59yo, $2M+, 1yr salary buffer: Retire now or wait with market volatility?

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  • #95304 Reply

      Feeling anxious given that recent pullback (last few weeks) cost me nearly a year’s salary. Recovering several months worth the last couple of days hasn’t made me feel much better. Thankfully I have a pretty fair amount stashed in the retirement accounts but I am selling small slices of most of my stocks to get to where I have about a year’s salary in cash in the retirement accounts.

      For context I am 59 and therefore this isn’t exactly “retire early” for me but I am trying to assess whether I can retire or at least take a six month break from gruelling jobs that aren’t scratching any itch I have, even though the money is good. 59.5 comes before the end of the year, I can start to draw on what is really rather more than 2m (for context I have a 12 year old and a mortgage of about 1m right now, par for the course where I live).

      #95305 Reply

        Likely, gains from October 2023 through March 2024 gave you two years’ salary, the past 2 weeks took away one of those years’ salaries, then the past two days gave you back 3-4 months. So. in 7 months your gains are 15 months of salary.

        Regardless, you know what you’re invested in. You’ll stay invested for the next 20-30 years….drops of 10% will happen. If you can’t stomach that in your Tech fund, there are much safer places to put your money, but you’re returns will pale in comparison.

        Have you considered what your investment profile would look like in your decumulation phase of your life? If these big swings concern you now, they’ll really concern you once you’re 100% retired.

        #95306 Reply
        Pi Eliza

          With 2M in the market, 10% swings will be 200k. It’s just math. In retirement, you should have 3-5 yrs of living expenses in HYSA. That should protect you against the first 5 years in case of major drops. Then diversifying 70/30 more risk index funds and lower risk index funds should keep you going. Dividends help but they typically don’t grow as well as total stock market.

          Paying off all debt before retirement also helps to protect you against shocks. Buy all big ticket retirement needs like a car, new roof, HVAC, water heater. Those will last you a good 20 years and best to be done before retirement.

          Related: I am 43 and not sure if I should retire now or not?

          #95307 Reply

            You should be able to with 2M saved. Don’t stress over it. How much is your monthly payment in the 1M mortgage?

            How much of your 2M is in ROTH?

            Not to be morbid, but living to 80 is a gift and not everyone gets that gift. So, you could be looking at only ~20 good years. Best to start enjoying it sooner rather than later.

            Your investments will recover. Don’t worry.

            #95308 Reply

              The more I had in investments, the less these moves bothered me. I FIREd at 56. I’m 59 now. The stock market is being unusually quite if I don’t gain or lose at least $10,000 in a given day. A $100,000 move up or down in a month is also not surprising.

              What really matters to me is simply how much my annual budget is of my investable assets. Right now that metric is about 3.05%. That leaves me plenty of breathing room. Indeed, I’ve been looking at giving more of my money away while I’m alive so the state won’t get to claim as much in estate taxes when I eventually die.

              #95309 Reply

                RELAX this is why index wins people think to emotionally to properly do stocks. The market will swing you buy low and sell high or remain consistent buying no matter what it’s doing… Master your FEAR but it is important to have reserves true.

                I recommend reading mastering fear it’s not a book about investing but it will apply.. soft skills leverage hard.

                Suggested: Is it possible for a single woman aged 50 to retire comfortably in the US with $1 million?

                #95310 Reply
                JT Doc

                  It didn’t cost you anything if you didn’t sell anything. If that slight (and normal) pullback makes you anxious, then your portfolio is far too risky. Other than that, you need to be excited about pullbacks and buy in more while prices are on sale.

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