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January 07, 2013


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Interesting, Syd. I retired in late 2008 but it took very little time for me to recover the losses in the market as well as the $72,000 I paid in added income taxes. By late 2009 I was back to where I was in late 2008, and by early 2010 I was back to where I was in late 2007, my high water mark at the time. And I have not earned more than a few dollars in the last 4 years.

I can even relate to your hockey story. Back in the late 1970s and early 1980s, the family of a teammate of my brother who played youth hockey had season tickets to the New York Islanders (in their heyday of 4 straight Stanley Cups) and gave us their unused tickets sometimes. Those seats were about 6 rows up at the blue line. I never got hit with a flying hockey puck but one did land a few seats away from me one time (and we did get hit with flying dixie cup lids when everyone cursed out the ref!). I also have not attended more than a few hockey games since that one, as I do not follow hockey any more.

Retired Syd

deegee: Well then you might appreciate this story. Now whenever I see a puck going out in my general vicinity I just duck and cover. A couple years ago I was doing this while all the rest of the fans in my area were standing up trying to catch the puck. And guess where the puck landed. Right in my seat next to me. Everyone was looking around to see where it went and I turned to Doug, "I have the puck." When I held it in the air, the guy behind me said, "Hey, that was mine." Yeah, right. Karma baby.

Tom Sightings

I don't follow hockey; I follow tennis -- much safer when you get hit in the head! But seriously, if you're increasing your principal, while still living off your assets, you're doing just fine,aren't you?

Me, I honestly don't know if I'm worth more now than I was in 2008. But I do know earning even $20 or $25K a year in a part-time job goes a long way toward propping up my retirement savings.


We are finally up as well, but financial pessimist that I have become, I expect another shoe to drop eventually. As a result of the financial turmoil of the last few years, we adjusted our retirement withdrawal rate downward from 3% to 2.5%.

Interestingly, we are enjoying early retirement enormously at 2.5%, and I can't imagine spending more at this point. And the peace of mind this conservative withdrawal rate provides is priceless.

Retired Syd

Tom: Yep, tennis is safer and so is earning a little cushion with part-time work while you're retired. Unless of course, it makes you feel so wealthy that you blow it all on extras!

Tamara: I expect the other shoe to drop too, it's just part of the normal business cycle to have a recession every several years. Hopefully the next one won't be nearly so deep, but there's really no downside to protecting yourself just in case.

Joe @ Retire By 40

Thanks for your perspective. Retiring in a bear market is really rough. 5 years is long time to catch up, but I guess you're right about the shorter time to the end of retirement now. I quit my job in 2012 and our net worth went up quite a bit because the economy was good. We're not withdrawing from our retirement fund for 20 more years though so those funds will have time to grow.


Well written article. You and yours are doing the right thing to begin saving again. As a stock market watcher (my hobby, not my career) over the past several decades, a bump is looming. The US govt has over subsidized mortgage buy backs and bailouts and devalued the dollar. The downturn will begin perhaps as early as this earnings season, which starts ( looks at wristwatch) today. Lol. But, it may take until May 2013 through the summer. Some predict a catastrophic loss as was seen in Japan's market just a few years ago: a 60 percent drop....can you imagine what that would do in the USA where, unlike Japan, there are no jobs to grab onto for those needing a lifeline.

My best estimate is not as dire, i calculate that we will see a 10 to 15 percent correction (Dow 11200 to 12300) in 2013. Best to take some stock market investments off the table now, deploy it again in the bargain basement that is coming.

Also, if you want other larger items, like the couch, buy now. It's a virtual investment as inflation is about to tick up and you'll pay more for it in 2014.

Great blog. Longtime follower, Syd.

Retired Syd

Joe: So I guess I should clarify, when I say "retirement accounts" I mean all my accounts, whether they are tax-sheltered or not. After you retire, everything becomes a "retirement" account in that you're living off that now. So when it passed its previous balance, that's after I've taken out 5 years of living expenses as well (although I did earn some money from my part-time job, which increased those balances.)

Sven: Thanks for making me feel ok about the couch.


