The Roof is on FIRE!

Fire is all around us, and it has become a movement that many in the XY generation are interested in. The desire to become financially independent and retire early is what the FIRE movement stands for. If you're considering being a part of this movement, it's essential to have a clear understanding of your goals and develop a strategic plan. Without it, it’s like getting in the car and driving and not having a destination. You will be in such a haze that you won’t remember if you closed the garage or not.

Let’s discuss three fundamental aspects to consider when working towards financial independence and early retirement.

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?1. Define Those Goals

One of the most critical steps in your journey to financial independence is understanding what you want in retirement when you plan to stop working. This step is often overlooked, but it is crucial for creating a personalized plan. Retiring early is not a one size fits all approach. Retirement desires can vary widely among individuals. Some may dream of traveling in an RV, exploring the country, while others may long for an extended period of time cruising worldwide. Some may want to turn their side hustle into a full-time career, while others may seek to pursue a passion project. Remember, retiring early is really about getting financial independence. Some might want to just be done working all together, while others want to be financially secure so they can make a transition in their life to build a happier existence.

Determining what you want is vital because the associated expenses differ significantly between these options. Cruising, for example, can be much more expensive than building a side hustle into a profitable business. Understanding your wants will help shape your strategy and enable you to evaluate the cost implications accurately. It is essential not to skip this step, as it forms the foundation for your entire financial plan.

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2. Ensure Accessible Assets

Most traditional retirement accounts, including 401(k)s and growth in Roth IRAs, come with a penalty if you withdraw funds before the age of 59 1/2. This rule is often overlooked, but it is important to be aware of the potential penalties. If you plan to retire early, accessing your retirement savings before the specified age can result in a 10% penalty on top of taxes.

To address this issue, you need to ensure that you have accessible money. Evaluate where your money is currently invested and consider the tax implications and penalties associated with each option. What your strategy is when taking money out is a much different strategy than putting it into accounts. Review the availability of your assets. How can you get your money when you need it? If you lack accessible money, explore methods for creating a separate bucket of funds that can be accessed without penalties.

Lastly, determine if they will keep up with inflation over time. Factoring in the historical inflation rate of around 2.5% is critical to ensure your assets retain their value. You are funding a much longer time period than most in retirement. It might be 50 years you need to fund. Don’t lose purchasing power. We want to live a life we love, not be scraping for money under the seat cushions.

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3. Plan for Health Care Costs

Health care costs are typically one of the most significant expenses in retirement. Medicare often becomes available at age 65, which offers lower premiums and comprehensive coverage. However, before reaching this milestone, health care expenses can take a toll on your finances. I’ve had clients paying over $2,000 a month just for premiums on health care as they were too young for Medicare. It is crucial to factor in these costs when planning for your financial independence.

Make sure to research and estimate your potential health care expenses. There are websites available that allow you to run different scenarios and get an idea of what health care and insurance might cost you. By being aware of the potential costs in advance, you can make necessary adjustments to your financial plan. Failing to include health care expenses can lead to unpleasant financial surprises later on. We don’t want that!

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Embrace the FIRE Movement: Live Life on Your Terms

The FIRE movement is all about building the life you want and enjoying it while you are still young and active. It enables individuals to pursue their dreams and experiences without having to wait until traditional retirement ages. Whether it's engaging in bucket list activities, traveling the world, or pursuing personal passions, the FIRE movement encourages you to live life on your terms. How good does that sound?

At One Vision Retirement, we work with individuals who want to build the best possible life while maintaining financial independence. Our motto is "Your financial vision, your way." We understand the importance of aligning your finances with your life goals, and we strive to help you achieve that. Think of us as your dream coach. Let us help you live out your dreams.

If you are interested in learning more about financial independence and early retirement, we invite you to book a get-to-know-you call with us. During this call, we can get to know you and see how we can help.

Schedule a call today: https://calendly.com/onevisionretire/getting-to-know-you-call-15-min

Achieving financial independence and early retirement requires careful planning and consideration. Once you achieve it, then you can play but before, it does take time and effort. It won’t happen overnight. By defining your retirement goals, ensuring access to your funds, and accounting for health care costs, you can lay the foundation for a successful FIRE journey. Take control of your financial future and embrace the FIRE movement, allowing you to live life on your terms and create lasting memories.

#financialfreedom #financialindependence #financialgoals2024 #financialplanning #retireearly #firemovement

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Investment advice offered through Integrated Financial Partners, doing business as One Vision Retirement, a registered investment advisor. The information in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. Integrated Financial Partners does not provide legal/tax advice or services. Please consult a qualified legal/tax advisor regarding your specific situation.