Didn't push my date out, actual pulled my date in forward. I just signed my Early Retirement paperwork this week, will be retired by the end of 2022. Yes our portfolio is down nearly 20%, but we also are sitting on about 4 years cash and thus I fully expect the market to recover well before we need to begin selling any investments.
@@bradk7653 Thanks for sharing. You're in the home stretch! Is it the cash position that gives you the confidence to pull in your date or are are other factors as well? Best wishes to you
@@TwoSidesOfFI Our cash position definitely helped, but we also have a special needs "child" (20 year old) and between the stress of that and a stressful job, when my company offered an early retirement it just made sense. I can't eliminate all of our stress but I can minimize it. Very much enjoy your talks.
My retirement date was two years out, but health issues made my decision to retire now. My last day of work is 11/11/2022. I did not meet my portfolio goal, but it is what it is. I am at peace now and have already realized the stress I was under at my job. Life is and will be good!
Mine was two years out but portfolio weakness has made me reconsider. The repercussions of job stress on my health is real though. Respect your decision and wish you the best.
My husband and I retired early, (both of us at 56) the month of January 2022. Weeks before the ole stock market took the first big slip-n-slide to the bottom back forty. Yep, we sat in our RV for our first big "retirement" trip, and panicked. My husband, and I had to come to terms with an "adjustment". We did not want to draw down on our investments in this market. We had 4 years of living expenses in our savings account and a CD. We paid everything off. We budgeted, we are a bit frugal naturally, and that helped. After 4 months of a wooden roller coaster financial ride, I went back to my employer and asked if they needed PRN or "as needed" help at the hospital I had worked for. They agreed that I could work when I wanted and take time off when I wanted, too. My Husband is looking at a contracting job with his last employer, part time. Now our goals are to work under a certain amount of hours to keep our tax status and income low, so we can keep our health care with no or low premiums. We are able to leave when we want, and work when we want. We won't have to touch the invested money while we work this "side hustle". Yeah, we went back to work less than 20 hours a week with flexible time away, (we are in AZ now, on our way to Florida-3 months away from home) But honestly, we have really enjoyed it, I missed my work and so has my husband. I think we have the best of both worlds. Hang in there! The answer will come to you! FLEXIBLE is GOOD. Take Care! We love your channel!!
Thanks so much for sharing your story, Katie. As Karsten Jeske and others in our community have pointed out, flexibility is one of the most powerful tools we have. Best wishes to you and your husband and thanks so much for your support!
From reading your rational thought process and team based communication,and humor. I don't see you guys ever having issues as long as you keep that flexibility and roll with what life gives.
I've got more than a dozen years on you guys (retiring when I turn 62 in April 2023), so I'm not really your target audience. But I subscribe to and enjoy your episodes for the financial ideas and frank talk you both bring to this topic, which are essential for folks planning to retire early or anytime. Thanks very much for all you do. P.S. - Eric, I can only imagine your frustration, but please don't label yourself or anyone in your shoes as having "failed." In addition to Jason's response to that comment in the episode, I would add that both of you - like all of us - are doing all you can to look out for and to create the best life possible for yourselves and your families amid challenging circumstances. You should be proud.
This is one of the best and most honest conversations I’ve seen. I am in a similar place and can relate to the disappointment but also like the agility of thought. I think in life we can plan as much as we want, but there will always be curveballs. It’s the ability to adapt and hedge for those risks that will make any long-term plan resilient. Good luck to both of you and thank you for this great blog!
Cheers, Heidi...well said! I've adapted to buying low again and the idea that I'm loading the spring for the inevitable market rebound. Wishing you all the best on your path! -Eric
Its so nice to hear someone put into words how I've been feeling. My cause may be slightly different, but it has been what feels like a perpetual cycle of one more year from unexpected large scale expenses. To top it off the more I learn the more I feel underprepared. Thank you for sharing your struggle, it helps to not feel alone in ours. Be well.
I hate instagram "wisdom" in general, but one post essentially said, "if your worst case scenario (working for 3 extra years) is the same position as the most fortunate individuals in society (working as a professional in a fairly lucrative field) youre in good shape. I LOVE the transparency in all of you guys conversations. Truly inspiring.
Good episode, Eric and Jason. I think Jason really nailed it on the head about balancing quality of life in the present with the goals. I'm basically your age and I don't plan to retire till around 60, so I have another 10-12 years. I like my work quite a bit so I am lucky, but I think it's important to recognize that counting down to a date is like working for the weekend or vacation. It makes you less focused on improving your day to day existence. I think for people with our types of personalities, there can be such a thing as too low a discount rate. But chin up, Eric. I'm sure it'll be there soon. Enjoy the time with your sons and our time. Whe knocking on 50 may not seem young, we'll never be this young again...
This is exactly why I enjoy this channel. It’s one thing to know what we should do and think when the time comes that we have to deal with volatility. But it’s another to be actually living it and I think you do a great service to let us in on that conversation, one I’m sure is occurring in sooo many households right now. The honesty in your struggle is somewhat comforting, in that is definitely a shared experience for many of us. I believe the insights that come from that struggle will also be ultimately interesting and helpful. I’m sometimes not sure where to place the highest priority. Should it be on that magic retirement number or the time I might have left to spend it? I’m a good 15 years older than you guys, so my “time balance” is winning out over any specific “retirement balance”. But I know I’m fortunate to be able to think that way.
Thanks for sharing your story. I know this feels like a huge set back but hopefully it will only be a small blip before your long and successful retirement. My wife retired in 2021 and I am retiring when I turn 55 in the spring of 2023. We have pensions that cover half of our expenses and will have 4+ years of cash to get us to 59.5 when we can start accessing retirement accounts. We are down about 20% but even at today’s valuation we are at a sub 4% withdrawal rate (not including the cash we have set aside). Confident there will be recovery over the next 4 years. Best wishes for a speedy market recovery for all of us!
Im just 29 months into our FIRE Journey, but I talk to people way ahead in their journey...I believe that what we've experience this year has been considered in all the FIRE literature. The portfolio will rebound and youll get to your fire number before you know it. My estimate retirement date is June 2026. And Im actually excited about this year because we are buying so much more shares. And it will probably rebound and we'll be so ahead.
Thanks, Inea. These are excellent points. And when you're years away, taking advantage of this buying opportunity (which Eric is doing too!) is essential + will pay off in the long run. Best wishes to you.
This is an important topic -- thanks for having the guts to air what you are going through. As a mom with a grown son, I also send hugs to your boys who will probably pick up on your (Eric's) disappointment. Retiring at 55 years old would probably have felt like a huge victory before you set your aggressive FI goal. I wonder how much Covid had to do with that goal? What I hear now is a desire for balance in your life. Best wishes with the "life plan" re-design and hope it brings more nuanced satisfaction. I have truly enjoyed your channel. It's a beautiful production. Thank you for your hard work and creativity!
I always appreciate your honest conversations, but this was particularly touching and cuts close to many of us listeners in the same situation. My only advice is to be grateful for what you have, family, health and the ability to retire early. My contemporary GenX friends in Tokyo have suffered from 30 years of stagflation and basically no wage growth for 30 years. Over there, it’s either you work forever or forced into a super lean FIRE when they tap on your shoulder. Count your blessings, Eric, that you are NOT in that hell hole and be able to do what you love as your day job. 😅
I loved the planning discussion. It brought to mind a D Day metaphor. It all started with a good plan then bullets started to fly. Like those hero’s… adapt and over come the best you can. Use your community and don’t give up the pursuit. Consider your options. Sometimes a new plan is the best choice.
Exactly the same situation. Initial plan to be in comfy Fire position by end 2024 and portfolio tanked(losing all my contributions+bonus+etc put in as I “average down”). It’s so hard to feel great about buying “discounted shares” when the bigger chunk from original investment is massively red. Yes I also thought of downgrading my retirement lifestyle but figured that’s not the original plan. So still sorting it out as we ride through this market together. You are not alone, be strong (telling myself too 😂)
I love this honest video and I am sure many people are in the same position. You are still miles ahead of most Americans and are lucky that you have these choices. ❤❤
Love your channel. I am not a candidate for FIRE by any means as my husband and I are well over the age of 48 to 50. We will shortly be forced right or wrong to retire the conventional way yet Erica even if your date of FIRE does slip a bit you still have in you grasp the ability to reach FI a decade earlier than most. What an amazing feat is that, not sure you are seeing that right now.
Eric, use this time to reconsider your risk tolerance. Also, remember that money is for protection from poverty. Since you will need cash in the future, save your cash buffer while the market resets. Since life is not promised to anyone, focus on enjoying each and every day of life you have with your wife and children, and continue saving for your future plan. Timelines can be moved.
Great conversation, very relatable. I quit my career the end of April this year, so that has clearly been less than optimal timing. My plan has and still continues to be to find seasonal/baristaFIRE type work each year to continue semi-retirement. I think being flexible and the ability to pivot is important.
I think you shouldn't make any changes - I always assumed there would be a big market drop right after I retired and was ready for that - and then it happened right before I retired (which was 2 months ago), so what is the difference? I think when the fed is done raising rates, there is going to be a solid rally getting the market close to its peak within the next two years. Of course you'll have the benefit of seeing whether that's true but I think 2024 I still going to work for you. Love the content!
Thanks for your support and optimism, John. We appreciate both! And belated congratulations to you on your retirement! Best wishes to you in all things.
Hi Eric, just a random guy on the internet but have you thought of bringing in a junior partner to your practice? They would have a great boost to the start of their career and you could focus on the things you love about the business and disengage on your terms. This could allow you to ‘coast’ into RE at a controllable rate. Just a thought. On a separate note, I appreciate you sharing your raw emotion that shows some real strength. At times I think of a quote, “Things are never as bad or as good as they seem.”. All the best with you updating your plan.
Hi, Hayden Mellowship...thanks for sharing your thoughts, there's lots to consider for sure! My current plan is to phase-out client work and focus on mentoring via my other YT channel (30X40 Design Workshop) and building my stable of online architecture courses. I do love that quote, in the content creator community they say, "You're never as good or, as bad as they say!" Thanks again for taking the time to comment!
Eric, I can relate although our situations are very different. I am older (57) and have one high school freshman and two college students. My wife and I still work although I think to be fair, we already reached FI we just haven't reached peace with that concept. I've been wanting to stop working, but haven't done so yet. I'll probably wait a little longer given the current state of the market and economy. Everything you express about how you feel, what you think, what your options might be resonates with me. It is tough to let go of the goal date. Trust your accumulated knowledge, your resourcefulness, your planning and preparation. It serves you well regardless of the state of the economy and the markets. You always have that going for you.
I retired in Feb this year, so right in the middle of the downturn…so I’m enjoying it from both sides of FI. I love watching your show and one of the key learnings I took from your discussions is that you cannot time the market. And therefore we should never try to do so. But we still can assume that in the long run the market will grow considerably and hence the concept of a save withdrawal rate. So I do not believe there is a reason to change plan as long as it is based on starting once you reach your number…whenever that will be…and then stoically applying a reasonable pre defined withdrawal rate.
Thanks, Rob. We're really glad you're finding value in the show. And a belated congratulations to you on your own retirement! Sticking with the plan is certainly a tenet of Bogleheads and one I definitely embrace. Best wishes to you in all that's to come. -Jason
Thanks for the honesty guys. I have been wondering when some of the FIRE bloggers will be honest about the market and its impact. Most FIRE personalities make money on content and are not actually drawing down. They sell a product and not the real experience. You guys buck that trend and I appreciate it. While I am still a ways out and my portfolio is getting hammered.
Jason here - thanks, Andrew! I can tell you for sure that this guy is drawing down! :) We really appreciate your support. Keep enjoying buying at these sale prices and when the recovery comes you'll see all the benefits. Best wishes to you
I’m watching this a year after you made it and it’s an excellent discussion. Although markets have improved, it’s a question I ask myself often. I was originally planning on retiring in 2025 at 55, but I’ve moved to a job that I enjoy, so my headspace is no longer about getting away from the job, but wanting time to do the things that the daily grind doesn’t allow me to. My head tells me to carry on working for an extra year as I now enjoy my job, but my heart wants the 2025 date to start doing the things I want to.
