Can I Retire Early?
One question we get a lot from Clients is if they can retire early.
There are many layers that need to be unpacked when discussing this with them and in today’s blog, we want to go over some talking points for how to go about answering this.
The first thing we find very interesting is that these conversations came up here and there prior to COVID, but since then, we’re finding that the discussion is much more popular. With people being connected to technology 24/7, never being able to get away from their career and feeling burnt out, we’re seeing that people just want a little more downtime. Ultimately, this desire might reflect in them wanting to retire early.
A few key considerations we want to go over when thinking about retiring are the following:
What’s your Budget?
Number one, you need to come up with your budget. You need to understand what your monetary needs are and your basic living expenses. We want to know how much money you need to make to live your desired lifestyle in retirement.
How much Debt do you have?
Number two, debt management. We want to pay off as many recurring expenses as we can prior to taking that leap of faith and going into retirement because you’re no longer in your working prime and you will have limited sources of income.
Do you have a plan for your Health Insurance options?
Number three, healthcare planning. Having a good understanding of your healthcare options and what’s available to you is crucial. Are you able to go on COBRA? Is your employer going to pay for your healthcare in between retirement and Medicare age, or do you have to go out to the private marketplace? Understanding what these costs entail and what strategies we can utilize to benefit you is crucial.
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What is your Income going to look like in Retirement?
Number four, income and tax planning. Where is your income going to come from in retirement? Are you fortunate enough to have a non-retirement account to supplement your income needs in addition to retirement accounts? Do you have a pension? Is a Roth conversion appropriate for you? We want to figure this out so we can develop the best withdrawal strategy in the most tax-efficient manner for you.
How are you going to spend your time?
The last factor that we see is understanding what you’re going to do with your time and how you’re going to redefine yourself now that you’re retired. You’ve spent potentially decades of your life wrapped up in your career and defining yourself through it. Now it’s all over. This is a great thing, but having conversations with those that you trust around you is crucial and can be very helpful in taking the next steps forward.
The Final Word:
Everyone’s situation is different and depending on how your finances look and what you plan on doing in retirement, you may be able to plan for an early one. It’s super important to speak with your trusted professionals to develop a plan that’s right for you and gives you the best chance of success. We hope that you found this helpful!
Disclaimer:
Rockline Wealth Management (RWM) is a registered investment adviser located in Plainview, NY. RWM is registered with the U.S. Securities and Exchange Commission. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.
Rockline Wealth Management does not offer tax or legal services. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's investment portfolio. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses.
The opinions expressed and material provided are for general information, and should not be considered a solicitation of financial advice or for the purchase or sale of any security.
Real-life and fictional examples given in this video should not be viewed as guaranteed outcomes when investing. Past performance is not indicative of future results and every individual’s investment circumstances are different. Individuals should consult their financial professional before implementing their investment plan.