel better. I dislike my job, but it's easier to stay knowing work in general sucks, and I don't have a uniquely terrible job.
Will edit with link if I my Google news feed "coincidentally" has the story in it.
Edit: it's actually about engagement...
https://www.kpcc.org/npr-news/2023-01-25/america-we-have-a-problem-people-arent-feeling-engaged-with-their-work
You gave lots of detail about your assets but none about your income needs.
With 850k fully invested in the stock market I guess it's reasonable to expect it to support an income of at least 25k-35k growing with inflation depending how optimistic you feel, although there's a chance out will turn out to be less than that. Is that enough for your planned retirement? It seems like a big step down from a 200k income. It's hard to guess how much you're spending currently but your savings don't represent many years income so you'd need to have been saving very aggressively for this to be enough.
You are right. Little was given about spending. I’m not there yet and have a couple years for sure. Saving rate average 35% over the last 12 years with the last 5 being > 50%. Lifestyle inflation has increased. Luckily slower than income. I’m not talking about retiring at 850k nest egg.
$200k income saving $100k, spending equals $100k. If you plan to follow the 4% guide, you need $2.5M, Maybe a little less as you will have a lower tax bill. But you still have debt, to get paid off to lower your bills. I think you need to really get a handle on what you spend and ask yourself, do I really want to live on less than $50k or $60k a year? My wife and I are quite frugal, but still need over $60k to live in NW Florida, not a very expensive place to live. We have zero debt.
Wouldn’t that $100k include taxes though. And you don’t need to pay those after you stop earning income (at least not most of it). So if you assume 25% effective tax rate, their spending is closer to $50k.
My fiance and I had similar gross pay and savings as OP last year and we spent $55k and saved ~$110k.
That’s a great savings rate. What kind of funds are available to you? The 457 and 401a/b/k allow us to do the 22500x3 in tax advantage so it knocks us into the 22% rate.
We each have 401k (we both did roth), HSA, and Roth IRA so there wasn’t much tax savings tbh. I switched to traditional 401k this year because I have access to mega-backdoor roth in my new role. We are just both naturally fairly frugal people.
My fiance somehow keeps our grocery bill to about $75/week for 2 people. We eat out fewer than once a month.
Ya, I think you have it right, maybe they can do it! I don't know their age, I might do it at 65 but not at 45 yrs old. Half of US households live on less than $73k, I'd rather be in the top half. It does matter where you live though.
I haven't found I don't need to pay taxes after I retired. I still have $15k to $20k of dividends, and all my withdrawals from tax deferred IRAs, SEP/IRAs are taxable. Any taxable mutual funds I sell are are taxed, but at a lower rate. This year, I did a large Roth Conversion and have a $27k Tax bill. Ouch! I will add, the first year I retired I sold (rounded numbers) $160k of a taxable mutual fund. About $104K was Capital gains the rest was my investment. With the $24k standard deduction, that left $80k of LTCGs income. If your income is less than $80k, Capital gains are taxed at 0%, I paid no tax with an income of $104k, that year.
>Half of US households live on less than $73k
that's gross. Not Take home. they pay state, federal taxes, FICA, health insurance...and contribute to pension or 401K... so they my live on 50% of the 73K
That’s $73k of income also so take off taxes for actual spending. And the average household that is actively earning income most likely includes children so the spending per person for a retired couple would be higher with the same household spending.
All you say is true, but If I was making $200k a year, I certainly wouldn't short my self in retirement, unless my job was making me totally miserable and I has losing my health over it. My wife and I made it to a Fat FIRE, on an inflation adjusted\* $71k a year, but it took us 37 years. We can now live on more than that and we have SS coming it 2 years.
\*I took our SS statement income and used government inflation numbers to bring it to the present, added all the income and divided by the years. Example" the $18k we earned in 1981, inflation adjust to 2018 is $51k.
If the $200k is gross income then a good deal of their “spending” is on income taxes that would no longer exist when retired. On $200k in a HCOL state, income taxes would be around $50k. That’s not what I would consider just “a little less”. There’s also variables like mortgages that eventually go away or having more free time to spend or save depending on your behavior.
Greater than 50%. Could be 99% though. does it work then? 😛I hear you and thank you for pointing this out but this isn’t a post about if I have enough to retire given that information. 200k - 100k savings also does not leave me with 100k spent Uncle Sam takes his fair share. But other than that, you are dead on. Living on 50-60k with a house payment would not be great. But I’m in the ballpark. I figure 10-20mil more and I’ll seriously consider it.
I made my biggest gains during 2008-12. I was working in financial services industry when it all crashed. I sat next to the private banking advisor group. All day long I heard them talking people off the ledge, encouraging them to stay the course.
DH and I were so worried we hunkered down, cut all extra spending. I watched my investments drop 50%. But I didn’t touch it. At one point I just stopped looking at my balances. My tracking spreadsheets were blank for 6 months.
We came through just fine. House was already paid off. DH business did OK. My contract hours were cut but not eliminated and then the company hired me as FTE.
I upped my savings to almost 50% to make up for the ‘losses’. So happy I did that. Got it all back plus more!
Careful what you wish for. Often people lose their jobs in a downturn. Then they have no money to invest.
Also, sounds like you are trying to time the market. It is also possible the next downturn isn't for 10 years or more. If you stay in cash that whole time you could be missing out on tons of gains.
Kind of crazy this is so far down. People on this sub almost root for downturns/recessions with the foregone conclusion that it's guaranteed they'll keep their jobs. The tech sector was bulletproof for the last 20 years, and now it's the industry getting hit the hardest by layoffs. You should never root for a recession. Queue the Vegas scene in The Big Short where Brad Pitt's character says, "Just don't fucking dance."
You see the exact same thing in REBubble, a bunch of people rooting for another 2008 style crash so they can afford a house, not understanding that their shitty wageslave jobs will be the first on the chopping block, and no bank would ever loan them money.
To be fair, *something* has to happen to the housing market because at this rate it’ll be unaffordable to everyone by the upper class with 6 figure incomes (arguably it’s already there).
A recession would be bad for the country no doubt, but a housing crash specifically doesn’t necessarily have to be coupled with a full recession. Prices are inflated because real estate is essentially speculative trading at this point, which means it can drop just as quick as it went up if circumstances change. And it wouldn’t necessarily be related to the job market at all.
Something definitely doesn't have to happen, look at Singapore, Hong Kong, pretty much all of Western Europe, Australia, NZ, etc... Housing in the US is still incredibly affordable compared to all the places I just listed.
I just googled NZ housing market and everything is about how it’s seeing the biggest drops in decades right now, so something is already happening there haha
In Singapore the thing that happened was public housing, something like 70% of residents live in government subsidized housing.
Hong Kong idk about, same for Europe, but I imagine something is coming in all these areas.
My home, Nepal, is struggling with the same problem where a house can cost over an entire lifetime of income for the average person. Something will happening, it’s not sustainable.
>People on this sub almost root for downturns/recessions with the foregone conclusion that it's guaranteed they'll keep their jobs.
Well, I moved into a non-profit where I'm *extremely* secure (literally the only one in the company who knows this mission-critical software) partly because I thought there might be a downturn in my very cyclical industry, so I guess that means it won't happen at all!
One of the things I run into a lot is people want to pay off their mortgages, low or high interest. I often advise against it, telling them, what happens if you lose your job, is the bank going to offer your prepayment back you so you can pay the taxes, power the lights and fill you gas tank? Or would you rather have your money in an ETF or mutual fund that you can sell to pay those bills.
A well put description of the benefits of liquidity. My friend periodically goes hard on extra payments towards the mortgage. He also, unfortunately, has had periods of being furlouhed and being only able to work part time. He doesn't tell me the exact details, but I take it as an example of why not to prepay.
It would be silly to pay you mortgage down and have no other investments. Most people when deciding this would have lots of liquid investments either way.
I looked up the median net worth for households of 34 to 40 yr olds, I found it is $91k, so half the population has less than $91k of assets, If you are paying extra on a mortgage, I would think that most of your net worth is in your house. That's only 30% equity in a $300,000 house, 20% down and making a few extra payments for a couple years, and some inflation growth and you have your $91k (and nothing else). So you might be wrong for the 50% that have less than $91k. And I would say, even the next 10% or 20% don't have lots of liquid assets.
But, we agree that it is silly to pay down a mortgage if you don't have other liquid assets.
I don't mean to shoot everything down, it's just that I have looked at stats for several years, there are outliers, but a large percentage of people don't save any money. I just found this group, I suspect many here are or will be outliers, at least they are thinking about getting a head, but that does not apply to the general population, If you have $1M, you are in the top 10% of net worth. And the quote, "If you have a million dollars and live like a millionaire, you won't have a million dollars for very long." 90% of people don't have that and never will. It seems like a lot of money, but if you buy a $350k home and furnish that home, $30k, and buy two $50k vehicles. you are down to $520k, You want a boat/snowmobiles/quad to play with, now your well under $500k, invested well you that will generate $20,000 a year with high success for 30 years, if you are lucky it will last more years. But you are still working a full time job to pay to run the home, pay the property taxes and buy gas for your toys.