We retired in July, and part of our plan was to sell our house in Texas and to relocate to Spain. The timing of our house sale worked out very well for us. The only significant change for us was that I originally planned to quickly dump our house proceeds into a high dividend stock portfolio I'd created - instead we're slowly investing it in (ie $4k a month vs $1K a day). with the remainder of the cash sitting in a high interest savings account. Another very fortunate situation for us is the relationship between the US$ and the Euro - it's like a painless 20% cut to our expenses. Overall so far, it seems like a wash for us.
Never really comment on anything, but this was an interesting and important episode I feel. I am on the road (and I am definitely less of a controlfreak then perhaps either of you) but I have chosen to work less now (3 days a week). I believe in the value of writing things down, getting your number, setting a date, planning and even planning the things you want to do. Having said that, I've done none of these things, I have general ideas, but not a explicit bulletlist of everything written down. Hindsight being always easy, exactly those items are fantastic in a bull market where you speed to your goals, but the future is and will always be uncertain and facing a bearmarket, potential protracted wars, climate change, insane inequality there is a chance you have to face all the added dissapointments of writing things down so explicitly. (And obviously also the change that in a year you are straight back up to your FI number) I also dont know how long this 3 days a week thing will last or if I ever have to go back to 5 before retirement. But there is a balance between leading a good life, planning for the future and mortality. Might be very superficial, but I like vague terms such as "less work" and "enough money" & "more time" without fully defining what that is. (The only thing is that I regularly look at our monthly income and expenses to determine if we are still "in the green", but even that is a fluid zone)
An awesome episode. You've become the leading podcast in this field in my eyes. I'd be curious if you could get Michael Kitces for example on the show and have him provide more data to support continued working vs pulling the plug. I recall him commenting that most FI folks have over-conservative approaches. Either way, thanks for putting this content out there.
Thanks so much, Yochai Paz. That's very high praise and we're humbled by your comment. We're glad that you find so much value in our content. Wow, Kitces would be a dream guest. Maybe if enough of you tweet at him he'd consider talking with us? :)
I retired in May 2021 and have so much I could say... But after all is said and done, you have to plan so you can handle a drop like we've experienced *starting* on Day One of your retirement. To keep it simple, ensure you can live on 4% of a **20% drop** in your portfolio. Most people stop when their FI number provides 4%. But you actually need to save more, and also have that pile of cash and fixed income established from Day One. Once the market drops, it's too late to scramble and build that up.
That's the key, if you're not on Day 1 it's a completely different problem and requires a different approach. The preFI (Eric in accumulation-mode) and postFI (Jason in asset protection-mode) situations solve for very different things. If Eric's preFI plan was fully ready to transition (i.e. - FI number achieved and buckets 1/2/3 full) then it's sensible to execute on the plan (3.3% w/r + enough cash to ride out a 5 year slow recovery). However, that's very different to the current situation where the market drops 20% and effectively moves those preFI an additional 20% (plus annual contributions) away. Can't execute the plan if you haven't reached the number yet.
Enjoyed the conversation! Hubs and I are traditional retirement age but thinking through many of the same issues. Big difference: you have time on your side!
Thanks for your honesty. It just goes to show how truly emotional investing is. Don't get down on yourself, you certainly haven't failed. I'm still earlier on in the FI process, and I can imagine how frustrating it would be to have to recalibrate ones mind to a fresh date or goal that is further out in time.
There's an old saying "Cash is King". There's nothing wrong with piling up cash while you review the best options for your investments, because no matter what you do end up deciding there's a big pile of cash that will boost and support that decision.
Full steam ahead! It is true that markets are down, and the horizon doesn't look much better a year out. I imagine many have changed or altered plans and expectations. We are still committed to Jan of 25. 55 remains the goal for both healthcare and 401K access. This is where having pension income really helps to bridge the market uncertainties. Good luck with your revised plan and I hope it rights to your original plan in a year or so. As for me I am staying the course.
Good conversation guys. Don't dispare that you're alone in these second guesses. A lot of us mentally going through the same questions in our heads. Delaying gratification sucks. Personally, I keep telling myself, "3 years from now, we'll all be looking back thinking, 'I wish I had more money to put into the market back then.'" I will also say, this is a great opportunity to really sit with your sons and show them, in real time, how hard work and diligent planning may still not get you everything you want in the end. And that this is how you accept/adapt to it like a man, including doing things you'd rather not have to do.
What an awesome way to take a grey cloud and use it as a model of virtue for your kids. Love it. Young people have the burden of not seeing a real bear market in their lifetimes (and I mean anyone under 40!). My old boss liked to tell clients that when he started in the business, in 1974, the market struggled so much that it only regained that level after 20 years (10 years down, 10 years up). Once you retire you have to think like an insurance company and match your short and long term liabilities. Pensions are awesome but they are taxable and do not adjust for inflation, so make sure you address that in another asset class. Have a ROTH account with enough money to buy a car when you are 75 (no reason to put yourself into a new tax bracket for that). Consider the possibility that public Companies will reverse the trend of spending on share buybacks and start using new issuance to pay the bills. I can remember a time when to buy a house you would assume the mortgage of the current owner because you couldn't afford the current rates. These last 2 examples are to show that we always find a way. Another good lesson for a young man ; )
I am not changing my plans to retire at the end of April, 2023. You have to be ready for these conditions at any point of your retirement. It just happens to be at the beginning of mine. I can see if you hadn't already started transitioning to retirement how it could push it out though. Fortunately, I had already moved to a 65/35 stock to bond allocation and had started building up my cash reserves with a plan to build them even further before my retirement date. I also moved my bond allocation into CDs during this rising interest rate environment. I'll move them back to bonds once the interest rates stabilize. I do not plan to touch any of my equities until they have recovered.
Nothing wrong with changing your mind or changing plans. It's times like this where I go back to recommending income producing real estate. The absolute value of your portfolio or equity is irrelevant. If you have enough post tax income coming in from your real estate investments your net worth principle is irrelevant. Once you hit the number that will cover your monthly or annual expenses, maybe a little bit more for buffer, boom you are early retired and financially independent.
In my mind, my FIRE date is continually evolving. Not only is my portfolio down, but inflation has raised my expenses 25%, increasing my number. The only real plan I stick to is my savings goal. I can forecast my FIRE date based on assumptions, but you know what they say about assumptions. I was also a few years out. Stay the course. Kike any good roadtrip, you never get there when you planned, but the journey itself is half the fun.
Yup, same boat here Eric! Unsettling, but not a problem. I am grateful for what the world is offering me today, and what comes will come eventually. My dividend ‘pension’ might have less volatility but your approach is well thought out, stick with it.
Great conversation as always!...I get what Eric is going through, the current general situation we are living in is playing with the plans The way I see it, the focus is on the "FI number" , maybe a certain % over that ;-) , and not on a specific date, having a date is good to keep you focused and all, but for me the real trigger for "RE" is when you reached that specific FI number, the rest is just trusting all the calculations, and studies, etc. ... just my two cents 😁 Keep on sharing with us this journey, and stay the course Eric Thanks guys!
I totally empathize with your situation. For me, there is just some 'its my time' factor... Kids are off to college, parents don't need help right now. Money situation being perfect or not, I just have to go for a while! Quitting W2 work in January, recession, bear market, whatever! Also, have two years of expenses in a laddered CD portfolio 🤞
There are many levers to pull when it comes to finances, lifestyle and retirement. The biggest being savings rate, portfolio allocation/returns, investment strategy and my personal favorite spending/lifestyle. For every expense there are multiple alternatives that are not only less expensive but better and the key is finding what works the best for you. This lends great flexibility that allows you to see adversity as opportunity whether it's the last few bananas going bad meaning you get to make awesome banana nut muffins or a market downturn equaling a huge buying opportunity, no matter if you dollar cost average or time the market as equities are on sale. Even if you decide to work a few more years, you can use that time to bolster your net worth, squeeze a bit more out of your employer sponsored benefits, make more detailed retirement plans and ever began to set up your post retirement lifestyle by getting things started. That maybe setting up hobbies such as putting together your wood working shop or perhaps buying/building a cabin in the woods or whatever floats your retirement boat...including buying a boat or classic muscle car. Cheers!
Thank you for being open and vulnerable to having this tough conversation. Couple things I’d like to throw into the mix: 1.) As mentioned, the psychological factor is huge in your peace of mind. Could you reframe your position as a better one by realizing that if the market had shifted just post 2024 (your FI date), it could have been worse as you would have retired right into a bear market after stopping income producing activities? 2.) Could you look at investing into other vehicles instead, such as rental real estate? Not an easy thing to do, and it takes lots of research and the acquisition of new skills, but rental income could potentially help you keep your FI date intact.
Thanks, Gerardo...appreciate the support! I agree the current market, such as it is, sets us up for a more successful launch into retirement even if it's delayed by a few years. Instead of rental real estate, I have my business which will continue to earn passively after I retire so, that's where I'm investing efforts for the next few years. Thanks again for sharing your thoughts and for watching 2SFI! Cheers, Eric
So I chose this year to scale back my work and ‘nearly’ retire. Our net worth since has dropped by the equivalent of more than our first 10 years of total saving. I am making the most of this by doing aggressive roth conversions right now while the market is discounted. This should greatly cut my exposure to RMDs down the road. Another thing that helps me is to see what a huge run up we experienced the last few years. This year is only shaving off a couple of years worth of growth, and as JL Collins says, the market always goes up- it will come back eventually
I’m at the point of stockpiling cash with a target retirement in 290 days. I’m willing to adjust my RE lifestyle somewhat, but like you I may stick around in my job just a little longer. You’re clearly disappointed by the market and delaying your RE, but my thought is that we are in far better position than 90% of people so I’m grateful regardless of any setbacks. I’ll keep working the plan and ride through the bumps.
Glad I watched out of chronological order--coming back in time to here from some of the more recent 2024 episodes. Here, Eric's frustration is plain as day. I actually think the timing couldn't have been better--we've come to see that you took Jason's advice from this episode on finding help offloading the least enjoyable parts with your business--and look at things have changed now in 2024. Yes, it looks like you might not be calling it quits quite yet, but for such different reasons!
Maybe reduce workload, work park time, ease into the entire FIRE thing for a couple of years. Maybe it is good enough to coast into your number, earn enough to cover expenses and let your FIRE fund grow on its own for a while.
Jason here - thanks for sharing. Yes, this is what we were referencing in our discussion re: a glidepath into RE or even a BaristaFIRE path. It's definitely a viable path and many choose it.
That's good one Doso777. I'm going to reach tradicional FIRE by 2025 but will be coasting cause the paycheck is great and I'll be able to do whatever I want with my money. I'm considering take a month off every 4 months to rest and travel as well as go to fancy places here and there as save a 20% of paycheck to raise up my emergency fund for 5 years instead of 2 😅😅😅
Just relax a little You've got 2 more years a lot can happen in 2 years. I know your looking to hit a specific number but maybe having a little cash on the side would have eased your mind a little about your situation. It does mine. Just put my notice in 10/28 will be retired on 2/1/2023 and so far no second thoughts or concerns about it being the wrong decision for me. I decided in June of 2021 to make this my last year so I made sure I had 3+yrs. in cash and cash equivalents and now I'm glad I did. Just a thought. Your a smart fellow just think on it a while and I'm sure you will figure out something that works best for you. No need to rush and don't make a decision based off fear or worry. Steve
Steve - you beat me by a few days, I just signed my retirement paperwork on 11/3, and will be done working at the end of the year. We have 4 yrs cash, and have plenty of time for the market to recover before I have to sell any investments. Most people will find that they can live on less than they think, they set too high of FI number and cause themselves to work for too many extra years just to feel secure.
Retired last Jan.@56. My husband Retire date was suppose to be in April/May 2022. But because of the market.. we are also down 15%. But honestly, we had a plan. 2-3 yrs plus in Cash bucket to manage through a market downturn. Hubby is still working only because of me Freaking out.😂 Some days I tell myself we will be fine. YOLO! Right?! Everyone has to live through a recession or down market. Its inevitable to happen sometime during 25-30 yrs of retirement. If you love your job, keep going , stick to the date and just review in 6 months thats what we are doing.
Ioved the discussion on deferred gratification, it is one of the common criticisms of FI: too much pain now for a greater tomorrow. There is a lot of merit to looking at your number as what it takes to maintain your current standard of living. Take European vacations now if you plan to do so in retirement, and vice-versa.
Thanks. We're glad you liked it. Very true, and one that some truly take to extremes. For sure, both Eric + I elected a chubbyFIRE path for that very reason. Best wishes to you.
