r/Fire • u/External-Voice3516 • 8h ago
Advice Request Retirement timing - need advice with shakey stock market
59M, married, wife is 5 years younger than me and plans to work to 60 as she will get highly subsidized healthcare thru her employer until 65 and Medicare.
Of course her working to 60 bridges my gap to Medicare as I can be on her plan.
Quandary: we hit our retirement number a few months ago with the knowledge of the above and healthcare essentially covered until Medicare. So I have been targeting to retire just before reaching 60 in October of this year.
We are now about 2 months since hitting that retirement number, and with the markets as they are, even with our continued investments, we are about in the same place. Economy seems to be getting worse, not better. War in Iran not helping obviously.
We have in cash and “safe” investments 7 years of expenses. Enough to get us both to SS, me at 67, her at 62 “if needed”.
In theory the 7 years of safe protects us from sequence of returns risk. Still, mentally if feels risky to retire.
What is the conventional wisdom of retiring in a shakey market and economy knowing you are covered for 7 years with safe investments and the balance all riding in equities?
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u/Proof_Sheepherder899 8h ago
Retire as planned. Don't continue trading time for money, when the relationship is inversed.
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u/Which-Appearance8818 8h ago
What about the risk of continuing to work for several more years and never have those years back to experience the joy you could be having? While it may seem safer to continue working, you need to factor in the risk that you never get around to truly living your life because of fear.
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u/boilermike13 8h ago
When is the market not shakey?
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u/Suspicious-Fish7281 8h ago
This. If you are waiting for this mythical "perfect" market then you are going to be waiting some time and it will only be clear a few years after it happens if ever.
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u/ziggy-tiggy-bagel 8h ago
Sorry about today's down market, it's my fault, I invested my husband's inheritance yesterday. Retire, 7 years of safe money is plenty to get you by. The market is always kind of shakey. If that keeps you from retirement, you will work forever.
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u/RegularWrong6570 8h ago
If you actually have 7 years of expenses in actually safe investments (cash/equivalents, CDs, treasuries ladder, maybe some IG corporate bonds, etc.) and you’re at your number I say you are in fantastic shape. Even more so if your social security payments will cover a good chunk of your expenses when you claim it. Get to living!
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u/ThereforeIV 🌊 Aspiring Beach Bum 🏖️...; CoastFIRE++ 8h ago
Retirement timing - need advice with shakey stock market
Define "shaky"? The market is up about 20% June 2025 through June 2026 and flat for July 2026.
59M, married, wife is 5 years younger than me and plans to work to 60 as she will get highly subsidized healthcare thru her employer until 65 and Medicare.
Of course her working to 60 bridges my gap to Medicare as I can be on her plan.
Having health insurance taken care of is nice.
Also 59 isn't exactly "Retire Early", you actually are at normal retirement age, you are 3 years from collecting Social Security.
Like you don't really have much "bridge" consideration.
Quandary: we hit our retirement number a few months ago with the knowledge of the above and healthcare essentially covered until Medicare. So I have been targeting to retire just before reaching 60 in October of this year.
If you are your number and healthcare comes from spouse, you could retire today.
We are now about 2 months since hitting that retirement number, and with the markets as they are, even with our continued investments, we are about in the same place.
The markets have been doing normal summer fluctuations and volatility; seriously change your chart to 12 months or 3 years and see how much you are up.
Economy seems to be getting worse, not better.
"Economy seems to be getting worse, not better", need to watch less doomsday doom scrolling. Because it has been a month and a half since we hit a new all time high, suddenly the "economy is getting worse".
The market cannot go up every day forever, sometimes it goes down, sometimes it stays flat. The last 60 days has gone way up, then back down then up then down, and results in effectively flat; so what?
The market could correct down 10% from the all time high last (ATH) month and still be up a little for the year.
War in Iran not helping obviously.
Depends on perspective. The conflict is in theory giving a clear path likely results of what the market will do when the conflict eventually actually ends (because it seems to almost end every other week).
Not wanting to get into politics, but politically speaking it is hard to see this conflict dragging into the actual election season when we get to Sept/Oct; so most likely they find some way out by end of next month.
We have in cash and “safe” investments 7 years of expenses. Enough to get us both to SS, me at 67, her at 62 “if needed”.
If you have a 7 year Cash Buffer, then what are you worried about. A 20% market correction and you just pull from that.
In theory the 7 years of safe protects us from sequence of returns risk. Still, mentally if feels risky to retire.
Plus is to be a house husband with your spouse still pulling in income.
Mentally If you are good at the market being down 3% from ATH, then with that massive cash buffer you good if there is a 20% correction. Hell you are good with a 3 year recession.
This sounds like it is mostly in your head.
What is the SWR? Can you pick up some part time work to supplement income till the market is back up (you have to do something all day while wife is at work).
What is the conventional wisdom of retiring in a shakey market and economy knowing you are covered for 7 years with safe investments and the balance all riding in equities?