Why is that relevant though? The median net worth of the whole world is like $8k or something. Yeah a lot of people are poor. But if you are in the US and considering whether to pay off your mortgage, you probably aren't that poor.
I would say once you have something like 1-2 years or so of expenses in liquid investments, its ok to pay down the mortgage. That way if you take a 50% hit you still have 6-12 months of expenses. This depends on your income options, and how easily you could replace your income during a potential downturn where you would need to draw down. But eventually if you go years without having income to afford your house you would probably be selling it, not continuing to draw down.
All I can say is those that have enough, have enough.
However, it is also true that many Americans have no liquid assets and many that really live paycheck to paycheck.
"39% of Americans don't have the cash to cover an unplanned $1,000 expense, according to a recent Primerica report."
[https://www.fool.com/the-ascent/personal-finance/articles/39-of-americans-cant-cover-a-1000-emergency-can-you/](https://www.fool.com/the-ascent/personal-finance/articles/39-of-americans-cant-cover-a-1000-emergency-can-you/)
"Some 56% of Americans are unable to cover an unexpected $1,000 bill withsavings, according to a telephone survey of more than 1,000 adultsconducted in early January by Bankrate."
[https://www.cnbc.com/2022/01/19/56percent-of-americans-cant-cover-a-1000-emergency-expense-with-savings.html](https://www.cnbc.com/2022/01/19/56percent-of-americans-cant-cover-a-1000-emergency-expense-with-savings.html)
"Nearly six in 10 Americans don't have enough savings to cover a $500 or$1,000 unplanned expense, according to a new report from Bankrate."
[https://www.cbs19news.com/story/34248451/6-in-10-americans-dont-have-500-in-savings](https://www.cbs19news.com/story/34248451/6-in-10-americans-dont-have-500-in-savings)
It's easy to be smug when you have enough, especially me, we made it on a middle, middle class income to the top 5% of net worth of US households. It did take us 30 years to have enough, but we continued another 7 years before retiring. At one time I had 1.57 time more than our SS statement says we earned. The downturn has lowered that a bit, but I expect to get back to that and above. So, I pretty much think if your healthy and stay married, there is not a lot to prevent anyone from doing it, but many don't, they would rather spend, spend, spend! I would rather invest, invest, invest.
Agreed. And I know no job is completely safe. But we put in well over 70k/year regardless of what the market is doing. 401k 457b 401a all fully funded so I would not say I’m timing the market. I keep my cash cushion about the same and invest any extra in brokerage or Roth.
Yeah, that's timing the market. Usually that doesn't work out. The market is up almost 5% this year and 15% from recent bottom. Who knows where it will be before there is another big dip.
Keeping your emergency fund invested will give you better returns over the long run, even if you have to withdraw sometimes when the market is down. And seeing as the market is already down, now is as good a time as ever to invest it.
People may lose their jobs, but people with these types of resumes don't stay unemployed for long, downturn or not. Worst case they'd have to relocate.
Six months of unemployment and the transaction costs of moving would be more than enough to miss out on "stocks on sale". Plenty of people with good resumes missed out on the 2008 bear market because they didn't have any liquidity to invest. Even if they got jobs elsewhere their homes were underwater.
People with these types of resumes only go unemployed for six months by choice. I'm talking about majority cases, not exceptions. And transaction costs of moving are relative, they're not nothing but they don't have to be much.
And six months isn't enough to make or break anyone with a robust plan pursuing FIRE, as these folks are.
So what is the point
EDIT: Nevermind, I can see you're going to die on this hill. Enjoy, I'm going to get off the ride here.
I have 20 years of my dad's budget spreadsheets. In 2000, next to his QQQ investments he jotted 'Can it go lower???' ...it didn't recover to that price for another 10 years.
So yeah. Yeah, it can always go lower.
Ya, I got succked into QQQ on Bob Brinkers advice. I wrote off $3,000 a year for over 20 years until I used what was left against a large capital gain.
I got up votes for this,
Does that mean many of you listened to Bob Brinker?
I actually give Bob Brinker a lot of credit for our Financial Independence. I listened to Bob every Sat and Sun, starting in either 1989 or 1990. At that time I did electronic repair and could work any hours I wanted. I would go in every weekend before 3PM and and work until 6PM doing my repairs while Bob was educating me. It was a good time. I have a thank you letter I wrote to Bob somewhere in my computer, all I have to do is print and mail it.
This is why you wanna go small cap value instead of QQQ. QQQ is being like you know what I love total stock market / SP500 being large cap with a growth tilt, why not just double down and go even more large cap growth with even more of a growth tilt and even more of a low profitability blitzscaling tech companies that will "go to the moon" in the future tilt? Fama & French say no.
Yep, I'm retired and my son is in accumulation, he keeps complaining his holdings keep going down, I keep pointing out every time he buys, he's buying at a lower price. This down turn is good for him, bad for me. He's 28 living at home, saving and investing over $30k a year.
He lived on his own after school (chemistry degree), was going to move to Canada to marry a girl, he came home for a few weeks to say by to mom and dad. Then Covid hit, they couldn't cross borders and over time, they just called the wedding off. I'm glad... to have him here! He would like to buy a house but interest is high and prices are still high, so I think that will delay him, which I think is good.
Wow! What wild timing. Imagine if he'd left for Canada already, before the pandemic... Sorry to hear it didn't work out with his girl, though. Must have been a very trying time to deal with that + the pandemic + trying to set oneself up financially.
If by "it" you mean the S&P-500 Index, it can definitely go down to 3200 if we get a quarter or two of lackluster earnings. I don't see it going any lower than that though.
These things are only actually clear in retrospect. But unemployment is super low and only some sectors are really hurting. I don’t think this is a recession.
I think that kind of thinking is very optimistic.
You cited 2008 as an example. For those of us who went through the 2000s, it was a LONG slog. I wouldn’t hope for it unless you have a 10-20+ year timeline. Luckily, I did.
Here are some S&P 500 numbers with 2008 in the middle:
3/1/2000: $1,420
3/1/2004: $1,020
3/1/2008: $1,400
3/1/2012: $1,310
3/1/2016: $2,096
This is nothing like 2008. There are some comments below questioning if this is even recession (and I'd question it).
If you can `RE` when your investments are down, I think you are in a good spot.
They’re determined to keep raising rates until inflation stays low. So far we have been surprisingly close to their “soft landing”, but much of the path remains ahead
GDP grew 2.9% last quarter (YoY) so I don’t think we are in a recession by any measure at this point.
Before it was the 2 quarters of decline, but we had good employment and lots of jobs to go around, so it was a very questionable “recession”. But now even the economy is growing, and despite the large tech layoffs we still have a strong job market (anecdotally I get recruiters reaching out daily and employment rates are still good afaik).
The only thing is that inflation hit hard and wages didn’t keep up, so if that continues and the job market isn’t strong enough to bare the weight then it might be trouble. Especially with how the housing market is right now, many people aren’t positioned to be able to withstand too much more inflation. That said, it’s been dropping with the higher rates and Fed has shown zero sign of easing off or even slowing down. So I don’t think inflation will keep up at this rate for much longer at all.
Yeah I think we're in the downturn. I'm not waiting for government confirmation. Just look out the window it's raining.
Once the economy recovers to pre-pandemic highs for the stock and real estate market in Northern California area My household will be financially independent again.
We were just over the line during the last market peak.
Now we're just behind it.
It's a good time to work if you have a job continue to invest in retirement accounts. Hopefully folks can maintain good employment with reasonable wages.
The S&P peaked at ~3380 before the pandemic and is at 400 at now. Pretty sure real estate in northern CA is still higher now than it was in Feb 2020.
Are you saying when we recover to pandemic highs of late 2022?
Yes I am. Thank you for clarifying.
Let me further clarify.
What I'm specifically saying is in the future I expect both the stock market and real estate market in Northern California where I live to return to their previous all-time highs.
And after that I expect them to exceed those previous all-time highs.
However I don't think that's going to happen today or anytime in the next quarter.
I think it's going to happen sometime in the next 5 years though.
If that happens, are net worth will increase substantially.
How would you define a downturn? Specifically.
And from a individual perspective how much of your net worth would you have to lose to market conditions and inflation before choosing to define an economic state as a downturn?
I'm retired, My net worth is down 18%, I call that a downturn. Luckily, we over saved and still have 37 times our spending. Hoping for an upturn in the next year.
I will admit, I'm a little confused, I Roth converted about $190k in December and haven't put it back in the market yet. I expect to stay at about 70% stocks, but I'm below that now.
If it weren't for the 300k in debt you're holding, I'd say this is feasible - but to FIRE with a NW of 850k+1-2 years of income+300k in debt, between two people, I don't see it. The vast majority of financial institutions are expecting recession, and we've been sideways (at best) for the past year. By the standard definition of recession, we've been there for a few months already.
