Flagpole, good move paying off your mortgage, and congratulations.
"there are many things that make me believe we actually could see a bigger drop than that even"
Let's talk about recovery period. You suggest 3 years historically, with which I agree, but this next time will be different IMO. I don't think the drop will be quite so violent as it was in 2000 or 2008, which will draw out the time-frame for recovery.
Plus, it is amazing just how much depends on market valuations at the moment. All sorts of funds that have regular beneficiaries absolutely rely on the markets doing well in order to remain solvent over some time-frame, which time-frame has been getting shorter in many instances. If and when these funds are no longer able to successfully meet their obligations/projections, it will be up to the taxpayer to make up the difference, either directly or indirectly, even if the funds are private (actually, quasi-private), through things like the PBGC, etc.
This takes money out of the US consumer's pocket, and that spells gloom, because the US consumer drives a lot of economic activity. That, combined with the rising USD vs basket making foreign earnings worth less, makes US equity performance wane, and exacerbates the circular cycle. Making matters worse, to fight that effect, the fed will raise interest rates and thereby slow things further, because margin and leverage are insanely huge at the moment. Only a handful have successfully deleveraged.
The upshot IMO is that other places in the world MUST successfully develop internal consumer markets. Europe has done the best job of this IMO; China, India, Korea, and the rest of Asia need to do it. Just think if consumers in China, India, and Indonesia actually had some money to spend. Contrary to popular opinion, they don't, on average they are still dirt poor. The rich in those countries have abandoned their people altogether. I hold out no hope for development of those internal consumer markets in the next 15 years.
While South America, including Brazil, showed some promise, they are too chaotic to matter, and those that are decent like Chile and maybe Peru are too small to matter. Brazil leads the way in that region, and the game is up, and it will take a very long time to recover. Those people are too independent to consolidate good economies.
Which is why a great deal of attention has turned to Africa. Sure the richest send their kids to school in europe, but there is more local development there, than anywhere. They actually have resources and arable land, and a huge, young population. People are trying to develop their markets, and actually having some degree of success, especially some euro telecom concerns. It will still take some time, but already businesses like Coke are making inroads.
The upshot is that I don't see any replacement for the US consumer in the next 15 years, meaning that a recovery within a 3-year time period will either require a huge resurgence of the basic US economy, or it will require monkey-business like cheap money, subprime loans, etc. that kick the can yet further down the road. Activity can be stimulated through the easing of restrictions on trade and development, and if Trump gets elected, some of that is likely to happen. If the dems get elected, forget about it.
I think that this will be a rather long malaise, with "investors" resting on their laurels bestowed by rising asset prices. There will continue to be consolidation in many areas, and M&A will be how businesses raise their share price and valuation, but on the whole, it will be tough going, maybe just enough to offset inflation. Call it stagflation if you wish to be trite. We need to look at the Japanese experience and find out how not to fall into the trap, even though we have followed them down the QE road.
Here's the thing: I think that it will be unavoidable. Unavoidable. It is something that needs to happen. Countries and economies have seasons. The newest expectation has been ratcheted down to "capital preservation" from "capital gain", meaning roughly that household wealth, household buying power, will not rise going forward, and could very well decrease due to inflation and increases in taxation.
You, and everybody who thinks as you do, in terms of defined milestones in a personal economic trajectory, need to take these things into account. Those defined milestones only have meaning insofar as the existing context, or something roughly like it, prevails. I don't believe it will. You and I might get lucky with timing, but we are still interested in what happens after 15 or 20 years. That's a L-O-N-G time, Flagpole. I am already effectively retired, and I still worry about it.
I worry most about US capital levies. I have already taken steps to protect against this. You will see tax creep continue. HRC has already suggested lowering the estate tax exemption by around $2M. The next thing you will see, especially if the dems win, will be increases in CG, and more restrictions on what qualifies and at what level.
My advice to you is to have more than 3 years available, and in a form in which you control it and have access to it as you wish.