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How to Retire Early

How to Retire Early

| February 15, 2016
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A few weeks ago I had lunch with a friend who is a passionate hiker. He described trails all over the world that he would love to tackle. He is in his early 40’s and doesn’t want to wait for the traditional retirement age to get started. For him, early retirement could be great. His situation made me think. 


Chances are that your dream isn’t hiking around the world. You might dream of white sand, warm water, and maybe a margarita or two. If you don’t start developing a retirement plan now, you’ll have to put your dreams on hold. The good news is that early retirement is possible, as long as you are smart about the way you invest and spend your money. 

Make an Early Retirement Plan    

Early retirement is generally considered to be anytime before the retirement benefits of Social Security begin. After the rise of Social Security, 65 became the de facto retirement age. Why? Because that’s when the Social Security benefits kicked in. However, the past few years have seen a steady drop in the retirement age, with most people retiring around age 63. In the future, the age will fall even more, as over one-third of American workers now plan to retire before they reach the age of 64. 

If you choose to retire early, there a few costs to consider. Not only will you be exiting the workforce during your peak earning years, but you will also sacrifice additional money from an employer-sponsored pension plan if you have one. Additionally, the start of Social Security benefits is being pushed to 67, so you will have to wait longer to get those. 

The Retirement Calculator

There are three sources of income you should consider when making a retirement plan:

1. Government income (Social Security)
2. Employer income (Pension)
3. Personal Savings

You also need to consider the standard of living you want to maintain. Will those combined sources of income be enough to sustain it? Will you have any other expenses, like family, that will eat into your savings?

We’ve created a retirement calculator that you can use to run some figures, and make sure that your current retirement strategy will be enough to sustain you.  

How Investment Advisors Can Help You Plan For Retirement

An investment advisor will listen to your goals and help you create a financial plan to achieve them. There are various investment options, like stocks, bonds, and money market funds, that can be used to ensure you have enough money to retire when you want to. 

Retirement is Part of Every Wealth Management Plan

Wealth management plans are long-term approaches that help you create a bright financial future. Since retirement is such an important part of your life, you need to make sure that your wealth management strategy is setting you up for success later in life. While taking the time to create a wealth management plan may not pay off much now, you’ll be thankful that you have one when retirement age comes around and you start pulling from the portfolio you created. 

So, go on, get started.  

Have questions? Get in touch today!

Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.

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