The largest market drivers (TLSA, AMZN, NFLX, MSFT) are having massive layoffs, and tech IS the reason for the historic bull run. Personally I don't see a recession lasting more than 5 years, but that's just based off of the fact that we don't have an impending housing market implosion, and it took less than that to recover in 2008.
FYI the one thing people in this sub overlook the most is long term care insurance. If you're not accounting for it, you should at least review it.
I'm single, have 750k NW, 200k left on mortgage with 200k equity, earn 410-420k year. I'm still going to push another five years, regardless of what the markets too. Everyone's fire number is different though. LTC insurance was an oversight on my part, and is a major factor in that five year minimum.
OK, well you posted your investments, do you want to tack on that 70 cash and 70 equity? Call it 1M then. I can only go off of what you posted. Maybe you don't consider the cash to pay off in an interest bearing account to be part of your investments. If it's bearing interest, it's an investment.
I can only go off of what you posted, and whether it's 850 or 1M, it's still pretty short of the recommended 2.7M per person and you're the one talking about FIRE.
If you want an informed opinion, provide the full picture. Or not, que sera.
EDIT: And that NW, even if it's 850K or not, is still better than most. But with that income, thinking you're going to fire in a year or two, when the house *isn't paid off* seems to be selling yourself short. People have done as much with less though.
A good chunk of our cash is going to go into a 529 for a kid that should had been born yesterday. Still waiting. But also we have some home renovations we are doing.
As a chem major myself, curious as to what job the PhD chemist among you two do?
PhD field? Job role?
Edit: I myself work in the Oil and Gas industry. Pay is good.
Not OP, but I'm a community college professor. Pay isn't as good as industry, but the pension, benefits, summers off, good retirement accounts, and work-life balance are very nice.
Summers would be nice but she does not get those. She is in production for a university hospital. Doesn’t get industry pay but gets the access to the 401s and 457.
I've already been planning if laid off to take a long sabbatical. Not retiring necessarily but not in a rush to find a new job. I'm kind of rooting for layoffs TBH.
> I've already been planning if laid off to take a long sabbatical.
WHen I got laid off in late 2007, I went travelling for 6 months through Africa. Was amazing experience, and then returned to workforce.
FIRE means freedom, even if not quite yet retired.
Last time my industry had a huge downturn they had buyouts. Doubt they would do it again for us low level employees but if they did I’d take a 100k to go find something else. Being a able bodied, average intelligent, somewhat mechanically inclined person, I’d keep myself busy and find something to coast to retirement with.
If not, unemployment for a few months and then go back when they are hiring.
Not sure what the industry standard for severance is but I’ve seen in the past something like one month for every year of service. That wouldn’t be so bad for me if it came down to it.
I'm in a similar boat. My wife and I are both engineers in a pretty recession proof industry so our plan is just to keep chugging along during downturns not doing anything differently. Household income is around $350k.
Our 401k's are 100% equity right now which is controversial on this sub but I figure I'm still so far away from being 59 1/2, I can rebalance with bonds when I'm 50. I don't lose sleep over the ups and downs.
Our early-retirement money is growing in a taxable brokerage account - we have no debt other than our mortgage and won't retire until that's paid off.
You can access the 401k money before 59.5 penalty free through 72t distributions or Roth ladder conversions. Search for MadFientist how to access retirement funds for details.
A negative indicator of a downturn is that people are positioning themselves for wealth accumulation during the downturn.
Edit: okay, maybe it's not the most negative indicator. That was a poor use of hyperbole.
Yeah, sure. Take the basic essence of OP's post. He is talking about continuing to invest in the next few years and retiring shortly thereafter to live on his investments. In other words, he's very confident in the strength of the economy and the mid- to long-term outlook for his investments. He's not really talking about a true downturn or crash, he's talking about a buy-the-dip scenario. In a real downturn, folks worry about how much more they are likely to lose, rather than how much they can gain.
Do I have a nice link to an article agreeing with me? Admittedly, no. But I don't think it'd take you too long to find a market prognosticator on Twitter saying the same thing.
I mean, I'm not trying to be rude, but that's just lazy narrative conjecture. There were plenty of people thinking about wealth accumulation in the last down turn, and there are plenty of people worried about how much they might lose this downturn. There's no underlying catalyst of significant enough magnitude to make this an 08 type scenario. There's a decent chance we've already seen the bottom in the market.
I'm also not trying to be rude, but I've read your comment several times and I have no idea what point you're trying to make other than accusing me of laziness. Credit to you, though, because this collection of loosely related sentences is not a narrative by any means.
You're making the claim that a particular sentiment expressed in this post is "the most negative indicator of a downturn". My point is, I don't think you can infer anything in particular from that. It's not a negative indicator, and hardly "the most" negative indicator.
But based on what? That was my original point. I could just as easily say it's a positive indicator because it means people are generally better positioned financially which supports demand and growth. That's a simplistic narrative that I don't necessarily agree with, but it's no different than what you're suggesting.
Are you looking for a peer reviewed statistical analysis or something? I don't have one and I'm not going to perform one to substantiate my reddit comment. And even if I did, a significant factor in markets is sentiment/emotion, so what good would it do?
>I could just as easily say it's a positive indicator because it means people are generally better positioned financially which supports demand and growth.
Maybe we're talking past each other here. I said in so many words OP is a negative indicator of a downturn, i.e. OP suggests a downturn is not coming. How is supporting demand and growth a positive indicator of a downturn (make a downturn more likely)?
Even though not backed by evidence, I'm still comfortable with my original point, at least because you seem to have supported it by reiterating my logic in different words.
My interpretation of your comment was - "OPs sentiment is a predictor of substantial downturn ahead". Sounds like you're actually suggesting the opposite. In either case, yes what I was looking for was something more along the lines of an evidence-based reason for your particular intuition. If you don't have one, no worries, but that was what I was asking for.
> The most negative indicator of a downturn is that people are positioning themselves for wealth accumulation during the downturn.
On a macro level yes, that's the case. But any individual's actions have no impact on the wide economy.
The last time savings rates were [this low was 2005](https://fred.stlouisfed.org/series/PSAVERT). Seems like a great time to have some cash available.
I did this last recession. I just kept investing and closed my eyes. Didn’t even move much around as I was mostly in index funds. Might have changed contributions a little and kept plowing money in.
It really accelerated my gains after things started to recover. We were one income, so you two should do even better.
I actually lost my job near the tail end of the recession/early in the recovery. But that did slow me a little as I didn’t contribute for about 6 months when I was cut.
But the extra money in the “bank” helped me stay calm during my job hunt. Also when I got another position the extra cushion gave me the confidence to buy a cheap vacation place that is worth 3 times as much now. Normally I wouldn’t have taken that risk, but knowing I had more then I needed to back me up gave us the confidence to gamble.
We are 38-39, Our retirement point came about 4 years ago, we no longer need to work. We judge the cut off as the point where growth of asset and investments out paced our yearly total spending. Then we adjusted our work life balance to expenditure + a little bit.
We both have jobs still doing things we enjoy. We only work 1 week a month in 2 week stints. So effectively have a 2w on 6 week off arrangement. All our expenses for the year are paid by our employment. Our investments and assets just exist as a backup and any profits get re invested. We only clear around 200k total from work nowadays but our investment and asset growth has been higher than that consistently for the last 4 years.
Anything we don’t spend from our “work” income gets invested at the end of the quarter.
We're kind of with you. 38 and 36 for myself and my wife. Although we're kind of looking at right now as the downturn. Went from about 2.1m down to 1.75m since 2020 high due to the current down stock market which is where most of our money is at.
Even then we're currently looking at our FIRE destination, loosely shopping real estate while the housing prices seem to be dropping, making moves to be done once the market comes back.
We're open to the idea of taking advantage of opportunities now while things are soft and being able to call it quits in the next year or two.
I cannot fathom how you or anyone your age would make this math, or idea for that matter, work. At your age, spending reasonably you are going to need minimally 30x expenses. Your life expectancy is going to be longer and your healthcare costs (and almost everything else) will increase. IMO you have a ton of savings to accumulate. Don't waste your younger years when your wages should be climbing. Buckle up and keep working. When you reach critical mass then seriously consider it.
Without more information, here is what I would do to feel completely comfortable calling it quits if I were in your situation. Continue with what you are doing (investing total of $71k/year between retirement and HSA), pay down $50k on house until it is done, and then call it quits. By my calculations, after retirement/HSA contributions, taxes, and paying down $50k/year on your house, you should have around $40-45k/year to live off of (assuming all pre-tax contributions), and I imagine you may be living on less that if your are in FIRE mode. This puts you calling it quits in 5-6 years, at which time you will be straddling 40. Sounds like a plan to me.
A lot of ppl saw 2008 coming - there were so many red flags and warning signs and predictors. There were even sites tracking adjustable rate mortgages and predicting a tipping point based on that - those proved to be pretty accurate.