Appreciate the candor. Some of us are in the exact same boat. Some of our boats are submarines at this point (I'd kill to have only a 18% drop). Also hard when your job has commitment points.
I am less worried about date ... I have a plan, but there is a +/- component to it. I am more worried about what happens after. It will be a vacation for the first 6 months, maybe a year, but eventually I am going to have to find meaning and purpose for the - fingers crossed - thirty or more years of retirement ahead of me. It sounds easy, but I have witnessed others crash and crash hard. Anger, frustration, bitterness, and scariest of all, sudden accelerated aging. I am focused less on the actual day of transition and more worried about all that time afterwards! I want to love every minute of it, but it still frightens me.
We share similar fears... In some ways, reaching the number is the easiest part, it's a mathematical exercise. The other components are much more difficult to solve for.
I'm 100% right there with you. My more conservative spouse asked me a year ago to delay retirement for "just one more year". Well with inflation, down markets and tanking bonds we're now committed to working through 2026. At that time I can access 403b without penalty. And, if the portfolio is still underwater at that point we have decided that our " fun money" will need to come from part-time work. I can't earn enough to backfill my portfolio. I can reduce work stress now and I can use some of my earnings to do things I might not afford once retired. It's a big disappointment but not a failure.
Thanks for sharing...I really like your reframing, "a big disappointment but not a failure"...wishing you all the best as you continue to execute on the plan! I'm pulling for you... -Eric
Great show. I am also targeting 2024 for retirement, although I will be 60. No pension, so need to live off investments. I have moved from bond funds to 5 years of bond ladders. Hard to say how many years of fixed income people need, but I think I will be adding a 6th year vs invest more in index funds when I accumulate more. Hoping the market snaps back, but also preparing for a longer duration if needed.
Great episode. I'm sticking to my plan, coast to FI. Earn enough to cover annual living expenses, let my investment buckets do their thing, and take mini retirements at least once a year. I'm at more than 75% toward my FI number, and will reach FI as soon as we recover from this economic funk. I'll continue to work part-time and/or temp jobs after I reach my FI number.
We're not making any changes. We put every paycheck into the asset allocation outlined in our IPS. It's no fun to see our NW decline after contributing 6 figures this, but what else can we do? This just gives stocks a higher expected return than they had last year, so we are loading up on the sale!
Great. And particularly for those earlier on their journey / farther from their own RE aims, it's amazing to (eventually!) get to see the benefits of buying at these sale prices. Best wishes to you
I really related to this conversation. Wife and I are 35 and I have always been a 90/10 type of investors (started investing in early twenties) after a 27% downward swing this year. I've been able to maintain the investing style so far, but I definitely relate to the emotion of wanting to be more conservative now when you should just stay the course. We had targeted retirement before 40. Current retirement target has had to move to 43 due to the market hit.
I had almost gone into an early retirement this year , but then had to push the decision at least until the market starts a recovery.. was lucky to have an opportunity come along which is stable enough during this market..hardest thing about stopping work is you can’t take advantage of the opportunities in the market during these times .. think of it as an extra year or two will set u up for more success down the road .. if bear market prolongs for several years like that , then obviously a consideration should be made towards lifestyle changes
I think retiring into a down market is a heck of a lot better than retiring at the top of a market. 2 years is still a ways to go and invest as much as you can while you are working. The markets I think will be back by then. And if not, youll be in a better position then to decide. Retiring in a down market is ideal if you can.
Totally agreed and we've talked about this in the past as well. My memory isn't what it used to be, but I believe it was in the follow-up to holding cash th-cam.com/video/woXhiMOFkMU/w-d-xo.html -Jason
Re: Backing down your saving. What if you keep the saving as is and the market recovers sooner, you can re-adjust and retire at that point sooner than 5 years. If you back off the saving and the market does not recover all you are out is a few extra meals out and trips to vegas as examples.
For sure...it's easier for me to save (esp. in a down market) than it is for me to ramp up the spending. Sticking to the plan and hoping for the faster recovery!
Would add 2 things to the discussion based on my experience… 1. Likely the expenses will be, or more importantly can be for the same satisfaction, lower than you plan. Would be interesting to viewers if you talked about the expense side of things. 2. Likely you will eventually have some side hustles for income and fun. Good to produce and not just consume in early retirement after the honeymoon period lol. Like your yt channel for instance. Sounds like you are having fun in your current situation though. Here’s hoping to a better 2023. Cheers
Eric I understand your frustration as I am the same age and in exactly the same position. I’m in the UK not US but have run into the same problems. It’s demoralising to see your goal disappear due to a downturn. I have not yet found a magic way out of this and have had to suck up and move my date back 18months with a potential for further delays if this starts to pan out like 1970’s stagflation. Hang in there. My wife doesn’t have the same patience I have and is moving to 3days a week but when I’m done working I’m done so I will grin and bare it full time.
Eric - be kinder to yourself. Your losses will come back. Your win is the investment plan you and Laura put in place, not the date. I retired in 2020 after we reached our goal, but my husband continued to work to reduce the risk in case of a downturn. This was a decision we reached along the way. You have so many options with Laura as a partner.
I enjoyed Eric's openness about how he would probably have to push his FI date back. I wish this video touched on how the downturn this year has affected Jason at all (i.e. concerns about SORR, lowering SWR for a bit til the market rebounds, etc.)
Jason here - glad you enjoyed it. We elected to focus on Eric's experience and I still think this was the right move. But I do understand the value in hearing from my side of FI. Honestly, I'm feeling OK and not really making any conscious changes. I'm still well below my CAPE-adjusted safe withdrawal rate so there aren't any modifications to be made there at this point. I would say I think about SoRR slightly more but I know that's just emotions as the math is on my side. There are no guarantees of course, but at least compared to all date we have for over 200 years, I should be ok.
Thank you, thank you, thank you! It's great to know there are others in a similar position. I was planning on retiring earlier this year (right before I turned 50) and was even a bit ahead of my number... then we all know what happened. My portfolio is down over 20% and retirement is on hold indefinitely right now. Not my favorite thing to keep working, but I do take some consolidation that I'm buying in at much lower prices right now and 10 years from now I'll probably be in an even better position than originally planned.
Cheers, Antonio...we were tracking the same it sounds like, ahead of schedule and then: 2022 happened. Wishing you all the best as you execute on your plan. -Eric
Hang in there…… have been thru a few downturns…. Even worse than the current downturn. I know you’re closer to your dream FI date but the market will rebound. Just keep on doing what you have been doing! I am heavy tech stocks/equities so am down 25+ percent YTD
I delayed (July was my original date) and I generally don’t love work but like portions of it. My advisor says I’m still OK but I’m super conservative with money and I need to sleep at night. I didn’t feel that I had enough cash built up to weather this and there are just too many variables right now. I was able to go to 4 days a week (32 hours) and that has been great and gets me used to less money - still contributing same to 401K to take advantage of the down market. I will re-evaluate in Feb/Mar after bonuses and 401k matches. I may pursue dropping down another day to work 3 days if they will let me. Keeping the health insurance is a big benefit
I know this is emotional challenging to continue to see your portfolio decline. Just a thought exercise here...what if you continue investing as per your original plan until your planned retirement date in 2024 to take advantage of the reduced price on equities. At that point you can see to what extent the market has recovered to see if you are ready to retire or another option would be to take your foot off the gas at investing or stop all together and let the market do the work at recovering your portfolio. You could just work at the pace for your day to day expenses to be covered until the portfolio has returned to the place that you are comfortable starting to draw on it. That way retirement could be more of a transition instead of date that you are done working.
Not changing anything. Planned for market crashes like this and so no worries. Knowing that to date, the longest bear market lasted 2.9 years with avg ones lasting about 14 months. So we planned for more than that. Having close to 5 years living expenses in cash to ride out these down turns and build back cash when investments are growing again is great peace of mind. Having everything paid off, live on very little. Our big spend is travel. We blow almost as much money on that as we do household spending. So we have wiggle room if we need to do any belt tightening. Good luck to you. Don't sweat it too much. You got this !!
This episode hit on so many things I had to login to my computer to write this because I am about 89% sure this is going to turn into a novella 😀. This is a great episode and I know how tough putting this stuff out there can be, so kudos for doing that. * Personally I have not seriously considered pulling the trigger on 'retirement' until both the kids are done with college and on their way with their adult lives. There are so many variables with having a family that I could never wrap my head around the people that hit their FIRE number and then have kids. Insurance, tuition, sports, activities, trips to the ER, trips to your favorite theme park and the 1,000 other things that go into raising kids are just too many variables for my wee little brain to handle. I have a few (4-ish) years left until #2 is on his way to being on his own. Barring a powerball win tomorrow. I'll find a way to retire by the end of the year if I win!! You were talking about hitting your FIRE date when you have a kid just starting college. I would say if that was realistic you are in a very blessed position. * One of my former bosses has often said "there is success, and there is learning". I am with Jason on his comment about the word "failure". No plan survives first contact with the enemy. Well, the enemy is at the gates, we all need to adjust. For anybody that has taken those surveys over the years about "what kind of investor are you?", this is a good time to go review those and see how current market conditions compare to when you took the quiz, what the results were and what you are actually doing now. How much do you love risk and volatility? * I've always been more focused on the number than the date. So the fact that my portfolio has gotten smaller like all of our portfolios has not filled me with the same amount of frustration that it has some that had the date more fixed. Is it frustrating? A bit. But I'm continuing to buy like I always have and am being as aggressive as I can (with the amount, not the individual assets) with new purchases now. * You have been nothing but consistent and clear on your thoughts about dividend investing. I plan on having a good chunk of my post-work income coming in from dividend stocks and there are some SCREAMING BARGAINS out there right now. So I'm happily buying away. Hell, even MSFT is yielding over 1% and if you look at some of the yields on various dividend aristocrats, pick a bank out of a hat, etc, some of them are historically high. I feel pretty good about plowing what money I can into the market right now. Have we hit the bottom? Probably not. Am I buying quality for less than I was 6 months ago? Definitely. At this point if the market goes down more, I'll be getting things even cheaper. If it stays even I'm making a meaningful return with the dividends I'm getting paid. If it jumps back up, break out the champagne and get the dancers out on stage. If things get much, much worse, we all have bigger problems. * As you talked about here, I'm looking at chipping away the things that make work and life in general a grind. Barring any dramatic changes (some of which others have alluded to in comments here such as health issues, job loss, etc.) I'm trying very hard to count my blessings and keep plugging away, secure in the knowledge that I am doing the best I can and being mostly sure it is the right thing. My family is healthy, I don't hate my job, we've got a roof over our head and food on the table. Just about everything else is window dressing. I know things are pretty frustrating right now. But fundamentally speaking you are in a good place. Keep plugging away. You'll get there.
Thank you for your truth, sharing and emotion! Working at a crappy ole job to defer ssa! Never had to worry about this type of situation until I received an inheritance ! Tough sitting on your hands waiting! “The things I worried about most in life never happened” Chin up
You said it: "I Love what I do." But I learned that I can love what I do somewhere else, for myself, or in a different way. If you love what you do and are in a fairly stress-free environment, staying put is reasonable. IMO, It is easy to calculate FI, but RE is truly only obtainable when you are under your calculated 4% withdrawl rate, and actually safer when closer to 3% (Like Jason).
Jason here - Thanks, Steven. Very true, hence our probing around the idea of a glidepath via modifying Eric's work. From my perspective, he definitely loves what we does and gets a lot of fulfillment from it. I felt the same about my own career, so I totally get it. I think the three of us are also well aligned on WR. I can't emphasize enough the freedom that comes from knowing you are safely withdrawing well below what one "could" do. It sure helps me sleep at night, and as you've likely heard, Eric is planning on being below his calculated SWR as well.
I’m 52 and I was planning on pulling the trigger on my retirement plan in January 2023. The new plan is to delay until January 2024 or 2025 if needed. It is soul crushing but I’d rather delay than retire into a bear market and be a basket case.
Thanks for sharing your honest views, concerns and plans. I don't even have a number or date yet but I enjoy watching and listening. Perhaps mine is a naive view but you should be happy and proud of what you've already achieved; plans don't always go as... "Planned!". If you step back and really think about it, it's just maybe a couple of more years doing what you're doing (and love). That's a very fortunate position to be in... I'd maybe now reduce a little your aggressive saving rates and enjoy more the present (and the next couple of years) ! 👍🙏
I hadn't even started to invest when I was your age. Now in this downturn I went into it with 15 years worth of cash to live on. So I was prepared for 15 years of downturn. It only lasted a year.
