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After recently disclosing my portfolio voyeurism, a reader, J.C., sent me an email sharing his financial information. He’s been tracking his numbers with great detail since December 2007.

JC's Rig

He retired just months before the financial crisis. His portfolio dropped nearly 39% between years end 2007 and 2008. 

He withdrew over 9% of his year end 2008 portfolio value to support his retirement spending in 2009. His withdrawal rate stayed above 5% every year until 2019. Then it dropped to 3.67% of his previous year end balance.

I was fascinated exploring his detailed numbers. I asked if he would be willing to answer some questions about his experience of retiring just months before a global financial meltdown and allow me to share with our audience to help us all learn from his experience. He graciously agreed. Enjoy!

J.C., thanks for being willing to share your story. Let’s start with learning a bit more about you.

When did you retire? How old were you when you left your career? What career did you retire from?

I retired in early January 2008. I had turned 57 that previous November.  

The last decade of my electronic career, I worked at Apple in the Hardware Development Department as a Unix System Administrator. I was the technical lead for a group of ~10 of us.  

Did you have contingency plans to go back to work if needed? Or were you certain you were done working at the time?

There were no plans to go back to work. I had reached the pinnacle of my career and was on the decline with regards to my skills compared to the young whippersnappers coming on board.  

There was little doubt that I was done. Although I do remember thinking I might be able to go back to bartending as I had done in my 20s.

Describe the emotions of taking nearly 10 percent of your 2008 year end balance to provide your living expenses in 2009.

We recognized right away that we could not sustain our current burn-rate, so we hunted around for workamping jobs. There is a whole subculture of working full-time RVers out there who work (usually for the campgrounds where they are staying) while being on the road. There is even a job-finding website called workampers.com.  

We decided to spend the summer in the Black Hills of South Dakota and look for work. It only took a couple of days and we found work at Crazy Horse Monument Campground (now called Heritage Village RV Park). We did that for the summer of ‘09 making a little over $8 per hour plus a free campsite.  

At the time we were spending about $400 a month for diesel and $600 a month for campsites. So this saved us $1k per month plus our small income. By the end of that summer, Oct 2009, our portfolio was on the mend. We never had to workamp again.  

To clarify, our bottom was not the $928k at the end of ‘08 as shown in the spreadsheet I shared. We actually bottomed out at the end of Feb ‘09 at $864k. By the end of that summer we were back over $1M ($1,087,612 to be exact). 

Still, I don’t remember being all that concerned about our finances. I knew we still had enough for a minimalist existence if we had to.  Luckily, as you can see in my spreadsheet things just got better and better financially.

JC's Portfolio Progress Spreadsheet

Were you aware of safe withdrawal rate research at the time you retired? If so, how did that shape your withdrawal strategies? If your knowledge was limited, would you have done anything differently knowing what you now know?

Nope, I had not discovered any of that stuff yet. 

The withdrawals were not done all at once. I pulled money over time as we needed it. Also, a good portion of our portfolio was a Laddered CD stack. We did not have to touch the investment portfolio for the first couple of years. We’d just cash in a CD at maturity to live on for 2 or 3 months until the next one matured.

I would have kept even better records. You might have noticed that from 2008 thru 2011 our expenses were conveniently rounded numbers. That’s because in 2012 I set up a spreadsheet and started recording every expense. At the end of that year I saw how much we were burning through, so I went back and reconstructed those past years.  

Luckily we had accurate data for end of year balances and with bank and credit card statements. We did our best at guesstimating our expenses. Then in Aug 2013 we found YNAB (You Need A Budget) and everything changed. We dropped our spending down from north of $100k to just $88k that year.  

We’ve tracked every penny in YNAB ever since. I love that app.

Around 2012-2013, I was starting to learn about safe withdrawal rates and FIRE. I was somewhat concerned about our withdrawal rate, but not too much because I figured as long as we ended each year ahead we were doing ok.

Did you derive comfort seeing your year to year balance progressively increasing between years end 2008 and 2014 at which point the portfolio finally recovered on a nominal basis to where you started at year end 2007. What were your contingency plans to cut spending or increase income if things would have played out differently?