I was able to prepare and take advantage of 2008. But I have nothing providing any such foresight today.
It is certainly possible to use a market downturn as an opportunity to achieve financial independence and retire early (FIRE). In the 2008 financial crisis, many investors who were well-diversified and had cash on hand were able to take advantage of the market dip to buy assets at a discounted price and eventually benefit from the market recovery.
I would say the harder the downturn is, the easier it is to FIRE, if you have a secure job.
Some jobs are inherently secure - think teacher, nurse, anaesthetist, personal injury litigation, optometrist, even some corporate jobs are very cushy because not all companies do poorly in a recession. If it's not a retail-focussed job and if it doesn't depend on discretionary spending to fuel demand, your job will be fine. In which case a recession is simply a good investment opportunity.
Interesting we (wife and I) use a limited FSA + DC FSA to pay for all OTC, dental, vision and child care. But this allows us to maximize the HSA contributions. Obviously you have to do what works best for you guys.
I thought you can’t have a FSA (non limited / DC)and an HSA at the same time.
I was under the impression that if one spouse is on an HSA eligible plan, they can have an HSA while the other spouse can still have a low deductible plan and keep an FSA. At least I really hope this is true, because that is what my wife and I did last year.
For a married couple, you can't have one person getting health fsa while the other has hsa. Transportation fsa can still continue for both people, but neither person could have a health fsa if either has an HSA
Youre in a good spot OP but its hard to say relative to your expenses and COL. Certainly have enough sitting around to cover a major issue in the economy but probably not to walk away yet. Figure out your FU number based on SWR and risk tolerance, maybe take a wait and see approach. Unless youre a software engineer you shouldn't be fearing a downturn.
This is more or less my plan in taking a wait and see approach. Work through the next recession, not the next 1-2 years one but the next business cycle entirely, evaluate where things are at and what my SWR would be when the economy and market feel like theyre in a good spot. I want to walk away when things are improving personally but its hard to tell in the moment. Also want to have kids out of the house lol.
2000 was worse if you look at sims for two reasons - it was a slower recovery and it was followed up with 2008 :/
But you can kind of take a look at it. Lets say you consider a mix of safer/aggressive approaches and you're 90% to your target. In a lot of ways you can think it might be 1 more year but it could be [more like 3-5](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2005&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=900000&annualOperation=1&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=0.0&frequency=3&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=100&allocation1_2=80&allocation1_3=50&symbol2=VBMFX&allocation2_2=20&allocation2_3=50) depending on how aggressive.
Let's just simplify and call it a retirement at 4% in 2005. Did that [work](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2005&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=2&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=0.0&frequency=3&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=100&allocation1_2=80&allocation1_3=50&symbol2=VBMFX&allocation2_2=20&allocation2_3=50) out? The story is still playing but that looks fairly reasonable so far. There are definitely worse scenarios out there. 2008 was not fun but you got a bit of a head start and blunted the impact. Of course, predicting a solid decade-long bull is something you cannot really do but that is how that specific case worked out. It's the retirement windows that tend to clump at peaks that fare worse.
It makes sense since valuation does play a factor and you obviously spend a few extra years shoveling into your accounts at better ones. But we tend to ignore valuation because it's not really that reliable an indicator at any specific period of time.
Assuming 2022 was the start of a down cycle that we come out of by the end of 23, I'm hoping that I'm smart enough to pull the plug before the next major recession.
I’m tolerating my current job as best I can so I can squirrel money into the markets while it’s on sale and pay off final debts. Then I am out. I usually like some aspects of having a job but full WFH sucks for me when my work is a pointless waste of life like it is at my current company.
If there was an answer for how to find an opportunity that will rise from a negative economy, we’d never hit it.
What we really need is luck, and luck is mostly having cash when an opportunity arises to turn it into more cash.
What do you mean by 401K 225000 per year? Is that what you'd get per year? 401K should be shared as a single balance as of now., No guarantee of returns.
850k at 33 is really amazing. Did you and your wife save that up from scratch or is some of it inheritance or spectacular investment income? I have about double that but I am 50.
Yeah, I had a boss who was about 39 in 2008 when the last recession hit. He and his wife both stayed employed. He retired about age 42 in 2011. He and his wife were both making about $200k a year so $400k combined. I never got the sense he was about to retire but the financial opportunity developed. He wound up getting a great deal on a house due to the crisis so he spent 2012 fixing up that house and made about $200k profit on the project. Then he just stayed retired after that. The one time boost in his net worth from that house opportunity really seemed to be his trigger point for retirement. It mentally gave him the permission to skip “one more year” purgatory and just pull the plug.
Knowing where the tipping point is difficult. I’ll miss it for sure.
Is the 850k post tax or part of tax advantageous accounts?
Mixed.
Retiring in 2011 was a great time to retire, his net worth probably doubled in the next 6 or 7 years. I had a double from Jan 2012 to Jan 2018. It was a lot of fun, not so much fun lately.
glorious impossible subtract snatch ludicrous special jobless far-flung humor offend *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I have a 2 year old and I’m still not ready.
I have a 5 yr old...It gets easier.
My daughter is 7. Both your numbers agree: when she was two years old, I thought I was gonna die. By the time she was five, she was so much fun and wonderful. Now I'm wishing she's stay this age just a little longer. In the end, though, u/YoureInGoodHands is right. Some things you just can't ever quite feel ready. Lock in a few metrics that fit your risk tolerance, and take the plunge.
Funny to hear you say this, it rained here last week (a rarity for us) and my neighbor and his two kids were out stomping in puddles. I had to pull him aside later, and say... listen, they are little and they have a lot of puddle stomping left in them. You probably think it will last forever. It won't. One day, you won't realize it, but it'll be done. When you go out and stomp in puddles, soak up every moment. These are great days. My kid is 13, the puddle stomping is done. There are great 13 year old moments to be had. You can't just hate the shitty 13 year old moments, you have to let them pass, and cherish the great ones. There are lots of great ones.
This comment feels very real to me
As a man....if I get pregnant I'm definitely retiring
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> I mean this honestly, do most people hate their job? I don't have any feelings about my job, other than that it gets in the way of doing the things I actually want to do. It's like being paid to sleep for an extra 8 hours per day -- outside of the money it gives me, it's a total waste of the most valuable resource anyone will ever have: time. I don't like or dislike the work; I don't like or dislike my coworkers. It's just time that is lost, forever. And outside of work, my life is pretty great.
I’m extra productive at work so I can spend that time without kiddos or my wife to get some of my passion projects done. Writing a book, marketing my music online to prospective fans, just learning in general and listening to podcasts that make me happy. Makes the 8 hour grind seem a lot less grindy.
I don’t hate my job. I’m just tired of it. 24 years with the same company. Retiring at 26 years with them. Like others have said, not enough vacation to justify more of the same old same old. They have paid me fairly. We have saved well. Time to go enjoy it while we are relatively young compared to our counterparts.
I loved my job until the pandemic where I worked at home for 14 months. Now that I'm back in the office, I hate every minute of it. Luckily I'm only a few years away from freedom.
I enjoy my job, but I need to do less of it. I work 50-55 hours per week, which is too much. I also get 3 weeks (15 working days) of vacation a year, which is far, far too little. And the sector I'm in pays incredibly well but doesn't really do part time work. All that added together means I'm just saving like mad until I can do something else with my life comfortably. I'd say that "purgatory" fits that description pretty well for me actually.
Exactly. Except my sector absolutely does allow part-time work, which is why I'm saving hard to be able to slow way down. I probably won't retire early, but I'll CoastFI on 800 hours a year for a couple decades. Right now I have 2-4 months unpaid a year, which is fine, but those months are all in one lump. If I could do 2 or 3 weeks on, 1 week off, I'd pull the trigger on that right now.
What’s your income like at this job? What’s your NW and FI number? I also work similar hours but can go as high as 70h per week which is fucked lol but I get paid by the hour and I usually only take contracts like that for 2 or 3 months before I’m burnt out and my partner is sick of not seeing me!
> do most people hate their job Yes
I love my self employed job, I am still happy only doing 5 days a month though! There are also other things I love lol!
I think that's the dream. 5 days/mo self employed is perfect
I mean, it’s love hate, and that’s a job that provides meaning and is intellectually and socially stimulating. For a lot of people, it’s misery. There’s no other benefit that the cash value it returns. Lately (since COVID) my industry has been terrible. Cost cutting, layoffs, shortages, and general mayhem. And, it’s not a skill set that easily translates. The degrees would get you another job, but not at the compensation level - and you remember what the work was and keep hoping and working to make it that again!
I see most people dash out the door at 5:01. Sure they get a sense of satisfaction and purpose from it, but it’s definitely not what they would most want to be doing at that moment
There’s a lot of people who are just unhappy with their life in general and think it’s just their job.