I started looking at retiring when I was about 52yo. The plan was to retire at 55yo. Once I got to 54yo, it wasn't happening, so I pushed it out to 56yo. Things kept coming up to cause me to push it out further. I finally pulled the trigger, and retired June 2021 at almost 58yo. Have been focused on learning the finances better the past year and a half, and diversifying dollars across different areas better. Now with all my stocks/ETFs down, and cryptos down, I'm still fine, but wouldn't want to sell any in this market. So will now start to build up a little more cash to keep from having to sell investments in a down market. Will probably put some into stocks/ETFs in 2023 figuring it's a down market, and will eventually go back up at some point. But will just be building more of a cash position at this point probably. I was lucky that I was happy working where I was, but was also getting to a point of burnout, and was ready to move on. My situation may be a little different, though - I don't have a huge cushion in investments, cash, etc... but do have a decent CALPERS retirement, and it provides some extra for me to keep putting some into investments now in retirement. Will probably look for some kind of extra dollars to bring in from hobbies different than what my career was in, though.
In 2021 it was easy to run retirement income projections and walkaway with amazement at what seemed possible. The problem was we were in an accommodative environment where the Fed made money really cheap. Obviously that part has changed, and the effect on interest rates in relation to P/E ratios has caused equities to dip. But I have good news for you. Run those retirement projections again in this environment. Find a solution you can enjoy, that has a timeline you can accept, and sleep well knowing that this time you're most likely going to hit your goal, or even finish early.
I was offered a package to retire from work after 22 years but I turned it down knowing that if enough people did not leave I would be let go without any retirement package... Luck was on my side and more left the company than was originally calculated. Now I am 65 and a half and still working .. I have bought several fixed income annuities with income riders that will provide me income for my lifetime to give me a base income to cover all my living expenses. .I work with less stress and hoping when economy crashes I will be offered another package of one year salary plus 12 weeks vacation... Enjoying the journey
I was surprised at this episode because I would have preferred Eric's position. I'd rather have the bear market come when I'm still employed so I have the flexibility to change my date. If it came in five years after you hit your number in your original plan you're basically screwed. My only guess is Jason shifted his allocation mix to less risky assets after retiring so he wasn't hit as hard? Anyway I'm under 40 and don't have anyone in my peer group like this. Thanks for sharing your experiences and being like the virtual older brothers I never had.
Jason here - the scenarios are different. Yes, I'm down less than Eric and most pre-FI people, because I have a higher % of bonds+cash. That said, I'm still down a lot for the year. But the plan was built to bear that. The challenge for Eric and many others, is that they have been working towards an estimated FI date. Yes, they still have lots of flexibility because they're still working, and in fact will benefit a lot financially from all the "sale price" buying they are doing today. And as he said, for sure it's better to have this downturn happen while you're still earning vs. just after you've pulled the RE trigger! But it doesn't make it feel any better when you've had a finish line in mind and it moves on you. And that's what a lot of what our discussion was about. Thanks for your support!
@@TwoSidesOfFI Jason, this is the exact reason you have the cash and fixed income buckets and your path is the perfect example of that. Fingers crossed that the market bounces back while you still have plenty in your cash and fixed income buckets. I did have a question on the buckets - as you are filling them, what is the determination of which buckets o fill first (or are we supposed to be filling them in proportion to the final desired proportion)? If you wait for the cash bucket to be filled, you may never fill the equities bucket! Just when I think I have it figured out, there seems to be another level of complexity! Allocation, location, prioritization.
@@KG-oe8oo Precisely. I refill the cash bucket as a part of my twice a year rebalancing. My thoughts on cash holding approaches have come up before, including the episode on holding cash (th-cam.com/video/HXeCHpFo8Ps/w-d-xo.html). I'll talk about this a little more in an upcoming episode! -Jason
My husband and i have a target retirement date of May 1 2023. After making an extra $100,000 in 2021 we chose to pull from the markets ( People say not to do this but has worked for us) and do not regret our decision because our portfolio is still in good shape we can still retire in May of 2023.
Glad to hear you're on track for your date - congrats! Can you share your thoughts on how you decided to pull from the markets? Do you mean that you withdrew some, changed your allocation, or something else?
@@TwoSidesOfFI Sorry! i should have clarified we actually transferred to cash or a stable income fund that is what its called, because of this we are only down 8% on our losses. We are continuing to add to the portfolio from our pay until we retire. We are retiring at 61.5 so not really early retirement.
At some point there is a leap of faith. The market may fall before or after the retirement date. The plan meet some flexibility. Also, it is t a failure if we need to get a part time job or live more frugally for periods of time. I think you should plug away at the plan and see what happens.
Wonderful content as always. Eric, you might consider retiring from the portion of your role that now feels heavy. You’ve shared that your passive business is meaningful and that your wife enjoys her work. Maybe you could transition away from client work as a kindness to yourself. Doing so might allow the remainder of your stamina to be applied to a longer career timeline without feeling like a failure. (As a note, you are one of the world’s wealthiest people. Hard to imagine that that represents failure to those in the world with less. You clearly seem to know this.) Be kind to yourself in general. Kind regards. Good luck.
Cheers, Jonathan...thanks for sharing your thoughts. In the weeks since we originally recorded this, I've committed to transitioning away from client work. There's an identity piece (am I still an architect?) that will take some time to work through, but we're all works in progress, right? I think the nature of people who strive for big goals and to create impactful work in the world is to not compare themselves to those who may have less, but solely to want to do more; to achieve more. I'm hopeful too that it doesn't discount or diminish the perspective I have knowing I am fortunate to even be contemplating such things. Wishing you all the best...
Yes, we certainly are all works in progress. Congratulations on your decision to move away from client work. It is demanding. You’ll always be an architect. The impact of your training and experience will modulate to let you make and build in new ways. Your impact is your art. The delight in your voice when you shared in this episode what it feels like when a project has flow was compelling. Many of us have enjoyed such a moment. I’ve had the pleasure of contributing to decades long projects that concluded successfully and offered both psychic and commercial benefit. Soul and wallet. Meaningful work. The best kind. You will no doubt find lots more of the same. Enjoy the journey. I look forward to your next installment. Kind regards.
Definitely a challenging time, and hearing your thoughts of Lloyd and discussed is really helpful. At the same time, without a crystal ball, the numbers you are looking at are projections only. The market could ramp back up, and your DCAs now could have significant future value. Is there a thought to holding the retirement date now, waiting a little longer to pull the trigger on your FI date?
We quit full time work earlier this year in April, with about 2 years of living expenses in cash, and a $34k HELOC to work with. Even though things were not perfectly rosy at the time, we decided that it was worth it to go ahead and quit. We have enjoyed all of this time that we have been spending with our now 1 year old. Without trying much at all, we typically have been earning about 40% of our living expenses (~22k/ year) every month since then. We are just staying a little bit more conservative with our spending than we might be if the market was elevated. It’s a hard decision to make for your family, good luck with it. We leaned more towards spending our time how we want, rather than worrying about what the market has done to our portfolio and how tight money could get. We have flexibility.
Zach, this is such a great perspective. As I head toward my FI I often wonder if I will continue to earn "some" money as I feel like my natural tendency for activity will lead me this way. Maybe we need a new acronym of FI+PT (Financial Independence + Part Time) :)
Thanks for sharing, Zach. And thanks for your support as well! Glad to learn you're finding value in the content. I bet you discovered very quickly just how much value you can ascribe to the time freedom you gain through RE. Best wishes to you in all things. -Jason
When I saw my 401k & IRA portfolio (stocks/ETF/bonds) take a hit during the last 2009 downturn, I realized I needed to make a change in my allocation going forward. So I converted 30% of my portfolio into real estate assets. I also took another 30% into dividend stocks and do weekly stock option trading which provides at least 1% weekly income. The remaining 30% are still managed by Fidelity and 10% cash in high yield savings. This change allowed me reach my FI faster and allowed me to retire early in Dec 2021. The monthly income from my rental properties, real estate syndications, dividend income and option trading help replace my W2 and fund vacations and things without the worry of depleting my portfolio.
I'm in a similar boat. At this time last year I thought I would leave on Easter 2022 (leaving in the spring is optimal for me). I had more money than I have now. That, combined with high inflation, has forced me to re-evaluate my number. If markets go back to ATH, I'll leave by Easter 2023, otherwise one more year, till 2024. I have changed how I invest by putting half of my new contributions in high interest cash and the other half in my typical stock/bonds ETFs. The idea is to build a nice cash cushion to make sure I don't get screwed again by market conditions when I want to leave, and still keep buying stocks low, just at a slower pace than before.
Same age and FI date as you and I believe very similar FI number and similar professional life (control freak - can't easily scale down due to client demands). Looking at it, if we reach our number, even in this down market we will just have that much more upside. The concern is the near term but we are stockpiling cash in this last year or two in order to weather the immediate market downturn. Leaves a concern as to what happens if market downturn lasts more than 2-3 years but keep coming back to the reason for FI - burnout and want to enjoy time without stress and accomplish some other goals. With that in mind, we are willing to deal with short term austerity if needed. Appreciate hearing your perspective on our similar FI journey
Thanks for sharing this, @Rayce Dykstra ...it's a comfort to know others are in similar position! Congrats and best wishes on the path ahead, keep me posted... \m/ eric
My date has not changed, just waiting for the calendar year that I'll turn 55 (2025). I look at it this way, I had double digit gains for 2019, 2020 and 2021, so a big decline this year is fine. It all averages out.. I live in Maine as well and have very low fixed expenses, so I can be flexible with my withdrawal strategy.
I went back and watched the episode by the doctor who provides death care and his approach to thinking about FIRE and at least for me that really made me feel a lot better and come up with some other paths.
Even though it feels bad now, in some ways it's good. If not RE yet, we can now buy shares at a discount and avoid the sequence of returns risk had the bull market lasted a couple more years. I think recency bias led a lot of people to plan for the happy path only. These types of downturns are common, so it's a good reminder to account for them in our plans and expectations.
Thanks, Nick. For sure, and as discussed Eric continues to buy at these sale prices. Recency bias certainly is a real thing. It's easier for all of us who have weathered these before, of course. On the same note, it can't help but be disappointing when you have even a rough plan tied to a date/year and that needs to likely change.
Are you changing your retirement date based on market conditions? Let us know in the comments as we'd love to hear from you.
Didn't push my date out, actual pulled my date in forward. I just signed my Early Retirement paperwork this week, will be retired by the end of 2022. Yes our portfolio is down nearly 20%, but we also are sitting on about 4 years cash and thus I fully expect the market to recover well before we need to begin selling any investments.
@@bradk7653 Thanks for sharing. You're in the home stretch! Is it the cash position that gives you the confidence to pull in your date or are are other factors as well? Best wishes to you
I was thinking probably age 53 but moved it approximately to 57. I really don't know it's 5-10 years in the future
@@TwoSidesOfFI Our cash position definitely helped, but we also have a special needs "child" (20 year old) and between the stress of that and a stressful job, when my company offered an early retirement it just made sense. I can't eliminate all of our stress but I can minimize it. Very much enjoy your talks.
@@bradk7653 Thanks, Brad. Best wishes to you and your family. We're very appreciative of your support.
My retirement date was two years out, but health issues made my decision to retire now. My last day of work is 11/11/2022. I did not meet my portfolio goal, but it is what it is. I am at peace now and have already realized the stress I was under at my job. Life is and will be good!
Sorry to learn of your health issues. We wish you all the best for your physical and financial health.
Mine was two years out but portfolio weakness has made me reconsider. The repercussions of job stress on my health is real though. Respect your decision and wish you the best.
@@deannad3566 Thanks for sharing, Deanna. We wish you the best for physical, mental, and financial health.
All the best. I am not the only one who has found outgoings in retirement lower than expected. This will hopefully work in your favour!
Good luck I hope you enjoy your retirement!