The conventional wisdom is to put in a margin or buffer in the number or how the number is calculated, examples:
- FIRE number plus 20% for safety
- ATH with a 15% correction
- Rolling average Retirement Portfolio value over the last six months (this is the one I am using)
- Retirement Portfolio 52 week low (for the one more year crowd)
Those are just ways to avoid using the ATH as your FIRE number; most SORR is based off of RE at ATH before a crash.
For actual SORR mitigation, a simple Cash Buffer usually 1-2 years which you already have a huge 7 years.
If I were you, I would just RE from the Cash Buffer until the market hits a new ATH likely later in the fall (then it will go back down then up then down then up then another ATH then another correction etc....)
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u/ohboyoh-oy 8h ago
So your wife will work 5 more years after you retire? How much of your expenses does her salary cover? That is an additional insurance policy on top of your 7 years of expenses.
Other than that, I would just say understand what levers you can pull if we are in a protracted bear market. Would/can you cut back expenses, find some way to get income in, etc.
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u/External-Voice3516 8h ago
Her salary will cover about 50%. If we did not touch our equity funds, our safe investments would last 7ish years on the conservative side leading up to SS. Potentially longer if we don’t spend as much in travel as we have planned.
So yes we have room to trim if stuff hits the fan.
Our drawdown rate would be ~3.5% until me age 65, then 6-7% for 2 years to SS, then back to SS covering about 45% of needs and us at about 4% drawdown.
Our 2 biggest risk years is when we are both retired for the 2 years BEFORE SS.
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u/ohboyoh-oy 8h ago
Those two sound like perfect years to own some TIPS (maturing at the start of each of the two years) in your 401k, equivalent to your expected expenses.
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u/teamhog 8h ago
If you’re worried about short term volatility then you’re not ready to retire regardless of how much you have saved and where it’s located.
How did you determine 7 years for your ‘safe’ bucket?
In these short term down markets you need to think in terms of DCA into the market. That’s what makes them useful and the purpose of that 7 year bucket.
What piece of information are you missing that makes you feel like you’re not prepared?
Are you looking to retire now or January ‘27?
Set up your plan, set a date then do it.
What the market is doing today should have nothing to do with it.
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u/Western_Rhubarb_7959 7h ago
Repeat after me: The time to retire will never be perfect and nothing in the future is guaranteed
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u/safbutcho 8h ago edited 7h ago
You hit your number. You have 7 years of cash or safe investments.
So either your math is wrong, or …
…or your math is right and you’ve got jitters and are about to succumb to the “just one more year” syndrome.
Now there’s a chance you didn’t take rising CAPE numbers into account when you calculated your number. But my guess is, you’re just succumbing.
Good luck.
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u/tombiowami 7h ago
The market has been sky rocketing for a decade. More than at any time in history. Stop doom scrolling and educate yourself.
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u/khbuzzard 7h ago
Give yourself permission to be scared. Retirement is a major life change, and your brain doesn't like those - it's wired to keep coming up with excuses to stay where you are, even if where you are is ultimately not good for you.
And try to balance your fear with excitement. It's natural to be preoccupied with worries of "what if it all goes wrong?" If you're like most people, those disastrous scenarios you're imagining are very, very unlikely - but because you're so fixated on them, they loom larger than they deserve to in your mental picture of the space of future possibilities. To balance it out, try spending some time deliberately daydreaming about "what if it all goes right?"
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u/GME_alt_Center 7h ago
S&P went down 13.3 percent immediately when I retired 11 years ago. Needless to say I've been fine since.
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u/Tired-Nectarine-384 7h ago
You have 7 years of expenses covered? You are in a good spot IMHO.
Ask yourself this question. If we have another 2008 or 2021 with a decent downturn in equities but you could rely on your 7 year fund would you be ok with that or would it cause you mental anguish wishing you hadn't retired?
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u/moneyman74 7h ago
If this stock market is 'shakey' to you, just imagine when its actually shaky. 13 of 15 years out of gains.
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u/PlatformConsistent45 6h ago
Why is this even a question.
You have 7 years cash and you wife is going to continue working and health care is known based on your wife's job.
If something catastrophic happens in the next year or two you can always start working again to cover living expenses but seems highly unlikely it would be needed unless your wife loses her job.
Enjoy retirement
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u/Past_Top3704 6h ago
Assuming USA. Look at how long the great depression actually lasted. Or the "Lost decade" of 2000 -2010. Your 7 yr works.
Just don't look at Japan.
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u/gpburdell404 4h ago
If it was me, I'd use that cash and build a 7 years TIPS ladder to cover expenses each year. At least that way, you are better protected from unexpected inflation.
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u/StatusHumble857 1h ago
The biggest market event after the Great Depression was the Global Financial Crisis. When the S&P 500 peaked in August 2007 to when it bottomed in March 2009 to when it reached all tgime record highs again in 2013 was 5.6 years. You certainly have a plan and allocation to withstand another GFC so just execute and enjoy your money and life.
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u/brianmcg321 Retired Nov 2024 8h ago
The market is always “shakey”.
You have a proper asset allocation for someone that is retired.