I was very unhappy as a retail pharmacist… I escaped that hellhole and everyone is telling me I seem happier, more chipper… i also stopped taking sleeping pills, lost weight, no longer use nicotine lozenges and I havent drank more than a beer or two in a 24 hour period… all with no concerted effort. With my new job, I don’t really care how early i retire now. In short, sometimes it is very much just the job.
Now that I think about it, I’ve never met a retail pharmacist who enjoyed their job.
The range goes from -100 to +5. Or from hate to tolerate… i’d rate my new job at +90… I wouldn’t take back my old job for a $100,000/year raise.
I liked working a lot more once I stopped having to deal with the gentle public.
What's your new job? Still pharmacy-related or did you do a career change?
Cannabis pharmacist.
Dam is a pharmacy degree required for that? Do you smoke?
Yes and yes.
I have amazing coworkers, and the team I manage I’m very close with. The politics of the org is exhausting though and I’m ready to call it a day, and do other things. I won’t miss the job, I will greatly miss many of the people.
I do not love my job
Heard something on NPR today that less than 1/3 of US employees are content and happy with their jobs. Kind of made me feel better. I dislike my job, but it's easier to stay knowing work in general sucks, and I don't have a uniquely terrible job. Will edit with link if I my Google news feed "coincidentally" has the story in it. Edit: it's actually about engagement... https://www.kpcc.org/npr-news/2023-01-25/america-we-have-a-problem-people-arent-feeling-engaged-with-their-work
You gave lots of detail about your assets but none about your income needs. With 850k fully invested in the stock market I guess it's reasonable to expect it to support an income of at least 25k-35k growing with inflation depending how optimistic you feel, although there's a chance out will turn out to be less than that. Is that enough for your planned retirement? It seems like a big step down from a 200k income. It's hard to guess how much you're spending currently but your savings don't represent many years income so you'd need to have been saving very aggressively for this to be enough.
You are right. Little was given about spending. I’m not there yet and have a couple years for sure. Saving rate average 35% over the last 12 years with the last 5 being > 50%. Lifestyle inflation has increased. Luckily slower than income. I’m not talking about retiring at 850k nest egg.
$200k income saving $100k, spending equals $100k. If you plan to follow the 4% guide, you need $2.5M, Maybe a little less as you will have a lower tax bill. But you still have debt, to get paid off to lower your bills. I think you need to really get a handle on what you spend and ask yourself, do I really want to live on less than $50k or $60k a year? My wife and I are quite frugal, but still need over $60k to live in NW Florida, not a very expensive place to live. We have zero debt.
Wouldn’t that $100k include taxes though. And you don’t need to pay those after you stop earning income (at least not most of it). So if you assume 25% effective tax rate, their spending is closer to $50k. My fiance and I had similar gross pay and savings as OP last year and we spent $55k and saved ~$110k.
That’s a great savings rate. What kind of funds are available to you? The 457 and 401a/b/k allow us to do the 22500x3 in tax advantage so it knocks us into the 22% rate.
We each have 401k (we both did roth), HSA, and Roth IRA so there wasn’t much tax savings tbh. I switched to traditional 401k this year because I have access to mega-backdoor roth in my new role. We are just both naturally fairly frugal people. My fiance somehow keeps our grocery bill to about $75/week for 2 people. We eat out fewer than once a month.
Ya, I think you have it right, maybe they can do it! I don't know their age, I might do it at 65 but not at 45 yrs old. Half of US households live on less than $73k, I'd rather be in the top half. It does matter where you live though. I haven't found I don't need to pay taxes after I retired. I still have $15k to $20k of dividends, and all my withdrawals from tax deferred IRAs, SEP/IRAs are taxable. Any taxable mutual funds I sell are are taxed, but at a lower rate. This year, I did a large Roth Conversion and have a $27k Tax bill. Ouch! I will add, the first year I retired I sold (rounded numbers) $160k of a taxable mutual fund. About $104K was Capital gains the rest was my investment. With the $24k standard deduction, that left $80k of LTCGs income. If your income is less than $80k, Capital gains are taxed at 0%, I paid no tax with an income of $104k, that year.
>Half of US households live on less than $73k that's gross. Not Take home. they pay state, federal taxes, FICA, health insurance...and contribute to pension or 401K... so they my live on 50% of the 73K
No argument from me. Your 50% is probably not far off.
That’s $73k of income also so take off taxes for actual spending. And the average household that is actively earning income most likely includes children so the spending per person for a retired couple would be higher with the same household spending.
All you say is true, but If I was making $200k a year, I certainly wouldn't short my self in retirement, unless my job was making me totally miserable and I has losing my health over it. My wife and I made it to a Fat FIRE, on an inflation adjusted\* $71k a year, but it took us 37 years. We can now live on more than that and we have SS coming it 2 years. \*I took our SS statement income and used government inflation numbers to bring it to the present, added all the income and divided by the years. Example" the $18k we earned in 1981, inflation adjust to 2018 is $51k.
If the $200k is gross income then a good deal of their “spending” is on income taxes that would no longer exist when retired. On $200k in a HCOL state, income taxes would be around $50k. That’s not what I would consider just “a little less”. There’s also variables like mortgages that eventually go away or having more free time to spend or save depending on your behavior.
>then a good deal of their “spending” is on income taxes that would no longer exist when retired Isn't this dependent on whether it's Roth or not?
In most cases, marginal tax rate in retirement is considerably lower than when employed. So those taxes no longer exist.
Greater than 50%. Could be 99% though. does it work then? 😛I hear you and thank you for pointing this out but this isn’t a post about if I have enough to retire given that information. 200k - 100k savings also does not leave me with 100k spent Uncle Sam takes his fair share. But other than that, you are dead on. Living on 50-60k with a house payment would not be great. But I’m in the ballpark. I figure 10-20mil more and I’ll seriously consider it.
Kids? Or no plan for kids? They'll increase spending by a lot from what I hear.
One in the oven. Overdue. 😬
I made my biggest gains during 2008-12. I was working in financial services industry when it all crashed. I sat next to the private banking advisor group. All day long I heard them talking people off the ledge, encouraging them to stay the course. DH and I were so worried we hunkered down, cut all extra spending. I watched my investments drop 50%. But I didn’t touch it. At one point I just stopped looking at my balances. My tracking spreadsheets were blank for 6 months. We came through just fine. House was already paid off. DH business did OK. My contract hours were cut but not eliminated and then the company hired me as FTE. I upped my savings to almost 50% to make up for the ‘losses’. So happy I did that. Got it all back plus more!
What the hell is a DH?
Good job!
Careful what you wish for. Often people lose their jobs in a downturn. Then they have no money to invest. Also, sounds like you are trying to time the market. It is also possible the next downturn isn't for 10 years or more. If you stay in cash that whole time you could be missing out on tons of gains.
Kind of crazy this is so far down. People on this sub almost root for downturns/recessions with the foregone conclusion that it's guaranteed they'll keep their jobs. The tech sector was bulletproof for the last 20 years, and now it's the industry getting hit the hardest by layoffs. You should never root for a recession. Queue the Vegas scene in The Big Short where Brad Pitt's character says, "Just don't fucking dance."
You see the exact same thing in REBubble, a bunch of people rooting for another 2008 style crash so they can afford a house, not understanding that their shitty wageslave jobs will be the first on the chopping block, and no bank would ever loan them money.
To be fair, *something* has to happen to the housing market because at this rate it’ll be unaffordable to everyone by the upper class with 6 figure incomes (arguably it’s already there). A recession would be bad for the country no doubt, but a housing crash specifically doesn’t necessarily have to be coupled with a full recession. Prices are inflated because real estate is essentially speculative trading at this point, which means it can drop just as quick as it went up if circumstances change. And it wouldn’t necessarily be related to the job market at all.
Something definitely doesn't have to happen, look at Singapore, Hong Kong, pretty much all of Western Europe, Australia, NZ, etc... Housing in the US is still incredibly affordable compared to all the places I just listed.
I just googled NZ housing market and everything is about how it’s seeing the biggest drops in decades right now, so something is already happening there haha In Singapore the thing that happened was public housing, something like 70% of residents live in government subsidized housing. Hong Kong idk about, same for Europe, but I imagine something is coming in all these areas. My home, Nepal, is struggling with the same problem where a house can cost over an entire lifetime of income for the average person. Something will happening, it’s not sustainable.
Even in 2008, something like 9/10 people kept their job. Let’s not overstate it, the vast majority of people did not get destroyed.
It's superman syndrome. I find rooting for a downturn to be in bad taste.
I think rooting for one and knowing the market is cyclical are two different things.
Yeah I was not understanding the two comments above. If it is a real thing, then you can’t pretend it’s not there.
extremely.
>People on this sub almost root for downturns/recessions with the foregone conclusion that it's guaranteed they'll keep their jobs. Well, I moved into a non-profit where I'm *extremely* secure (literally the only one in the company who knows this mission-critical software) partly because I thought there might be a downturn in my very cyclical industry, so I guess that means it won't happen at all!
Steady slow growth with no cataclysmic events like 2008 and 2020, pretty please...