My husband and I retired early, (both of us at 56) the month of January 2022. Weeks before the ole stock market took the first big slip-n-slide to the bottom back forty. Yep, we sat in our RV for our first big "retirement" trip, and panicked. My husband, and I had to come to terms with an "adjustment". We did not want to draw down on our investments in this market. We had 4 years of living expenses in our savings account and a CD. We paid everything off. We budgeted, we are a bit frugal naturally, and that helped. After 4 months of a wooden roller coaster financial ride, I went back to my employer and asked if they needed PRN or "as needed" help at the hospital I had worked for. They agreed that I could work when I wanted and take time off when I wanted, too. My Husband is looking at a contracting job with his last employer, part time. Now our goals are to work under a certain amount of hours to keep our tax status and income low, so we can keep our health care with no or low premiums. We are able to leave when we want, and work when we want. We won't have to touch the invested money while we work this "side hustle". Yeah, we went back to work less than 20 hours a week with flexible time away, (we are in AZ now, on our way to Florida-3 months away from home) But honestly, we have really enjoyed it, I missed my work and so has my husband. I think we have the best of both worlds. Hang in there! The answer will come to you! FLEXIBLE is GOOD. Take Care! We love your channel!!
Thanks so much for sharing your story, Katie. As Karsten Jeske and others in our community have pointed out, flexibility is one of the most powerful tools we have. Best wishes to you and your husband and thanks so much for your support!
From reading your rational thought process and team based communication,and humor. I don't see you guys ever having issues as long as you keep that flexibility and roll with what life gives.
I've got more than a dozen years on you guys (retiring when I turn 62 in April 2023), so I'm not really your target audience. But I subscribe to and enjoy your episodes for the financial ideas and frank talk you both bring to this topic, which are essential for folks planning to retire early or anytime. Thanks very much for all you do. P.S. - Eric, I can only imagine your frustration, but please don't label yourself or anyone in your shoes as having "failed." In addition to Jason's response to that comment in the episode, I would add that both of you - like all of us - are doing all you can to look out for and to create the best life possible for yourselves and your families amid challenging circumstances. You should be proud.
This is one of the best and most honest conversations I’ve seen. I am in a similar place and can relate to the disappointment but also like the agility of thought. I think in life we can plan as much as we want, but there will always be curveballs. It’s the ability to adapt and hedge for those risks that will make any long-term plan resilient. Good luck to both of you and thank you for this great blog!
Cheers, Heidi...well said! I've adapted to buying low again and the idea that I'm loading the spring for the inevitable market rebound. Wishing you all the best on your path!
-Eric
Its so nice to hear someone put into words how I've been feeling. My cause may be slightly different, but it has been what feels like a perpetual cycle of one more year from unexpected large scale expenses. To top it off the more I learn the more I feel underprepared. Thank you for sharing your struggle, it helps to not feel alone in ours. Be well.
Thank you! We truly appreciate your support 🙏
I hate instagram "wisdom" in general, but one post essentially said, "if your worst case scenario (working for 3 extra years) is the same position as the most fortunate individuals in society (working as a professional in a fairly lucrative field) youre in good shape. I LOVE the transparency in all of you guys conversations. Truly inspiring.
Good episode, Eric and Jason. I think Jason really nailed it on the head about balancing quality of life in the present with the goals. I'm basically your age and I don't plan to retire till around 60, so I have another 10-12 years. I like my work quite a bit so I am lucky, but I think it's important to recognize that counting down to a date is like working for the weekend or vacation. It makes you less focused on improving your day to day existence. I think for people with our types of personalities, there can be such a thing as too low a discount rate. But chin up, Eric. I'm sure it'll be there soon. Enjoy the time with your sons and our time. Whe knocking on 50 may not seem young, we'll never be this young again...
This is exactly why I enjoy this channel. It’s one thing to know what we should do and think when the time comes that we have to deal with volatility. But it’s another to be actually living it and I think you do a great service to let us in on that conversation, one I’m sure is occurring in sooo many households right now. The honesty in your struggle is somewhat comforting, in that is definitely a shared experience for many of us. I believe the insights that come from that struggle will also be ultimately interesting and helpful. I’m sometimes not sure where to place the highest priority. Should it be on that magic retirement number or the time I might have left to spend it? I’m a good 15 years older than you guys, so my “time balance” is winning out over any specific “retirement balance”. But I know I’m fortunate to be able to think that way.
Thanks for sharing your story. I know this feels like a huge set back but hopefully it will only be a small blip before your long and successful retirement.
My wife retired in 2021 and I am retiring when I turn 55 in the spring of 2023. We have pensions that cover half of our expenses and will have 4+ years of cash to get us to 59.5 when we can start accessing retirement accounts. We are down about 20% but even at today’s valuation we are at a sub 4% withdrawal rate (not including the cash we have set aside). Confident there will be recovery over the next 4 years.
Best wishes for a speedy market recovery for all of us!
Hear hear, Greg! Best wishes to you and your wife.
Im just 29 months into our FIRE Journey, but I talk to people way ahead in their journey...I believe that what we've experience this year has been considered in all the FIRE literature. The portfolio will rebound and youll get to your fire number before you know it. My estimate retirement date is June 2026. And Im actually excited about this year because we are buying so much more shares. And it will probably rebound and we'll be so ahead.
Thanks, Inea. These are excellent points. And when you're years away, taking advantage of this buying opportunity (which Eric is doing too!) is essential + will pay off in the long run. Best wishes to you.
This is an important topic -- thanks for having the guts to air what you are going through. As a mom with a grown son, I also send hugs to your boys who will probably pick up on your (Eric's) disappointment. Retiring at 55 years old would probably have felt like a huge victory before you set your aggressive FI goal. I wonder how much Covid had to do with that goal? What I hear now is a desire for balance in your life. Best wishes with the "life plan" re-design and hope it brings more nuanced satisfaction. I have truly enjoyed your channel. It's a beautiful production. Thank you for your hard work and creativity!
Thanks for your support, Mary Ann. We appreciate it
I always appreciate your honest conversations, but this was particularly touching and cuts close to many of us listeners in the same situation. My only advice is to be grateful for what you have, family, health and the ability to retire early. My contemporary GenX friends in Tokyo have suffered from 30 years of stagflation and basically no wage growth for 30 years. Over there, it’s either you work forever or forced into a super lean FIRE when they tap on your shoulder. Count your blessings, Eric, that you are NOT in that hell hole and be able to do what you love as your day job. 😅
I loved the planning discussion. It brought to mind a D Day metaphor. It all started with a good plan then bullets started to fly. Like those hero’s… adapt and over come the best you can. Use your community and don’t give up the pursuit. Consider your options. Sometimes a new plan is the best choice.
Exactly the same situation. Initial plan to be in comfy Fire position by end 2024 and portfolio tanked(losing all my contributions+bonus+etc put in as I “average down”). It’s so hard to feel great about buying “discounted shares” when the bigger chunk from original investment is massively red. Yes I also thought of downgrading my retirement lifestyle but figured that’s not the original plan. So still sorting it out as we ride through this market together. You are not alone, be strong (telling myself too 😂)
All very true. Best wishes to us all in working through this time. Take care
I love this honest video and I am sure many people are in the same position. You are still miles ahead of most Americans and are lucky that you have these choices. ❤❤
Love your channel. I am not a candidate for FIRE by any means as my husband and I are well over the age of 48 to 50. We will shortly be forced right or wrong to retire the conventional way yet Erica even if your date of FIRE does slip a bit you still have in you grasp the ability to reach FI a decade earlier than most. What an amazing feat is that, not sure you are seeing that right now.
Eric, use this time to reconsider your risk tolerance. Also, remember that money is for protection from poverty. Since you will need cash in the future, save your cash buffer while the market resets. Since life is not promised to anyone, focus on enjoying each and every day of life you have with your wife and children, and continue saving for your future plan. Timelines can be moved.
Great conversation, very relatable. I quit my career the end of April this year, so that has clearly been less than optimal timing. My plan has and still continues to be to find seasonal/baristaFIRE type work each year to continue semi-retirement. I think being flexible and the ability to pivot is important.
Thanks, Jeremy. We agree 100% on your recommendations. Best wishes to you
I think you shouldn't make any changes - I always assumed there would be a big market drop right after I retired and was ready for that - and then it happened right before I retired (which was 2 months ago), so what is the difference? I think when the fed is done raising rates, there is going to be a solid rally getting the market close to its peak within the next two years. Of course you'll have the benefit of seeing whether that's true but I think 2024 I still going to work for you. Love the content!
Thanks for your support and optimism, John. We appreciate both! And belated congratulations to you on your retirement! Best wishes to you in all things.
Hi Eric, just a random guy on the internet but have you thought of bringing in a junior partner to your practice? They would have a great boost to the start of their career and you could focus on the things you love about the business and disengage on your terms. This could allow you to ‘coast’ into RE at a controllable rate. Just a thought. On a separate note, I appreciate you sharing your raw emotion that shows some real strength. At times I think of a quote, “Things are never as bad or as good as they seem.”. All the best with you updating your plan.
Hi, Hayden Mellowship...thanks for sharing your thoughts, there's lots to consider for sure! My current plan is to phase-out client work and focus on mentoring via my other YT channel (30X40 Design Workshop) and building my stable of online architecture courses.
I do love that quote, in the content creator community they say, "You're never as good or, as bad as they say!"
Thanks again for taking the time to comment!
Eric, I can relate although our situations are very different. I am older (57) and have one high school freshman and two college students. My wife and I still work although I think to be fair, we already reached FI we just haven't reached peace with that concept. I've been wanting to stop working, but haven't done so yet. I'll probably wait a little longer given the current state of the market and economy. Everything you express about how you feel, what you think, what your options might be resonates with me. It is tough to let go of the goal date. Trust your accumulated knowledge, your resourcefulness, your planning and preparation. It serves you well regardless of the state of the economy and the markets. You always have that going for you.
I retired in Feb this year, so right in the middle of the downturn…so I’m enjoying it from both sides of FI. I love watching your show and one of the key learnings I took from your discussions is that you cannot time the market. And therefore we should never try to do so. But we still can assume that in the long run the market will grow considerably and hence the concept of a save withdrawal rate. So I do not believe there is a reason to change plan as long as it is based on starting once you reach your number…whenever that will be…and then stoically applying a reasonable pre defined withdrawal rate.
Thanks, Rob. We're really glad you're finding value in the show. And a belated congratulations to you on your own retirement! Sticking with the plan is certainly a tenet of Bogleheads and one I definitely embrace. Best wishes to you in all that's to come. -Jason
Thanks for the honesty guys. I have been wondering when some of the FIRE bloggers will be honest about the market and its impact. Most FIRE personalities make money on content and are not actually drawing down. They sell a product and not the real experience. You guys buck that trend and I appreciate it. While I am still a ways out and my portfolio is getting hammered.
Jason here - thanks, Andrew! I can tell you for sure that this guy is drawing down! :) We really appreciate your support. Keep enjoying buying at these sale prices and when the recovery comes you'll see all the benefits. Best wishes to you
I’m watching this a year after you made it and it’s an excellent discussion. Although markets have improved, it’s a question I ask myself often. I was originally planning on retiring in 2025 at 55, but I’ve moved to a job that I enjoy, so my headspace is no longer about getting away from the job, but wanting time to do the things that the daily grind doesn’t allow me to. My head tells me to carry on working for an extra year as I now enjoy my job, but my heart wants the 2025 date to start doing the things I want to.
We retired in July, and part of our plan was to sell our house in Texas and to relocate to Spain. The timing of our house sale worked out very well for us. The only significant change for us was that I originally planned to quickly dump our house proceeds into a high dividend stock portfolio I'd created - instead we're slowly investing it in (ie $4k a month vs $1K a day). with the remainder of the cash sitting in a high interest savings account. Another very fortunate situation for us is the relationship between the US$ and the Euro - it's like a painless 20% cut to our expenses. Overall so far, it seems like a wash for us.
Where in Spain did you move to? I'm from Spain living in the US and we will be doing the same in 2024
@@LuisCP85 Girona.
@@dopolla1 awesome! Hope you are enjoying Spain so far!
