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|Subject: Re: Question for Retired Fools||Date: 9/2/2012 4:36 PM|
|Author: telegraph||Number: 17793 of 19221|
"I'm not retired yet myself, but was wondering how the retired have managed over the last 10 or so years when the market essentially gained nothing in the first decade of this century.
I don't see how anyone who retired in 2000 with what they thought was enough money to live off going forward would have been able to stay in retirement if the market didn't gain any.
I'm just curious how any retirees who may have been in this situation have managed over the last decade. I've heard that a lot of retirees had to go back to work at least part time."
Retired in 1999.......at age 52.5..... with a nice portfolio that was about 72% stocks...and 38% in bonds and CDs....
CDs did great for six or seven years...spinning off 5%. Had about 3% in tax free bonds spinning off nice non-taxable income.
Stock portfolio was spinning off 3% dividends....had some nice paying ones.
I signed up for SS at 62.
Had $4800/yr pension from GE starting at age 60..non inflation protected so took it immediately...no reason not to. That and the SS at age 62 paid most of the bills...well, about 80% of them if you include health insurance .......so could easily live on 2% SWR....and that was what the stocks and bonds were easily spinning off each year.
Then interest rates plummeted...but the bonds rallied....the GNMAs funds went up.....the TIPS fund went up nicely to compensate. Miss those 5-6% CDs, but the portfolio is still spinning off enough...
and at age 65, Medicare kicked in and I'm saving over 2000 a year in premiums on health insurance...and if I get sick, will save a lot more since I had a private policy with 2000 deductible and 30% co-pay up to 5K.
Life is still good, and absolutely no thoughts of going back to work.
1) House was 'paid for' at retirement. So were my two cars. No debt.
2) Balanced portfolio...nearly all of it bought pre 1999....at least half of it bought pre 1990......but I saved and saved through the 1990s.....stashing away 35% of my paycheck each year. The stock gains through the 1990s did my portfolio very good.
Yeah, I took a hit.....but not that bad as the bond funds and REITS rallied......and for half of the 2000s, still had those nice 5% CDs kicking off nice interest each month.
If you lived in an area where you house plummeted, you were expected to cash out and retire elsewhere...you likely got hurt. our houses in Dallas area dropped 3%.....but never went up 10%/yr for a decade like Las Vegas or CA or south FL...... so it' not worth any more than it was in 2000.
Had a few stocks 'bought out'....but re -invested those funds, but had to pay cap gains that year on Lubrizol and some others. Got nice gains out of buyouts.
Life still good. Living off SS, interest and dividends from portfolio.....
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