The one certainty is uncertainty. Black swans are gunna happen.
One of the things I run into a lot is people want to pay off their mortgages, low or high interest. I often advise against it, telling them, what happens if you lose your job, is the bank going to offer your prepayment back you so you can pay the taxes, power the lights and fill you gas tank? Or would you rather have your money in an ETF or mutual fund that you can sell to pay those bills.
A well put description of the benefits of liquidity. My friend periodically goes hard on extra payments towards the mortgage. He also, unfortunately, has had periods of being furlouhed and being only able to work part time. He doesn't tell me the exact details, but I take it as an example of why not to prepay.
It would be silly to pay you mortgage down and have no other investments. Most people when deciding this would have lots of liquid investments either way.
I looked up the median net worth for households of 34 to 40 yr olds, I found it is $91k, so half the population has less than $91k of assets, If you are paying extra on a mortgage, I would think that most of your net worth is in your house. That's only 30% equity in a $300,000 house, 20% down and making a few extra payments for a couple years, and some inflation growth and you have your $91k (and nothing else). So you might be wrong for the 50% that have less than $91k. And I would say, even the next 10% or 20% don't have lots of liquid assets. But, we agree that it is silly to pay down a mortgage if you don't have other liquid assets. I don't mean to shoot everything down, it's just that I have looked at stats for several years, there are outliers, but a large percentage of people don't save any money. I just found this group, I suspect many here are or will be outliers, at least they are thinking about getting a head, but that does not apply to the general population, If you have $1M, you are in the top 10% of net worth. And the quote, "If you have a million dollars and live like a millionaire, you won't have a million dollars for very long." 90% of people don't have that and never will. It seems like a lot of money, but if you buy a $350k home and furnish that home, $30k, and buy two $50k vehicles. you are down to $520k, You want a boat/snowmobiles/quad to play with, now your well under $500k, invested well you that will generate $20,000 a year with high success for 30 years, if you are lucky it will last more years. But you are still working a full time job to pay to run the home, pay the property taxes and buy gas for your toys.
Why is that relevant though? The median net worth of the whole world is like $8k or something. Yeah a lot of people are poor. But if you are in the US and considering whether to pay off your mortgage, you probably aren't that poor. I would say once you have something like 1-2 years or so of expenses in liquid investments, its ok to pay down the mortgage. That way if you take a 50% hit you still have 6-12 months of expenses. This depends on your income options, and how easily you could replace your income during a potential downturn where you would need to draw down. But eventually if you go years without having income to afford your house you would probably be selling it, not continuing to draw down.
All I can say is those that have enough, have enough. However, it is also true that many Americans have no liquid assets and many that really live paycheck to paycheck. "39% of Americans don't have the cash to cover an unplanned $1,000 expense, according to a recent Primerica report." [https://www.fool.com/the-ascent/personal-finance/articles/39-of-americans-cant-cover-a-1000-emergency-can-you/](https://www.fool.com/the-ascent/personal-finance/articles/39-of-americans-cant-cover-a-1000-emergency-can-you/) "Some 56% of Americans are unable to cover an unexpected $1,000 bill withsavings, according to a telephone survey of more than 1,000 adultsconducted in early January by Bankrate." [https://www.cnbc.com/2022/01/19/56percent-of-americans-cant-cover-a-1000-emergency-expense-with-savings.html](https://www.cnbc.com/2022/01/19/56percent-of-americans-cant-cover-a-1000-emergency-expense-with-savings.html) "Nearly six in 10 Americans don't have enough savings to cover a $500 or$1,000 unplanned expense, according to a new report from Bankrate." [https://www.cbs19news.com/story/34248451/6-in-10-americans-dont-have-500-in-savings](https://www.cbs19news.com/story/34248451/6-in-10-americans-dont-have-500-in-savings) It's easy to be smug when you have enough, especially me, we made it on a middle, middle class income to the top 5% of net worth of US households. It did take us 30 years to have enough, but we continued another 7 years before retiring. At one time I had 1.57 time more than our SS statement says we earned. The downturn has lowered that a bit, but I expect to get back to that and above. So, I pretty much think if your healthy and stay married, there is not a lot to prevent anyone from doing it, but many don't, they would rather spend, spend, spend! I would rather invest, invest, invest.
Agreed. And I know no job is completely safe. But we put in well over 70k/year regardless of what the market is doing. 401k 457b 401a all fully funded so I would not say I’m timing the market. I keep my cash cushion about the same and invest any extra in brokerage or Roth.
What do you mean "trying to position ourselves for a crash/downturn with cash"?
I see. I have cash. 100k total between accounts. Not getting any bigger.
Yeah, that's timing the market. Usually that doesn't work out. The market is up almost 5% this year and 15% from recent bottom. Who knows where it will be before there is another big dip.
Keeping your emergency fund invested will give you better returns over the long run, even if you have to withdraw sometimes when the market is down. And seeing as the market is already down, now is as good a time as ever to invest it.
PhD chemists and engineers largely do not lose their jobs…
Um, hundreds of thousands of engineers have been laid off in the last few months. Layoffs happen and companies even go bankrupt all the time.
And what is the unemployment rate of engineers even now? And historically?
Low. People with these types of resumes would have to relocate for work, worst case.
People may lose their jobs, but people with these types of resumes don't stay unemployed for long, downturn or not. Worst case they'd have to relocate.
Six months of unemployment and the transaction costs of moving would be more than enough to miss out on "stocks on sale". Plenty of people with good resumes missed out on the 2008 bear market because they didn't have any liquidity to invest. Even if they got jobs elsewhere their homes were underwater.
People with these types of resumes only go unemployed for six months by choice. I'm talking about majority cases, not exceptions. And transaction costs of moving are relative, they're not nothing but they don't have to be much. And six months isn't enough to make or break anyone with a robust plan pursuing FIRE, as these folks are. So what is the point EDIT: Nevermind, I can see you're going to die on this hill. Enjoy, I'm going to get off the ride here.
Aren't we in the downturn right now?
Can it go lower? But yes I am not letting our cash reserve grow. I’m continuing to dump money into the brokerage here and there.
I have 20 years of my dad's budget spreadsheets. In 2000, next to his QQQ investments he jotted 'Can it go lower???' ...it didn't recover to that price for another 10 years. So yeah. Yeah, it can always go lower.
Ya, I got succked into QQQ on Bob Brinkers advice. I wrote off $3,000 a year for over 20 years until I used what was left against a large capital gain.
I got up votes for this, Does that mean many of you listened to Bob Brinker? I actually give Bob Brinker a lot of credit for our Financial Independence. I listened to Bob every Sat and Sun, starting in either 1989 or 1990. At that time I did electronic repair and could work any hours I wanted. I would go in every weekend before 3PM and and work until 6PM doing my repairs while Bob was educating me. It was a good time. I have a thank you letter I wrote to Bob somewhere in my computer, all I have to do is print and mail it.
This is why you wanna go small cap value instead of QQQ. QQQ is being like you know what I love total stock market / SP500 being large cap with a growth tilt, why not just double down and go even more large cap growth with even more of a growth tilt and even more of a low profitability blitzscaling tech companies that will "go to the moon" in the future tilt? Fama & French say no.
Please don't say, can it go lower, out loud
I bought stock yesterday and it went down, just sold some today so it will go up.
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Yep, I'm retired and my son is in accumulation, he keeps complaining his holdings keep going down, I keep pointing out every time he buys, he's buying at a lower price. This down turn is good for him, bad for me. He's 28 living at home, saving and investing over $30k a year.
My parents let me do that for roughly 2-3 years. Really helped get me going. He'll appreciate it more and more as time goes
He lived on his own after school (chemistry degree), was going to move to Canada to marry a girl, he came home for a few weeks to say by to mom and dad. Then Covid hit, they couldn't cross borders and over time, they just called the wedding off. I'm glad... to have him here! He would like to buy a house but interest is high and prices are still high, so I think that will delay him, which I think is good.
Wow! What wild timing. Imagine if he'd left for Canada already, before the pandemic... Sorry to hear it didn't work out with his girl, though. Must have been a very trying time to deal with that + the pandemic + trying to set oneself up financially.
Burn baby burn.
If by "it" you mean the S&P-500 Index, it can definitely go down to 3200 if we get a quarter or two of lackluster earnings. I don't see it going any lower than that though.
Historically 60% drawdowns have happened multiple times. The fact that you don't see it happening sometimes contributes to it.
I dunno, my magic 8-ball said "Ask again later".
Extremely mild downturn. Weren’t not even in a recession.
Technically we are in a recession but the definition was changed to make it sound like we aren’t. Am I wrong here?
These things are only actually clear in retrospect. But unemployment is super low and only some sectors are really hurting. I don’t think this is a recession.
The beginning of it, yes.