Hi Syd - Your blog and your writing are great! Thank you so much for sharing your experiences. Question - did you do a "trial run" of living within your estimated retirement budget before you retired? We just put our retirement budget the same as what we've always spent (adding in health care costs), so our lives don't have to change that much (we've always been tightwads). Thanks!

Retired Syd

aw: Thanks for the nice comment. Yes, we did take our budget for a modified test-drive the year before I retired. I say modified because it still had some items I knew we would get rid of after I retired (house cleaner, gardener, work-clothes, lunches out at work, etc.), but also that the budget would increase for health insurance premiums. But we did keep track of everything to make sure we had a good idea where we were headed.


If I follow your investment logic, $100,000 kept in the stock market in 2008 till five years later would have gone down by 20% to $80,000 and now, 2013 would be back up to $100,000?

And that's a good thing? Because you got a 20% return?

Or, as I did, took that same $100,000 in 2008 and put it into a 10 year FDIC CD paying 4% (much against the gasps of financial advisers) and now today it is worth $121,665.28 (approx)and never did once go down below the $100,000 benchmark. I never once felt a drop in my wealth effect. If my calculations are correct I earned so far to date, 21.665% with my compounded interest. I dunno. Isn't 20% divided by 5 years, 4% or so?????

I don't like Wall Street investing. Never did and never will. I've never been good at it. Lost in 1987 and lost again in 2001. Two times the charm. I find it fluxing that you (plural) can sit around and discuss the next stock market hit. We're all different and we all have our own unique ways of doing things. Each and every one of which is to be respected and mindful.

Retired Syd

Nester: Well it seems like you did pretty well for yourself with that 4% CD. I had one for 5% five years ago, but when it expired all I could find was 1 or 2%.

But the truth be told, my retirement plan won't work if I only make 4% for the next 50 years. I've got to beat inflation by 2-3% to make the money last until I'm 100 (of course, we may not actually live to 100, but just in case!)

On the face of it, it looks like I made only 3.5% over 5 years (that's how much our accounts are up past the original mark). But in reality, I've withdrawn 5 years worth of living expenses over those 5 years. So really I earned the 3% plus the 18 or so I've withdrawn.

It looks like you and I landed in about the same spot, you with way less stress.

Turns out that stress was a good thing for me because it helped me rein in the spending over those down years. Not sure I would have behaved that way if the market was rocking! So now that I'm back past where I started, the challenge is to get back to those leaner spending years.


Syd, Unlike you I am still down somewhat from the peak in October 2007, although I considered the stock market overvalued then. But that's because my draw is quite a bit higher than yours since it is predicated on my portfolio lasting until age 70—being thrifty, I can live quite comfortably on Social Security. I need to do my annual projection but as of a year ago I was on track and last year was a good one for investing.

Having been through many bear markets I have learned to just ignore them, except as buying opportunities. It does help that I have a large chunk of TIPS and Series I savings bonds purchased more than a decade ago when rates were very good. But that's all part of a balanced portfolio. Beginning my fifteenth year of early retirement: so far so good!


finally catching up on my reading. knew there was a reason I preferred football and soccer to hockey (although my daughter is a Capitals fan in the extreme). Once youve done the lean days, if nothing else, you know you can do them again if you have to. The same with part time work. Enjoy the couch though, its sounds well worth it in this case!


FIVE THOUSAND economist conventioneers were in San Diego last week. A full 100% of those interviewed agreed with the statement "it is hard to predict stock prices" versus only 55% of non-economists with similar levels of education. Economist 1/12/2013.

Time and again it has been shown that success in the market is due to luck, insider trading, or sticking to a diversified portfolio with asset classes balanced for personal risk tolerance.

Of course we'd all rather be lucky than smart, but with the lottery, why waste your luck on just the market? As for insider trading, well, one can take one's chances there too and lose your liberty along with your money. For most of us - most being the 55% - that just leaves the latter.

Retired Syd

Cyclesafe: Frankly I'm surprised a group of economists would say it's "hard" to predict the market. They should be saying "impossible." If you don't believe me, turn on CNBC, Fox Business, Bloomberg, and find me 10 "experts" that agree on the direction and/or magnitude of projected gain or loss over any time period in the future. (Or conversely, find me five that made accurate predictions more than once in the past.)

I'm with you, I'll stick with the latter.

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