Yep, we were aware of our spending and the high withdrawal rate, but because the portfolio more than kept up with our spending we were not overly concerned about it. Now that we are collecting Social Security our withdrawal rate has dropped WAY down.

Regarding contingencies, over the years we have improved the ability to subsist in the coach alone out in the desert if needed.  We have added, in increments, 1110 watts of solar to our rig such that we can live for free (or darn near close to it) out in the BLM land out west. We also converted our batteries to Lithium.  We’d still need to purchase the basics and keep right with the IRS and insurances, but we believe we could really bring costs down such that we could probably get by on just SS if we had to.

Your situation could be viewed as extremely unlucky to experience one of the biggest stock market crashes in American history just months after walking away from your career and source of income.

You could also be viewed as extremely lucky. Your investments delivered double digit positive returns in 9 of the 12 ensuing years. You experienced only one losing year of about 9% in 2018. Despite maintaining a relatively high level of spending through that experience, your portfolio recovered fairly quickly.

Do you give much thought to the impact pure chance and luck have on retirement outcomes? Do you have any insights on these topics that you think readers may find useful?

Yea, a 10+ year bull market didn’t hurt. But we were hit with quite the sequence of returns issue we had to deal with. 

I do believe in the low cost index fund approach to investing. It had a lot to do with our success. We had both good luck and bad luck, but our portfolio just kept marching on ever upwards. 

We always kept an eye on things (as demonstrated by all the spreadsheets) and were prepared to cut back on spending (or maybe workamp again) if things got tight. Plus we could always go park out in BLM land and live practically for free in our outfitted motorhome.

I appreciate you being so forthcoming in sharing your numbers, strategies, and the emotions that went along with navigating such a challenging start to your retirement. Do you have any final words you would like to share with readers who may be considering or just starting their own retirement?

I’d be honored if you would peruse my 15 lesson investing course I put together, initially for my nephew. I’ve since shared it with several of my relatives and friends over the last couple of years. Each lesson is a page or two. Here’s a link to it.

Thanks so much for asking me to participate in this exercise. It’s been fun. I hope I haven’t overwhelmed you with data.

Take Home Message

When talking and corresponding with readers, I frequently hear questions like:

  • Do I have enough money to retire?
  • What is the optimal asset allocation?
  • Is 4% too high (or too low) of a starting withdrawal rate?

We all want certainty. People pay financial advisors a lot of money to answer these questions. Others spend a lot of time crunching numbers over and over again. Many of you do both. There’s nothing inherently wrong with either action. But it’s important to acknowledge that no matter how much time and/or money we spend seeking certainty, it doesn’t exist.

I appreciate J.C.’s willingness to share his detailed numbers, actions he took, and emotions he experienced when starting retirement at such a tumultuous financial time. There are many lessons to be learned from his case study.

In my opinion, the most important is that the more willing and able you are to be flexible the more bullet proof your plan. Conversely, if you’re unwilling or unable to be flexible, you’ll need to save more and plan much more conservatively.

There are a number of retirement levers you can pull to adjust to conditions as they present themselves. J.C. focused primarily on reducing living expenses, while also generating a little income early in retirement by workamping and then later in retirement by optimizing his Social Security benefits.

It’s important to consider and honestly assess which levers you would be willing to pull. There is no universally right or wrong answer, but there is an answer that is correct for each of us.

Thank You J.C.!

J.C. closed by stating he hopes he hasn’t overwhelmed us with data. That may not make sense to those of you seeing only this finished product.

I edited out over half of what J.C. sent to me. This allowed me to highlight the challenge of retiring before the financial crisis and navigating the uncertainty of the next decade.

I’m grateful for J.C.’s willingness to be so forthcoming with details of his financial strategies. If you have further questions, comments, or desire to learn more about J.C., leave a comment below and we can continue the conversation there.

Update: Readers left a number of comments asking for more specifics regarding J.C.’s spending, asset allocation, and Social Security claiming decision. Rather than address each one individually, we agreed it made sense to share the full list of questions I asked him and the answers and supporting documents that he sent me back before I edited. Here is a link to the document.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. You can reach him at chris@caniretireyet.com.]

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