Never really comment on anything, but this was an interesting and important episode I feel. I am on the road (and I am definitely less of a controlfreak then perhaps either of you) but I have chosen to work less now (3 days a week). I believe in the value of writing things down, getting your number, setting a date, planning and even planning the things you want to do. Having said that, I've done none of these things, I have general ideas, but not a explicit bulletlist of everything written down. Hindsight being always easy, exactly those items are fantastic in a bull market where you speed to your goals, but the future is and will always be uncertain and facing a bearmarket, potential protracted wars, climate change, insane inequality there is a chance you have to face all the added dissapointments of writing things down so explicitly. (And obviously also the change that in a year you are straight back up to your FI number)
I also dont know how long this 3 days a week thing will last or if I ever have to go back to 5 before retirement. But there is a balance between leading a good life, planning for the future and mortality. Might be very superficial, but I like vague terms such as "less work" and "enough money" & "more time" without fully defining what that is. (The only thing is that I regularly look at our monthly income and expenses to determine if we are still "in the green", but even that is a fluid zone)
An awesome episode. You've become the leading podcast in this field in my eyes.
I'd be curious if you could get Michael Kitces for example on the show and have him provide more data to support continued working vs pulling the plug.
I recall him commenting that most FI folks have over-conservative approaches.
Either way, thanks for putting this content out there.
Thanks so much, Yochai Paz. That's very high praise and we're humbled by your comment. We're glad that you find so much value in our content. Wow, Kitces would be a dream guest. Maybe if enough of you tweet at him he'd consider talking with us? :)
I retired in May 2021 and have so much I could say... But after all is said and done, you have to plan so you can handle a drop like we've experienced *starting* on Day One of your retirement. To keep it simple, ensure you can live on 4% of a **20% drop** in your portfolio. Most people stop when their FI number provides 4%. But you actually need to save more, and also have that pile of cash and fixed income established from Day One. Once the market drops, it's too late to scramble and build that up.
That's the key, if you're not on Day 1 it's a completely different problem and requires a different approach. The preFI (Eric in accumulation-mode) and postFI (Jason in asset protection-mode) situations solve for very different things. If Eric's preFI plan was fully ready to transition (i.e. - FI number achieved and buckets 1/2/3 full) then it's sensible to execute on the plan (3.3% w/r + enough cash to ride out a 5 year slow recovery). However, that's very different to the current situation where the market drops 20% and effectively moves those preFI an additional 20% (plus annual contributions) away. Can't execute the plan if you haven't reached the number yet.
Enjoyed the conversation! Hubs and I are traditional retirement age but thinking through many of the same issues. Big difference: you have time on your side!
Thanks, Lori! So glad you enjoyed it. Best wishes to you and your husband
Thanks for your honesty. It just goes to show how truly emotional investing is. Don't get down on yourself, you certainly haven't failed. I'm still earlier on in the FI process, and I can imagine how frustrating it would be to have to recalibrate ones mind to a fresh date or goal that is further out in time.
There's an old saying "Cash is King". There's nothing wrong with piling up cash while you review the best options for your investments, because no matter what you do end up deciding there's a big pile of cash that will boost and support that decision.
Full steam ahead! It is true that markets are down, and the horizon doesn't look much better a year out. I imagine many have changed or altered plans and expectations. We are still committed to Jan of 25. 55 remains the goal for both healthcare and 401K access. This is where having pension income really helps to bridge the market uncertainties. Good luck with your revised plan and I hope it rights to your original plan in a year or so. As for me I am staying the course.
Thanks for sharing, Ray. Best wishes to you in hitting that 1/25 goal!
Really appreciate the honesty here. So refreshing.
Thanks!
Good conversation guys. Don't dispare that you're alone in these second guesses. A lot of us mentally going through the same questions in our heads. Delaying gratification sucks.
Personally, I keep telling myself, "3 years from now, we'll all be looking back thinking, 'I wish I had more money to put into the market back then.'"
I will also say, this is a great opportunity to really sit with your sons and show them, in real time, how hard work and diligent planning may still not get you everything you want in the end. And that this is how you accept/adapt to it like a man, including doing things you'd rather not have to do.
What an awesome way to take a grey cloud and use it as a model of virtue for your kids. Love it. Young people have the burden of not seeing a real bear market in their lifetimes (and I mean anyone under 40!). My old boss liked to tell clients that when he started in the business, in 1974, the market struggled so much that it only regained that level after 20 years (10 years down, 10 years up). Once you retire you have to think like an insurance company and match your short and long term liabilities. Pensions are awesome but they are taxable and do not adjust for inflation, so make sure you address that in another asset class. Have a ROTH account with enough money to buy a car when you are 75 (no reason to put yourself into a new tax bracket for that). Consider the possibility that public Companies will reverse the trend of spending on share buybacks and start using new issuance to pay the bills. I can remember a time when to buy a house you would assume the mortgage of the current owner because you couldn't afford the current rates. These last 2 examples are to show that we always find a way. Another good lesson for a young man ; )
I am not changing my plans to retire at the end of April, 2023. You have to be ready for these conditions at any point of your retirement. It just happens to be at the beginning of mine. I can see if you hadn't already started transitioning to retirement how it could push it out though.
Fortunately, I had already moved to a 65/35 stock to bond allocation and had started building up my cash reserves with a plan to build them even further before my retirement date. I also moved my bond allocation into CDs during this rising interest rate environment. I'll move them back to bonds once the interest rates stabilize. I do not plan to touch any of my equities until they have recovered.
Best wishes to you on achieving your April retirement goal!
Nothing wrong with changing your mind or changing plans. It's times like this where I go back to recommending income producing real estate. The absolute value of your portfolio or equity is irrelevant. If you have enough post tax income coming in from your real estate investments your net worth principle is irrelevant. Once you hit the number that will cover your monthly or annual expenses, maybe a little bit more for buffer, boom you are early retired and financially independent.
In my mind, my FIRE date is continually evolving. Not only is my portfolio down, but inflation has raised my expenses 25%, increasing my number. The only real plan I stick to is my savings goal. I can forecast my FIRE date based on assumptions, but you know what they say about assumptions. I was also a few years out. Stay the course. Kike any good roadtrip, you never get there when you planned, but the journey itself is half the fun.
Yup, same boat here Eric! Unsettling, but not a problem. I am grateful for what the world is offering me today, and what comes will come eventually. My dividend ‘pension’ might have less volatility but your approach is well thought out, stick with it.
Jason here - thanks, Paul. Your perspective is a good one and also one on which the three of us are aligned. Best wishes to you.
Great conversation as always!...I get what Eric is going through, the current general situation we are living in is playing with the plans
The way I see it, the focus is on the "FI number" , maybe a certain % over that ;-) , and not on a specific date, having a date is good to keep you focused and all, but for me the real trigger for "RE" is when you reached that specific FI number, the rest is just trusting all the calculations, and studies, etc. ... just my two cents 😁
Keep on sharing with us this journey, and stay the course Eric
Thanks guys!
I totally empathize with your situation. For me, there is just some 'its my time' factor... Kids are off to college, parents don't need help right now. Money situation being perfect or not, I just have to go for a while! Quitting W2 work in January, recession, bear market, whatever! Also, have two years of expenses in a laddered CD portfolio 🤞
Best wishes to you!
There are many levers to pull when it comes to finances, lifestyle and retirement. The biggest being savings rate, portfolio allocation/returns, investment strategy and my personal favorite spending/lifestyle. For every expense there are multiple alternatives that are not only less expensive but better and the key is finding what works the best for you.
This lends great flexibility that allows you to see adversity as opportunity whether it's the last few bananas going bad meaning you get to make awesome banana nut muffins or a market downturn equaling a huge buying opportunity, no matter if you dollar cost average or time the market as equities are on sale.
Even if you decide to work a few more years, you can use that time to bolster your net worth, squeeze a bit more out of your employer sponsored benefits, make more detailed retirement plans and ever began to set up your post retirement lifestyle by getting things started. That maybe setting up hobbies such as putting together your wood working shop or perhaps buying/building a cabin in the woods or whatever floats your retirement boat...including buying a boat or classic muscle car. Cheers!
Such a great conversation! Thank you for your willingness to share, as always!
Thanks, Andrea! So glad you liked it
Thank you for being open and vulnerable to having this tough conversation.
Couple things I’d like to throw into the mix:
1.) As mentioned, the psychological factor is huge in your peace of mind. Could you reframe your position as a better one by realizing that if the market had shifted just post 2024 (your FI date), it could have been worse as you would have retired right into a bear market after stopping income producing activities?
2.) Could you look at investing into other vehicles instead, such as rental real estate? Not an easy thing to do, and it takes lots of research and the acquisition of new skills, but rental income could potentially help you keep your FI date intact.
Thanks, Gerardo...appreciate the support! I agree the current market, such as it is, sets us up for a more successful launch into retirement even if it's delayed by a few years. Instead of rental real estate, I have my business which will continue to earn passively after I retire so, that's where I'm investing efforts for the next few years.
Thanks again for sharing your thoughts and for watching 2SFI!
Cheers,
Eric
So I chose this year to scale back my work and ‘nearly’ retire. Our net worth since has dropped by the equivalent of more than our first 10 years of total saving. I am making the most of this by doing aggressive roth conversions right now while the market is discounted. This should greatly cut my exposure to RMDs down the road. Another thing that helps me is to see what a huge run up we experienced the last few years. This year is only shaving off a couple of years worth of growth, and as JL Collins says, the market always goes up- it will come back eventually
Thanks so much for sharing. Best wishes to you, John.
I’m at the point of stockpiling cash with a target retirement in 290 days. I’m willing to adjust my RE lifestyle somewhat, but like you I may stick around in my job just a little longer. You’re clearly disappointed by the market and delaying your RE, but my thought is that we are in far better position than 90% of people so I’m grateful regardless of any setbacks. I’ll keep working the plan and ride through the bumps.
Thanks for sharing, M Casp. Best wishes to you on achieving your target date!
Glad I watched out of chronological order--coming back in time to here from some of the more recent 2024 episodes. Here, Eric's frustration is plain as day. I actually think the timing couldn't have been better--we've come to see that you took Jason's advice from this episode on finding help offloading the least enjoyable parts with your business--and look at things have changed now in 2024. Yes, it looks like you might not be calling it quits quite yet, but for such different reasons!
Maybe reduce workload, work park time, ease into the entire FIRE thing for a couple of years. Maybe it is good enough to coast into your number, earn enough to cover expenses and let your FIRE fund grow on its own for a while.
Jason here - thanks for sharing. Yes, this is what we were referencing in our discussion re: a glidepath into RE or even a BaristaFIRE path. It's definitely a viable path and many choose it.
That's good one Doso777. I'm going to reach tradicional FIRE by 2025 but will be coasting cause the paycheck is great and I'll be able to do whatever I want with my money. I'm considering take a month off every 4 months to rest and travel as well as go to fancy places here and there as save a 20% of paycheck to raise up my emergency fund for 5 years instead of 2 😅😅😅
@@TheCelmap I was thinking more along the lines of four day work week for the last couple of years.
Just relax a little You've got 2 more years a lot can happen in 2 years. I know your looking to hit a specific number but maybe having a little cash on the side would have eased your mind a little about your situation. It does mine. Just put my notice in 10/28 will be retired on 2/1/2023 and so far no second thoughts or concerns about it being the wrong decision for me. I decided in June of 2021 to make this my last year so I made sure I had 3+yrs. in cash and cash equivalents and now I'm glad I did. Just a thought. Your a smart fellow just think on it a while and I'm sure you will figure out something that works best for you. No need to rush and don't make a decision based off fear or worry. Steve
Steve - you beat me by a few days, I just signed my retirement paperwork on 11/3, and will be done working at the end of the year. We have 4 yrs cash, and have plenty of time for the market to recover before I have to sell any investments. Most people will find that they can live on less than they think, they set too high of FI number and cause themselves to work for too many extra years just to feel secure.
Thanks, Steve. You're in the home stretch! Best wishes to you in achieving all your goals.
Retired last Jan.@56. My husband Retire date was suppose to be in April/May 2022. But because of the market.. we are also down 15%. But honestly, we had a plan. 2-3 yrs plus in Cash bucket to manage through a market downturn. Hubby is still working only because of me Freaking out.😂 Some days I tell myself we will be fine. YOLO! Right?! Everyone has to live through a recession or down market. Its inevitable to happen sometime during 25-30 yrs of retirement. If you love your job, keep going , stick to the date and just review in 6 months thats what we are doing.
Thanks for sharing. Best wishes to you and your husband
Ioved the discussion on deferred gratification, it is one of the common criticisms of FI: too much pain now for a greater tomorrow. There is a lot of merit to looking at your number as what it takes to maintain your current standard of living. Take European vacations now if you plan to do so in retirement, and vice-versa.