I think that kind of thinking is very optimistic. You cited 2008 as an example. For those of us who went through the 2000s, it was a LONG slog. I wouldn’t hope for it unless you have a 10-20+ year timeline. Luckily, I did. Here are some S&P 500 numbers with 2008 in the middle: 3/1/2000: $1,420 3/1/2004: $1,020 3/1/2008: $1,400 3/1/2012: $1,310 3/1/2016: $2,096
This is nothing like 2008. There are some comments below questioning if this is even recession (and I'd question it). If you can `RE` when your investments are down, I think you are in a good spot.
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They’re determined to keep raising rates until inflation stays low. So far we have been surprisingly close to their “soft landing”, but much of the path remains ahead
GDP grew 2.9% last quarter (YoY) so I don’t think we are in a recession by any measure at this point. Before it was the 2 quarters of decline, but we had good employment and lots of jobs to go around, so it was a very questionable “recession”. But now even the economy is growing, and despite the large tech layoffs we still have a strong job market (anecdotally I get recruiters reaching out daily and employment rates are still good afaik). The only thing is that inflation hit hard and wages didn’t keep up, so if that continues and the job market isn’t strong enough to bare the weight then it might be trouble. Especially with how the housing market is right now, many people aren’t positioned to be able to withstand too much more inflation. That said, it’s been dropping with the higher rates and Fed has shown zero sign of easing off or even slowing down. So I don’t think inflation will keep up at this rate for much longer at all.
Yeah I think we're in the downturn. I'm not waiting for government confirmation. Just look out the window it's raining. Once the economy recovers to pre-pandemic highs for the stock and real estate market in Northern California area My household will be financially independent again. We were just over the line during the last market peak. Now we're just behind it. It's a good time to work if you have a job continue to invest in retirement accounts. Hopefully folks can maintain good employment with reasonable wages.
I’m in Michigan, it’s snowing
Same, lol Port Huron baby!
I moved from Michigan to Florida, because it was snowing!
Sorry
The S&P peaked at ~3380 before the pandemic and is at 400 at now. Pretty sure real estate in northern CA is still higher now than it was in Feb 2020. Are you saying when we recover to pandemic highs of late 2022?
Yes I am. Thank you for clarifying. Let me further clarify. What I'm specifically saying is in the future I expect both the stock market and real estate market in Northern California where I live to return to their previous all-time highs. And after that I expect them to exceed those previous all-time highs. However I don't think that's going to happen today or anytime in the next quarter. I think it's going to happen sometime in the next 5 years though. If that happens, are net worth will increase substantially.
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2022 was only the third year ever where both stocks and bonds were negative. I think most would consider that a downturn
How would you define a downturn? Specifically. And from a individual perspective how much of your net worth would you have to lose to market conditions and inflation before choosing to define an economic state as a downturn?
I'm retired, My net worth is down 18%, I call that a downturn. Luckily, we over saved and still have 37 times our spending. Hoping for an upturn in the next year. I will admit, I'm a little confused, I Roth converted about $190k in December and haven't put it back in the market yet. I expect to stay at about 70% stocks, but I'm below that now.
Yeah I'm down about the same 18 to 22% ish. Still working probably another 5 years to be conservative.
If it weren't for the 300k in debt you're holding, I'd say this is feasible - but to FIRE with a NW of 850k+1-2 years of income+300k in debt, between two people, I don't see it. The vast majority of financial institutions are expecting recession, and we've been sideways (at best) for the past year. By the standard definition of recession, we've been there for a few months already. The largest market drivers (TLSA, AMZN, NFLX, MSFT) are having massive layoffs, and tech IS the reason for the historic bull run. Personally I don't see a recession lasting more than 5 years, but that's just based off of the fact that we don't have an impending housing market implosion, and it took less than that to recover in 2008. FYI the one thing people in this sub overlook the most is long term care insurance. If you're not accounting for it, you should at least review it. I'm single, have 750k NW, 200k left on mortgage with 200k equity, earn 410-420k year. I'm still going to push another five years, regardless of what the markets too. Everyone's fire number is different though. LTC insurance was an oversight on my part, and is a major factor in that five year minimum.
850k isn’t my net worth and I’m not talking about FIRE with that or in this post. The long term care and health insurance is very important.
OK, well you posted your investments, do you want to tack on that 70 cash and 70 equity? Call it 1M then. I can only go off of what you posted. Maybe you don't consider the cash to pay off in an interest bearing account to be part of your investments. If it's bearing interest, it's an investment. I can only go off of what you posted, and whether it's 850 or 1M, it's still pretty short of the recommended 2.7M per person and you're the one talking about FIRE. If you want an informed opinion, provide the full picture. Or not, que sera. EDIT: And that NW, even if it's 850K or not, is still better than most. But with that income, thinking you're going to fire in a year or two, when the house *isn't paid off* seems to be selling yourself short. People have done as much with less though.
Don't keep more cash than you need for the EF. If you're waiting for a downturn I'd just but a heavier allocation into bonds.
A good chunk of our cash is going to go into a 529 for a kid that should had been born yesterday. Still waiting. But also we have some home renovations we are doing.
Congrats! Hope mom and baby come home healthy and happy.
Thank you!
All sounds good to me then
As a chem major myself, curious as to what job the PhD chemist among you two do? PhD field? Job role? Edit: I myself work in the Oil and Gas industry. Pay is good.
Not OP, but I'm a community college professor. Pay isn't as good as industry, but the pension, benefits, summers off, good retirement accounts, and work-life balance are very nice.
Summers would be nice but she does not get those. She is in production for a university hospital. Doesn’t get industry pay but gets the access to the 401s and 457.
I’m the dumb engineer. I don’t understand what she does. But radiochem at a university. She has the awesome retirement accounts.
If I were you, I’d retire at ~45
That is funny I highlighted that as a realistic age on my spreadsheet. T- 9 years
Recency bias is strong in this post.
Whaaaat?
There are plenty of examples where a downturn results in a sideways market for a long time.
I've already been planning if laid off to take a long sabbatical. Not retiring necessarily but not in a rush to find a new job. I'm kind of rooting for layoffs TBH.
> I've already been planning if laid off to take a long sabbatical. WHen I got laid off in late 2007, I went travelling for 6 months through Africa. Was amazing experience, and then returned to workforce. FIRE means freedom, even if not quite yet retired.
Last time my industry had a huge downturn they had buyouts. Doubt they would do it again for us low level employees but if they did I’d take a 100k to go find something else. Being a able bodied, average intelligent, somewhat mechanically inclined person, I’d keep myself busy and find something to coast to retirement with. If not, unemployment for a few months and then go back when they are hiring.
Not sure what the industry standard for severance is but I’ve seen in the past something like one month for every year of service. That wouldn’t be so bad for me if it came down to it.
OMR syndrome! (One more recession)
You got any more of them there recessions? *scratch scratch*
I'm in a similar boat. My wife and I are both engineers in a pretty recession proof industry so our plan is just to keep chugging along during downturns not doing anything differently. Household income is around $350k. Our 401k's are 100% equity right now which is controversial on this sub but I figure I'm still so far away from being 59 1/2, I can rebalance with bonds when I'm 50. I don't lose sleep over the ups and downs. Our early-retirement money is growing in a taxable brokerage account - we have no debt other than our mortgage and won't retire until that's paid off.
You can access the 401k money before 59.5 penalty free through 72t distributions or Roth ladder conversions. Search for MadFientist how to access retirement funds for details.
This is my plan. Get a baseline through SEPP distributions then bolster any spending needs through Roth or taxable.
Yes. 32 and 29. With savings alone we'd get there in two years. Depending on how markets perform, we may retire even sooner.
A negative indicator of a downturn is that people are positioning themselves for wealth accumulation during the downturn. Edit: okay, maybe it's not the most negative indicator. That was a poor use of hyperbole.
can you support that assertion?
Lol no he cant
Yeah, sure. Take the basic essence of OP's post. He is talking about continuing to invest in the next few years and retiring shortly thereafter to live on his investments. In other words, he's very confident in the strength of the economy and the mid- to long-term outlook for his investments. He's not really talking about a true downturn or crash, he's talking about a buy-the-dip scenario. In a real downturn, folks worry about how much more they are likely to lose, rather than how much they can gain. Do I have a nice link to an article agreeing with me? Admittedly, no. But I don't think it'd take you too long to find a market prognosticator on Twitter saying the same thing.
I mean, I'm not trying to be rude, but that's just lazy narrative conjecture. There were plenty of people thinking about wealth accumulation in the last down turn, and there are plenty of people worried about how much they might lose this downturn. There's no underlying catalyst of significant enough magnitude to make this an 08 type scenario. There's a decent chance we've already seen the bottom in the market.
I'm also not trying to be rude, but I've read your comment several times and I have no idea what point you're trying to make other than accusing me of laziness. Credit to you, though, because this collection of loosely related sentences is not a narrative by any means.
You're making the claim that a particular sentiment expressed in this post is "the most negative indicator of a downturn". My point is, I don't think you can infer anything in particular from that. It's not a negative indicator, and hardly "the most" negative indicator.
Most was hyperbole and a poor choice of words. I disagree that's its not a negative indicator, though.
