[bumby]

Your point is well taken on future returns and how starting the compound interest cycle is a major contributor to success.

>that has never happened

This is the part that I disagree with. Talk with anyone who planned on retiring around 2008-ish. As a hypothetical, if the market is the proxy measure they lost around 5-8 years of retirement because they had to have "more time in the market" to re-coup losses. If they actually retired and were drawing down their money, it's even worse. Granted, the hypothetical is biased because someone of retirement age shouldn't have that much market exposure, but the point still stands that, while true at the population level, waiting for the market to recover doesn't always work out well at the individual level. I tend to think the people who tout long-term averages of market returns tend to ignore the long periods of sideways or downward movement that may align with an individual's specific circumstances.

[pc86]

You make a good point that I tried to address but didn't do so very eloquently. My "never happened" was to a sustained period (12, 15+ years) of returns where your contributions weren't worth much more than they were when you put them in. That would destroy an entire generation's retirement. Your point about losing 5-8 years in your goal was to retire in 2008 is well taken. Folks in that position, assuming they had massive market exposure (which like you said is a mistake and extremely risky), had to either take a standard-of-living cut in retirement, continue working, or draw down principle and risk running out of money early.