Thanks. We're glad you liked it. Very true, and one that some truly take to extremes. For sure, both Eric + I elected a chubbyFIRE path for that very reason. Best wishes to you.
Appreciate the candor. Some of us are in the exact same boat. Some of our boats are submarines at this point (I'd kill to have only a 18% drop). Also hard when your job has commitment points.
Dive, dive, dive !!
I am less worried about date ... I have a plan, but there is a +/- component to it. I am more worried about what happens after. It will be a vacation for the first 6 months, maybe a year, but eventually I am going to have to find meaning and purpose for the - fingers crossed - thirty or more years of retirement ahead of me. It sounds easy, but I have witnessed others crash and crash hard. Anger, frustration, bitterness, and scariest of all, sudden accelerated aging. I am focused less on the actual day of transition and more worried about all that time afterwards! I want to love every minute of it, but it still frightens me.
We share similar fears...
In some ways, reaching the number is the easiest part, it's a mathematical exercise. The other components are much more difficult to solve for.
I'm 100% right there with you. My more conservative spouse asked me a year ago to delay retirement for "just one more year". Well with inflation, down markets and tanking bonds we're now committed to working through 2026. At that time I can access 403b without penalty. And, if the portfolio is still underwater at that point we have decided that our " fun money" will need to come from part-time work. I can't earn enough to backfill my portfolio. I can reduce work stress now and I can use some of my earnings to do things I might not afford once retired. It's a big disappointment but not a failure.
Thanks for sharing...I really like your reframing, "a big disappointment but not a failure"...wishing you all the best as you continue to execute on the plan! I'm pulling for you...
-Eric
@@TwoSidesOfFI thanks! I look forward to hearing how you land too. Keep up the good work!!
Great show. I am also targeting 2024 for retirement, although I will be 60. No pension, so need to live off investments. I have moved from bond funds to 5 years of bond ladders. Hard to say how many years of fixed income people need, but I think I will be adding a 6th year vs invest more in index funds when I accumulate more. Hoping the market snaps back, but also preparing for a longer duration if needed.
Thanks, Roger. Best wishes to you
Great episode. I'm sticking to my plan, coast to FI. Earn enough to cover annual living expenses, let my investment buckets do their thing, and take mini retirements at least once a year. I'm at more than 75% toward my FI number, and will reach FI as soon as we recover from this economic funk. I'll continue to work part-time and/or temp jobs after I reach my FI number.
Thanks, Roberto. Best wishes to you
We're not making any changes. We put every paycheck into the asset allocation outlined in our IPS. It's no fun to see our NW decline after contributing 6 figures this, but what else can we do? This just gives stocks a higher expected return than they had last year, so we are loading up on the sale!
Great. And particularly for those earlier on their journey / farther from their own RE aims, it's amazing to (eventually!) get to see the benefits of buying at these sale prices. Best wishes to you
I really related to this conversation. Wife and I are 35 and I have always been a 90/10 type of investors (started investing in early twenties) after a 27% downward swing this year. I've been able to maintain the investing style so far, but I definitely relate to the emotion of wanting to be more conservative now when you should just stay the course. We had targeted retirement before 40. Current retirement target has had to move to 43 due to the market hit.
Thanks, Shawn. Best wishes to you in achieving all your goals
I had almost gone into an early retirement this year , but then had to push the decision at least until the market starts a recovery.. was lucky to have an opportunity come along which is stable enough during this market..hardest thing about stopping work is you can’t take advantage of the opportunities in the market during these times .. think of it as an extra year or two will set u up for more success down the road .. if bear market prolongs for several years like that , then obviously a consideration should be made towards lifestyle changes
I think retiring into a down market is a heck of a lot better than retiring at the top of a market. 2 years is still a ways to go and invest as much as you can while you are working. The markets I think will be back by then. And if not, youll be in a better position then to decide. Retiring in a down market is ideal if you can.
Totally agreed and we've talked about this in the past as well. My memory isn't what it used to be, but I believe it was in the follow-up to holding cash th-cam.com/video/woXhiMOFkMU/w-d-xo.html -Jason
Re: Backing down your saving. What if you keep the saving as is and the market recovers sooner, you can re-adjust and retire at that point sooner than 5 years. If you back off the saving and the market does not recover all you are out is a few extra meals out and trips to vegas as examples.
For sure...it's easier for me to save (esp. in a down market) than it is for me to ramp up the spending. Sticking to the plan and hoping for the faster recovery!
So on point. Thank you for this discussion!
You're welcome, Patrick! Thanks so much for your support
Would add 2 things to the discussion based on my experience… 1. Likely the expenses will be, or more importantly can be for the same satisfaction, lower than you plan. Would be interesting to viewers if you talked about the expense side of things. 2. Likely you will eventually have some side hustles for income and fun. Good to produce and not just consume in early retirement after the honeymoon period lol. Like your yt channel for instance. Sounds like you are having fun in your current situation though. Here’s hoping to a better 2023. Cheers
Eric I understand your frustration as I am the same age and in exactly the same position. I’m in the UK not US but have run into the same problems. It’s demoralising to see your goal disappear due to a downturn. I have not yet found a magic way out of this and have had to suck up and move my date back 18months with a potential for further delays if this starts to pan out like 1970’s stagflation. Hang in there. My wife doesn’t have the same patience I have and is moving to 3days a week but when I’m done working I’m done so I will grin and bare it full time.
Cheers, Simon...thanks for sharing your story and for the words of encouragement. Wishing you all the best as you execute on your plan!
You seemed stressed. Very sorry. I hope things get better and your stress gets less.
Eric - be kinder to yourself. Your losses will come back. Your win is the investment plan you and Laura put in place, not the date. I retired in 2020 after we reached our goal, but my husband continued to work to reduce the risk in case of a downturn. This was a decision we reached along the way. You have so many options with Laura as a partner.
I enjoyed Eric's openness about how he would probably have to push his FI date back. I wish this video touched on how the downturn this year has affected Jason at all (i.e. concerns about SORR, lowering SWR for a bit til the market rebounds, etc.)
Jason here - glad you enjoyed it. We elected to focus on Eric's experience and I still think this was the right move. But I do understand the value in hearing from my side of FI. Honestly, I'm feeling OK and not really making any conscious changes. I'm still well below my CAPE-adjusted safe withdrawal rate so there aren't any modifications to be made there at this point. I would say I think about SoRR slightly more but I know that's just emotions as the math is on my side. There are no guarantees of course, but at least compared to all date we have for over 200 years, I should be ok.
It looks like flamingo or slow FI is the way to go after all. Good luck all of you with your investments and life plans!!!
Thank you, thank you, thank you! It's great to know there are others in a similar position. I was planning on retiring earlier this year (right before I turned 50) and was even a bit ahead of my number... then we all know what happened. My portfolio is down over 20% and retirement is on hold indefinitely right now. Not my favorite thing to keep working, but I do take some consolidation that I'm buying in at much lower prices right now and 10 years from now I'll probably be in an even better position than originally planned.
Cheers, Antonio...we were tracking the same it sounds like, ahead of schedule and then: 2022 happened. Wishing you all the best as you execute on your plan. -Eric
Hang in there…… have been thru a few downturns…. Even worse than the current downturn. I know you’re closer to your dream FI date but the market will rebound. Just keep on doing what you have been doing! I am heavy tech stocks/equities so am down 25+ percent YTD
Thanks, Ann. Best wishes to you.
I delayed (July was my original date) and I generally don’t love work but like portions of it. My advisor says I’m still OK but I’m super conservative with money and I need to sleep at night. I didn’t feel that I had enough cash built up to weather this and there are just too many variables right now. I was able to go to 4 days a week (32 hours) and that has been great and gets me used to less money - still contributing same to 401K to take advantage of the down market. I will re-evaluate in Feb/Mar after bonuses and 401k matches. I may pursue dropping down another day to work 3 days if they will let me. Keeping the health insurance is a big benefit
Thanks for sharing, @Hilary H...a three-day workweek sounds quite nice! Wishing you all the best with your FIRE plans.
-eric
I know this is emotional challenging to continue to see your portfolio decline. Just a thought exercise here...what if you continue investing as per your original plan until your planned retirement date in 2024 to take advantage of the reduced price on equities. At that point you can see to what extent the market has recovered to see if you are ready to retire or another option would be to take your foot off the gas at investing or stop all together and let the market do the work at recovering your portfolio. You could just work at the pace for your day to day expenses to be covered until the portfolio has returned to the place that you are comfortable starting to draw on it. That way retirement could be more of a transition instead of date that you are done working.
I really appreciate the candid conversation.
Thanks, Matthew
Not changing anything. Planned for market crashes like this and so no worries. Knowing that to date, the longest bear market lasted 2.9 years with avg ones lasting about 14 months. So we planned for more than that. Having close to 5 years living expenses in cash to ride out these down turns and build back cash when investments are growing again is great peace of mind. Having everything paid off, live on very little. Our big spend is travel. We blow almost as much money on that as we do household spending. So we have wiggle room if we need to do any belt tightening. Good luck to you. Don't sweat it too much. You got this !!
This episode hit on so many things I had to login to my computer to write this because I am about 89% sure this is going to turn into a novella 😀. This is a great episode and I know how tough putting this stuff out there can be, so kudos for doing that.
* Personally I have not seriously considered pulling the trigger on 'retirement' until both the kids are done with college and on their way with their adult lives. There are so many variables with having a family that I could never wrap my head around the people that hit their FIRE number and then have kids. Insurance, tuition, sports, activities, trips to the ER, trips to your favorite theme park and the 1,000 other things that go into raising kids are just too many variables for my wee little brain to handle. I have a few (4-ish) years left until #2 is on his way to being on his own. Barring a powerball win tomorrow. I'll find a way to retire by the end of the year if I win!! You were talking about hitting your FIRE date when you have a kid just starting college. I would say if that was realistic you are in a very blessed position.
* One of my former bosses has often said "there is success, and there is learning". I am with Jason on his comment about the word "failure". No plan survives first contact with the enemy. Well, the enemy is at the gates, we all need to adjust. For anybody that has taken those surveys over the years about "what kind of investor are you?", this is a good time to go review those and see how current market conditions compare to when you took the quiz, what the results were and what you are actually doing now. How much do you love risk and volatility?
* I've always been more focused on the number than the date. So the fact that my portfolio has gotten smaller like all of our portfolios has not filled me with the same amount of frustration that it has some that had the date more fixed. Is it frustrating? A bit. But I'm continuing to buy like I always have and am being as aggressive as I can (with the amount, not the individual assets) with new purchases now.
* You have been nothing but consistent and clear on your thoughts about dividend investing. I plan on having a good chunk of my post-work income coming in from dividend stocks and there are some SCREAMING BARGAINS out there right now. So I'm happily buying away. Hell, even MSFT is yielding over 1% and if you look at some of the yields on various dividend aristocrats, pick a bank out of a hat, etc, some of them are historically high. I feel pretty good about plowing what money I can into the market right now. Have we hit the bottom? Probably not. Am I buying quality for less than I was 6 months ago? Definitely. At this point if the market goes down more, I'll be getting things even cheaper. If it stays even I'm making a meaningful return with the dividends I'm getting paid. If it jumps back up, break out the champagne and get the dancers out on stage. If things get much, much worse, we all have bigger problems.
* As you talked about here, I'm looking at chipping away the things that make work and life in general a grind.
Barring any dramatic changes (some of which others have alluded to in comments here such as health issues, job loss, etc.) I'm trying very hard to count my blessings and keep plugging away, secure in the knowledge that I am doing the best I can and being mostly sure it is the right thing. My family is healthy, I don't hate my job, we've got a roof over our head and food on the table. Just about everything else is window dressing.
I know things are pretty frustrating right now. But fundamentally speaking you are in a good place. Keep plugging away. You'll get there.
I’m a regular listener and it seems to me the bigger challenge for most people isn’t really “when” but “what” or “who do you want to be after FI?”
Love the jeep. Just got a bronco as a retirement gift
Nice...congrats on the retirement and the Bronco!
Thank you for your truth, sharing and emotion! Working at a crappy ole job to defer ssa! Never had to worry about this type of situation until I received an inheritance ! Tough sitting on your hands waiting!
“The things I worried about most in life never happened”
Chin up
Cheers, Michael...agree, the waiting is the hardest part!