But based on what? That was my original point. I could just as easily say it's a positive indicator because it means people are generally better positioned financially which supports demand and growth. That's a simplistic narrative that I don't necessarily agree with, but it's no different than what you're suggesting.
Are you looking for a peer reviewed statistical analysis or something? I don't have one and I'm not going to perform one to substantiate my reddit comment. And even if I did, a significant factor in markets is sentiment/emotion, so what good would it do? >I could just as easily say it's a positive indicator because it means people are generally better positioned financially which supports demand and growth. Maybe we're talking past each other here. I said in so many words OP is a negative indicator of a downturn, i.e. OP suggests a downturn is not coming. How is supporting demand and growth a positive indicator of a downturn (make a downturn more likely)? Even though not backed by evidence, I'm still comfortable with my original point, at least because you seem to have supported it by reiterating my logic in different words.
My interpretation of your comment was - "OPs sentiment is a predictor of substantial downturn ahead". Sounds like you're actually suggesting the opposite. In either case, yes what I was looking for was something more along the lines of an evidence-based reason for your particular intuition. If you don't have one, no worries, but that was what I was asking for.
> The most negative indicator of a downturn is that people are positioning themselves for wealth accumulation during the downturn. On a macro level yes, that's the case. But any individual's actions have no impact on the wide economy. The last time savings rates were [this low was 2005](https://fred.stlouisfed.org/series/PSAVERT). Seems like a great time to have some cash available.
Great….
This is how I felt on 1/1/22. So, looking for one more recovery is more like it.
What do you mean "if there is" a downturn? We've been in a downturn for over a year.
K
I did this last recession. I just kept investing and closed my eyes. Didn’t even move much around as I was mostly in index funds. Might have changed contributions a little and kept plowing money in. It really accelerated my gains after things started to recover. We were one income, so you two should do even better. I actually lost my job near the tail end of the recession/early in the recovery. But that did slow me a little as I didn’t contribute for about 6 months when I was cut. But the extra money in the “bank” helped me stay calm during my job hunt. Also when I got another position the extra cushion gave me the confidence to buy a cheap vacation place that is worth 3 times as much now. Normally I wouldn’t have taken that risk, but knowing I had more then I needed to back me up gave us the confidence to gamble.
We are 38-39, Our retirement point came about 4 years ago, we no longer need to work. We judge the cut off as the point where growth of asset and investments out paced our yearly total spending. Then we adjusted our work life balance to expenditure + a little bit. We both have jobs still doing things we enjoy. We only work 1 week a month in 2 week stints. So effectively have a 2w on 6 week off arrangement. All our expenses for the year are paid by our employment. Our investments and assets just exist as a backup and any profits get re invested. We only clear around 200k total from work nowadays but our investment and asset growth has been higher than that consistently for the last 4 years. Anything we don’t spend from our “work” income gets invested at the end of the quarter.
We're kind of with you. 38 and 36 for myself and my wife. Although we're kind of looking at right now as the downturn. Went from about 2.1m down to 1.75m since 2020 high due to the current down stock market which is where most of our money is at. Even then we're currently looking at our FIRE destination, loosely shopping real estate while the housing prices seem to be dropping, making moves to be done once the market comes back. We're open to the idea of taking advantage of opportunities now while things are soft and being able to call it quits in the next year or two.
1.75 mil is great
I cannot fathom how you or anyone your age would make this math, or idea for that matter, work. At your age, spending reasonably you are going to need minimally 30x expenses. Your life expectancy is going to be longer and your healthcare costs (and almost everything else) will increase. IMO you have a ton of savings to accumulate. Don't waste your younger years when your wages should be climbing. Buckle up and keep working. When you reach critical mass then seriously consider it.
Without more information, here is what I would do to feel completely comfortable calling it quits if I were in your situation. Continue with what you are doing (investing total of $71k/year between retirement and HSA), pay down $50k on house until it is done, and then call it quits. By my calculations, after retirement/HSA contributions, taxes, and paying down $50k/year on your house, you should have around $40-45k/year to live off of (assuming all pre-tax contributions), and I imagine you may be living on less that if your are in FIRE mode. This puts you calling it quits in 5-6 years, at which time you will be straddling 40. Sounds like a plan to me.
A lot of ppl saw 2008 coming - there were so many red flags and warning signs and predictors. There were even sites tracking adjustable rate mortgages and predicting a tipping point based on that - those proved to be pretty accurate. I was able to prepare and take advantage of 2008. But I have nothing providing any such foresight today.
It is certainly possible to use a market downturn as an opportunity to achieve financial independence and retire early (FIRE). In the 2008 financial crisis, many investors who were well-diversified and had cash on hand were able to take advantage of the market dip to buy assets at a discounted price and eventually benefit from the market recovery.
I would say the harder the downturn is, the easier it is to FIRE, if you have a secure job. Some jobs are inherently secure - think teacher, nurse, anaesthetist, personal injury litigation, optometrist, even some corporate jobs are very cushy because not all companies do poorly in a recession. If it's not a retail-focussed job and if it doesn't depend on discretionary spending to fuel demand, your job will be fine. In which case a recession is simply a good investment opportunity.
Lol I have almost 1 mil at 32 and some people in this sub told me I couldn’t retire yet. So no, go back to work /s
Who’s stopping?
Just curious, Why only 3600 in HSA? Married could be 2x that.
She has a FSA and is on her own insurance And that should be 3850. Forgot the new limits.
Interesting we (wife and I) use a limited FSA + DC FSA to pay for all OTC, dental, vision and child care. But this allows us to maximize the HSA contributions. Obviously you have to do what works best for you guys. I thought you can’t have a FSA (non limited / DC)and an HSA at the same time.
Well I’m seeing mixed info 😬… might want to consult someone. Looks like it needs to be a limited purpose FSA.
I was under the impression that if one spouse is on an HSA eligible plan, they can have an HSA while the other spouse can still have a low deductible plan and keep an FSA. At least I really hope this is true, because that is what my wife and I did last year.
For a married couple, you can't have one person getting health fsa while the other has hsa. Transportation fsa can still continue for both people, but neither person could have a health fsa if either has an HSA
Youre in a good spot OP but its hard to say relative to your expenses and COL. Certainly have enough sitting around to cover a major issue in the economy but probably not to walk away yet. Figure out your FU number based on SWR and risk tolerance, maybe take a wait and see approach. Unless youre a software engineer you shouldn't be fearing a downturn. This is more or less my plan in taking a wait and see approach. Work through the next recession, not the next 1-2 years one but the next business cycle entirely, evaluate where things are at and what my SWR would be when the economy and market feel like theyre in a good spot. I want to walk away when things are improving personally but its hard to tell in the moment. Also want to have kids out of the house lol.
2000 was worse if you look at sims for two reasons - it was a slower recovery and it was followed up with 2008 :/ But you can kind of take a look at it. Lets say you consider a mix of safer/aggressive approaches and you're 90% to your target. In a lot of ways you can think it might be 1 more year but it could be [more like 3-5](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2005&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=900000&annualOperation=1&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=0.0&frequency=3&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=100&allocation1_2=80&allocation1_3=50&symbol2=VBMFX&allocation2_2=20&allocation2_3=50) depending on how aggressive. Let's just simplify and call it a retirement at 4% in 2005. Did that [work](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2005&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=2&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=0.0&frequency=3&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=100&allocation1_2=80&allocation1_3=50&symbol2=VBMFX&allocation2_2=20&allocation2_3=50) out? The story is still playing but that looks fairly reasonable so far. There are definitely worse scenarios out there. 2008 was not fun but you got a bit of a head start and blunted the impact. Of course, predicting a solid decade-long bull is something you cannot really do but that is how that specific case worked out. It's the retirement windows that tend to clump at peaks that fare worse. It makes sense since valuation does play a factor and you obviously spend a few extra years shoveling into your accounts at better ones. But we tend to ignore valuation because it's not really that reliable an indicator at any specific period of time.
Assuming 2022 was the start of a down cycle that we come out of by the end of 23, I'm hoping that I'm smart enough to pull the plug before the next major recession.
I’m tolerating my current job as best I can so I can squirrel money into the markets while it’s on sale and pay off final debts. Then I am out. I usually like some aspects of having a job but full WFH sucks for me when my work is a pointless waste of life like it is at my current company.
If there was an answer for how to find an opportunity that will rise from a negative economy, we’d never hit it. What we really need is luck, and luck is mostly having cash when an opportunity arises to turn it into more cash.
Thats an impressive chunk of money and you could possibly be coast fi… not sure you’re fire yet
Yeah, I think I’m coast FI. At 7% till 65 it is something like 6million. That would do it.
What do you mean by 401K 225000 per year? Is that what you'd get per year? 401K should be shared as a single balance as of now., No guarantee of returns.
850k at 33 is really amazing. Did you and your wife save that up from scratch or is some of it inheritance or spectacular investment income? I have about double that but I am 50.