Not too swift wrote:
[quote]Flagpole wrote:
Honestly at this point for me it doesn't even really matter. I have more than met my retirement goal, and I plan to work for 4-8 more years still. How the market does the rest of my life now just affects how much I give to charity and leave to my kids.
Really? If the market drops 60% like it did in 2008-2009 and you are 60% in equities and so lose 36% of your liquid investments this will not affect you?
How about like in 1929 when it was nearly a 90% drop? No problem for you.
You guys need to wake up
If aliens come down and take over, yes, that would affect me.
But, to answer your question, yes, a 60% drop would not derail me at this point. Why? I have zero debt including a home I own outright. I have more than 2.5 years of expenses saved in an MMA...the plan is to get it to 3 years before I retire. I have more in my retirement accounts today than I ever planned on with 4 years minimum left to work. Realize that with a 60% drop, that means that that would be it. It could stay stagnant at that point, and I would just work for 8 more years rather than 4 more (which I might decide to do anyway)...BUT, I don't believe it would stay at that level. After 2008, it took me less than 3 years to get back to where I was before the crash, not counting contributions. A similar thing would likely happen here. In 8 years, I will be 60. I will have more than enough to retire on then (I have enough to do it now if I really wanted to), and then just 2 years after that, my wife and I can get SS if we want to the tune of just under $49,000 a year at that point (actually it might end up being a little less, but mid $40s for sure).
So, what if this drop happened the day I retire? Well, I would likely use my 3 years of saved expenses while waiting for the market to recover, and if I didn't retire until age 60, I wouldn't even need to wait that long because at age 62 we can get Social Security. Being debt free allows you to live on the cheap if you need to. Also, I plan to downsize the house and likely get about $100,000 (perhaps a little less) on that trade.
So...would I rather that the market NOT drop 60% right before I retire? Of course. I would rather be able to help my kids buy homes, set up college funds for grand kids, etc., but that's just gravy. We will be able to live the lifestyle we want unless there is Armageddon.