All the best to you,
Eric
You said it: "I Love what I do." But I learned that I can love what I do somewhere else, for myself, or in a different way. If you love what you do and are in a fairly stress-free environment, staying put is reasonable. IMO, It is easy to calculate FI, but RE is truly only obtainable when you are under your calculated 4% withdrawl rate, and actually safer when closer to 3% (Like Jason).
Jason here - Thanks, Steven. Very true, hence our probing around the idea of a glidepath via modifying Eric's work. From my perspective, he definitely loves what we does and gets a lot of fulfillment from it. I felt the same about my own career, so I totally get it. I think the three of us are also well aligned on WR. I can't emphasize enough the freedom that comes from knowing you are safely withdrawing well below what one "could" do. It sure helps me sleep at night, and as you've likely heard, Eric is planning on being below his calculated SWR as well.
I’m 52 and I was planning on pulling the trigger on my retirement plan in January 2023. The new plan is to delay until January 2024 or 2025 if needed. It is soul crushing but I’d rather delay than retire into a bear market and be a basket case.
Respect...I'm right there with you! Sounds like you have a plan though, keep going!
-Eric
Thanks for sharing your honest views, concerns and plans. I don't even have a number or date yet but I enjoy watching and listening. Perhaps mine is a naive view but you should be happy and proud of what you've already achieved; plans don't always go as... "Planned!". If you step back and really think about it, it's just maybe a couple of more years doing what you're doing (and love). That's a very fortunate position to be in... I'd maybe now reduce a little your aggressive saving rates and enjoy more the present (and the next couple of years) ! 👍🙏
Amazing conversation. There is no failure. It helps people realize they are not alone.
Cheers, appreciate the support!
I hadn't even started to invest when I was your age. Now in this downturn I went into it with 15 years worth of cash to live on. So I was prepared for 15 years of downturn. It only lasted a year.
I started looking at retiring when I was about 52yo. The plan was to retire at 55yo. Once I got to 54yo, it wasn't happening, so I pushed it out to 56yo. Things kept coming up to cause me to push it out further.
I finally pulled the trigger, and retired June 2021 at almost 58yo. Have been focused on learning the finances better the past year and a half, and diversifying dollars across different areas better.
Now with all my stocks/ETFs down, and cryptos down, I'm still fine, but wouldn't want to sell any in this market. So will now start to build up a little more cash to keep from having to sell investments in a down market.
Will probably put some into stocks/ETFs in 2023 figuring it's a down market, and will eventually go back up at some point. But will just be building more of a cash position at this point probably.
I was lucky that I was happy working where I was, but was also getting to a point of burnout, and was ready to move on.
My situation may be a little different, though - I don't have a huge cushion in investments, cash, etc... but do have a decent CALPERS retirement, and it provides some extra for me to keep putting some into investments now in retirement. Will probably look for some kind of extra dollars to bring in from hobbies different than what my career was in, though.
In 2021 it was easy to run retirement income projections and walkaway with amazement at what seemed possible. The problem was we were in an accommodative environment where the Fed made money really cheap. Obviously that part has changed, and the effect on interest rates in relation to P/E ratios has caused equities to dip. But I have good news for you. Run those retirement projections again in this environment. Find a solution you can enjoy, that has a timeline you can accept, and sleep well knowing that this time you're most likely going to hit your goal, or even finish early.
I was offered a package to retire from work after 22 years but I turned it down knowing that if enough people did not leave I would be let go without any retirement package... Luck was on my side and more left the company than was originally calculated. Now I am 65 and a half and still working .. I have bought several fixed income annuities with income riders that will provide me income for my lifetime to give me a base income to cover all my living expenses. .I work with less stress and hoping when economy crashes I will be offered another package of one year salary plus 12 weeks vacation... Enjoying the journey
I was surprised at this episode because I would have preferred Eric's position. I'd rather have the bear market come when I'm still employed so I have the flexibility to change my date. If it came in five years after you hit your number in your original plan you're basically screwed.
My only guess is Jason shifted his allocation mix to less risky assets after retiring so he wasn't hit as hard?
Anyway I'm under 40 and don't have anyone in my peer group like this. Thanks for sharing your experiences and being like the virtual older brothers I never had.
Jason here - the scenarios are different. Yes, I'm down less than Eric and most pre-FI people, because I have a higher % of bonds+cash. That said, I'm still down a lot for the year. But the plan was built to bear that. The challenge for Eric and many others, is that they have been working towards an estimated FI date. Yes, they still have lots of flexibility because they're still working, and in fact will benefit a lot financially from all the "sale price" buying they are doing today. And as he said, for sure it's better to have this downturn happen while you're still earning vs. just after you've pulled the RE trigger! But it doesn't make it feel any better when you've had a finish line in mind and it moves on you. And that's what a lot of what our discussion was about. Thanks for your support!
@@TwoSidesOfFI Jason, this is the exact reason you have the cash and fixed income buckets and your path is the perfect example of that. Fingers crossed that the market bounces back while you still have plenty in your cash and fixed income buckets. I did have a question on the buckets - as you are filling them, what is the determination of which buckets o fill first (or are we supposed to be filling them in proportion to the final desired proportion)? If you wait for the cash bucket to be filled, you may never fill the equities bucket! Just when I think I have it figured out, there seems to be another level of complexity! Allocation, location, prioritization.
@@KG-oe8oo Precisely. I refill the cash bucket as a part of my twice a year rebalancing. My thoughts on cash holding approaches have come up before, including the episode on holding cash (th-cam.com/video/HXeCHpFo8Ps/w-d-xo.html). I'll talk about this a little more in an upcoming episode! -Jason
My husband and i have a target retirement date of May 1 2023. After making an extra $100,000 in 2021 we chose to pull from the markets ( People say not to do this but has worked for us) and do not regret our decision because our portfolio is still in good shape we can still retire in May of 2023.
Glad to hear you're on track for your date - congrats! Can you share your thoughts on how you decided to pull from the markets? Do you mean that you withdrew some, changed your allocation, or something else?
@@TwoSidesOfFI Sorry! i should have clarified we actually transferred to cash or a stable income fund that is what its called, because of this we are only down 8% on our losses. We are continuing to add to the portfolio from our pay until we retire.
We are retiring at 61.5 so not really early retirement.
Loved the "For entertainment purposes only (especially Eric's portfolio)", you guys are hilarious! Awesome as usual, keep up the great content!
Thanks!
At some point there is a leap of faith. The market may fall before or after the retirement date. The plan meet some flexibility. Also, it is t a failure if we need to get a part time job or live more frugally for periods of time. I think you should plug away at the plan and see what happens.
Cheers...plugging away presently!
-Eric
Wonderful content as always. Eric, you might consider retiring from the portion of your role that now feels heavy. You’ve shared that your passive business is meaningful and that your wife enjoys her work. Maybe you could transition away from client work as a kindness to yourself. Doing so might allow the remainder of your stamina to be applied to a longer career timeline without feeling like a failure. (As a note, you are one of the world’s wealthiest people. Hard to imagine that that represents failure to those in the world with less. You clearly seem to know this.) Be kind to yourself in general. Kind regards. Good luck.
Cheers, Jonathan...thanks for sharing your thoughts. In the weeks since we originally recorded this, I've committed to transitioning away from client work. There's an identity piece (am I still an architect?) that will take some time to work through, but we're all works in progress, right? I think the nature of people who strive for big goals and to create impactful work in the world is to not compare themselves to those who may have less, but solely to want to do more; to achieve more. I'm hopeful too that it doesn't discount or diminish the perspective I have knowing I am fortunate to even be contemplating such things. Wishing you all the best...
Yes, we certainly are all works in progress. Congratulations on your decision to move away from client work. It is demanding. You’ll always be an architect. The impact of your training and experience will modulate to let you make and build in new ways. Your impact is your art. The delight in your voice when you shared in this episode what it feels like when a project has flow was compelling. Many of us have enjoyed such a moment. I’ve had the pleasure of contributing to decades long projects that concluded successfully and offered both psychic and commercial benefit. Soul and wallet. Meaningful work. The best kind. You will no doubt find lots more of the same. Enjoy the journey. I look forward to your next installment. Kind regards.
Definitely a challenging time, and hearing your thoughts of Lloyd and discussed is really helpful. At the same time, without a crystal ball, the numbers you are looking at are projections only. The market could ramp back up, and your DCAs now could have significant future value.
Is there a thought to holding the retirement date now, waiting a little longer to pull the trigger on your FI date?
We quit full time work earlier this year in April, with about 2 years of living expenses in cash, and a $34k HELOC to work with. Even though things were not perfectly rosy at the time, we decided that it was worth it to go ahead and quit. We have enjoyed all of this time that we have been spending with our now 1 year old. Without trying much at all, we typically have been earning about 40% of our living expenses (~22k/ year) every month since then. We are just staying a little bit more conservative with our spending than we might be if the market was elevated.
It’s a hard decision to make for your family, good luck with it. We leaned more towards spending our time how we want, rather than worrying about what the market has done to our portfolio and how tight money could get. We have flexibility.
Thanks for the real conversations btw!
Zach, this is such a great perspective. As I head toward my FI I often wonder if I will continue to earn "some" money as I feel like my natural tendency for activity will lead me this way. Maybe we need a new acronym of FI+PT (Financial Independence + Part Time) :)
Thanks for sharing, Zach. And thanks for your support as well! Glad to learn you're finding value in the content. I bet you discovered very quickly just how much value you can ascribe to the time freedom you gain through RE. Best wishes to you in all things. -Jason
Aim, Aim, Aim, .... hold your Fire!
When I saw my 401k & IRA portfolio (stocks/ETF/bonds) take a hit during the last 2009 downturn, I realized I needed to make a change in my allocation going forward. So I converted 30% of my portfolio into real estate assets. I also took another 30% into dividend stocks and do weekly stock option trading which provides at least 1% weekly income. The remaining 30% are still managed by Fidelity and 10% cash in high yield savings. This change allowed me reach my FI faster and allowed me to retire early in Dec 2021. The monthly income from my rental properties, real estate syndications, dividend income and option trading help replace my W2 and fund vacations and things without the worry of depleting my portfolio.
I'm in a similar boat. At this time last year I thought I would leave on Easter 2022 (leaving in the spring is optimal for me). I had more money than I have now. That, combined with high inflation, has forced me to re-evaluate my number. If markets go back to ATH, I'll leave by Easter 2023, otherwise one more year, till 2024.
I have changed how I invest by putting half of my new contributions in high interest cash and the other half in my typical stock/bonds ETFs. The idea is to build a nice cash cushion to make sure I don't get screwed again by market conditions when I want to leave, and still keep buying stocks low, just at a slower pace than before.
Sounds like a solid plan, Charles...thanks for sharing!
-eric
Same age and FI date as you and I believe very similar FI number and similar professional life (control freak - can't easily scale down due to client demands). Looking at it, if we reach our number, even in this down market we will just have that much more upside. The concern is the near term but we are stockpiling cash in this last year or two in order to weather the immediate market downturn. Leaves a concern as to what happens if market downturn lasts more than 2-3 years but keep coming back to the reason for FI - burnout and want to enjoy time without stress and accomplish some other goals. With that in mind, we are willing to deal with short term austerity if needed. Appreciate hearing your perspective on our similar FI journey
Thanks for sharing this, @Rayce Dykstra ...it's a comfort to know others are in similar position! Congrats and best wishes on the path ahead, keep me posted...
\m/
eric
My date has not changed, just waiting for the calendar year that I'll turn 55 (2025). I look at it this way, I had double digit gains for 2019, 2020 and 2021, so a big decline this year is fine. It all averages out.. I live in Maine as well and have very low fixed expenses, so I can be flexible with my withdrawal strategy.
I went back and watched the episode by the doctor who provides death care and his approach to thinking about FIRE and at least for me that really made me feel a lot better and come up with some other paths.
Thanks for sharing, Michael. Very glad to hear it resonated with you
Even though it feels bad now, in some ways it's good. If not RE yet, we can now buy shares at a discount and avoid the sequence of returns risk had the bull market lasted a couple more years. I think recency bias led a lot of people to plan for the happy path only. These types of downturns are common, so it's a good reminder to account for them in our plans and expectations.
Thanks, Nick. For sure, and as discussed Eric continues to buy at these sale prices. Recency bias certainly is a real thing. It's easier for all of us who have weathered these before, of course. On the same note, it can't help but be disappointing when you have even a rough plan tied to a date/year and that needs to likely change.